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Will the Stock Market Rally Stick, or Vanish?
Old 03-15-2009, 09:57 AM   #1
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Will the Stock Market Rally Stick, or Vanish?

This is an interesting article on 5 reasons why the market should continue to rally and 5 reasons it has yet to find a bottom:

Will the stock market rally stick, or vanish?
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Old 03-15-2009, 10:08 AM   #2
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I think we still have to deal with the treasury bubble and dollar bubble. When that begins foreigners will pull their money out of the USA stock market. Until that happens I'm very doubtful of any rally. We may rally into May, down from there, and up until Jan?, then another big down next year - just a guess.
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Old 03-15-2009, 10:11 AM   #3
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My crystal ball is STILL in the shop....

I am becoming more hopeful, though.
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Old 03-15-2009, 10:41 AM   #4
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My guess is that we aren't out of the woods yet and will revisit recent lows at some point.

But the truth is, I don't know and neither does anyone else. Which is why it made so little sense to me when heretofore "long-term investors" were talking about bailing out of stocks just one week ago. Had they pulled the trigger on that trade, what do they do now?
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Old 03-15-2009, 10:56 AM   #5
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Originally Posted by dex View Post
I think we still have to deal with the treasury bubble and dollar bubble.
Could be, but there is reason to think that neither will happen. Japan's 30-yr bond is currently yielding 1.98% vs. 3.67% for the US Treasury. Meanwhile Japan's Government Debt / GDP ratio is about twice as high as in the U.S. It's not clear why the Treasury "bubble" has to burst absent a rebound in the economy.

Currency is a zero sum game, if the dollar declines, some other currency or currencies have to appreciate. Most of the rest of the world is a basket case too. Some EU members could be heading for default. The U.K. is in worse shape than we are. It's not clear which currency would benefit at the expense of the U.S. China, maybe, but they are pretty intent on managing their exchange rate (and may need to). It's also possible that China ends up imploding in pretty spectacular fashion.

Flight to gold as all world currencies collapse? Hope not.
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Old 03-15-2009, 11:07 AM   #6
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Likely another suckers rally

Calculated Risk: Roubini: "Reflections on the latest sucker’s rally"

'The Treasury Bubble' - that's funny.
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Old 03-15-2009, 11:16 AM   #7
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I have one prediction about which I'm highly confident.

Roubini will be calling for further declines at least 12 months into a sustained market recovery.

“The only function of economic forecasting is to make astrology look respectable.” John Kenneth Galbraith.
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Old 03-15-2009, 12:29 PM   #8
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I don't think it will stick at all. We have some fundamental problems which got us here to begin with. If we don't fix those problems, we'll be right back to this point down the road, providing we can pick ourselves up from here.

I've been reading about the repeal of the Glass-Stegall Act and think it may be one of the fundamental problems behind this mess. It really irks me that the legislation was passed to prevent banks from failing like they did in '29 only to get revoked in the mid '80's. What had changed to warrant the repeal?

I'm also thinking our American lifesyle isn't sustainable. When we have to farm jobs overseas because we can't afford to pay US salaries, that speaks of a huge imbalance.

I don't know what the underlining problems really are, but it sure seems like a huge mess we need to clean up. It's going to take some time and I think we are at the early stages of problem recognition. Right now it seems like the Goverment efforts are to avoid a total meltdown.

I'm pissed at the Government - Congress, SEC, Federal Reserve, etc. I think there was a lot of greed, corruption and stupidity that got us into this mess (and too much special interest money involved in politics).
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Old 03-15-2009, 02:22 PM   #9
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Will the Stock Market Rally Stick, or Vanish?

Paraphrasing JP Morgan, "Yes".
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Old 03-15-2009, 03:16 PM   #10
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I think the best would be?

Cautiously Optimistic
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Old 03-15-2009, 03:25 PM   #11
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I have no idea. But I have plenty of meds to help me weather any storm.
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Old 03-15-2009, 09:00 PM   #12
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I agree with Architect. I believe this is a sucker's rally. I see the market continuing to spiral downward. I think it will be like nothing we've ever seen before. I don't believe 2009 will bring anything positive in terms of the stock market....just my opinion.
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Old 03-15-2009, 09:06 PM   #13
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I think its going back to down too. But secretly in my special place I hope it goes to the moon.. hehehe
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Old 03-15-2009, 09:18 PM   #14
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It's very tempting for me to go jump in. All my life I'd been taught that investing in the S&P500 will return 8%, year after year, if you're patient enough; if that holds true, the years ahead must yield faster-than-normal returns. So it's hard to not to jump in while the iron's hot.

I don't know if the rally will stick or not, but sooner or later, a side effect of socializing losses will have to be that gains will be severely limited in the upswing.
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Old 03-15-2009, 09:22 PM   #15
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I agree with Architect. I believe this is a sucker's rally. I see the market continuing to spiral downward. I think it will be like nothing we've ever seen before. I don't believe 2009 will bring anything positive in terms of the stock market....just my opinion.
So, you're predicting the market down more than 89.2% from the high?
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Old 03-15-2009, 09:40 PM   #16
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My crystal ball says that the Dow will stay within 10% of 7000 all year and it won't be until 2010 that we see modest sustained improvement in the market as well as housing and jobs. By 2011 we'll begin seeing substantial gains in all areas. Time will tell if my crystal ball is in working condition.
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Old 03-15-2009, 10:14 PM   #17
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My crystal ball says that the Dow will stay within 10% of 7000 all year and it won't be until 2010 that we see modest sustained improvement in the market as well as housing and jobs. By 2011 we'll begin seeing substantial gains in all areas. Time will tell if my crystal ball is in working condition.

My "Magic 8 Ball" says:

Better not tell you now.
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Old 03-15-2009, 10:18 PM   #18
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Will the stock market rally?

From the master of dooms mouth to your ears.

RGE - Nouriel Roubini's Global EconoMonitor

Enjoy

JUG
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Old 03-15-2009, 10:30 PM   #19
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So, you're predicting the market down more than 89.2% from the high?
To clarify...when I said we'd see something like we've never seen before....I'm referring to an equivalent (89%) drop from the high only over a more condensed timeframe than 3 years (Aug 1929 to Aug 1932).
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Old 03-15-2009, 10:47 PM   #20
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When everyone is this negative it almost for sure that a rally will ensue. I watched Larry Kudlow's show on CNBC I believe on last Tuesday. He said he was having trouble finding a bull to be on his show. That was the clue for me to pump in some more money into the market the next morning which I did. Market has been up from there. It was clear at that point that just about everyone who was planning to sell had already sold. I'm not predicting this rally will last but I am starting to be able to read these moves much better now based on the amount of negativity that exists.
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