Will the Stock Market Rally Stick, or Vanish?

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.
 
My crystal ball is STILL in the shop.... :)

I am becoming more hopeful, though.
 
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?
 
dex said:
I think we still have to deal with the treasury bubble and dollar bubble.
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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. :(
 
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).
 
Will the Stock Market Rally Stick, or Vanish?

Paraphrasing JP Morgan, "Yes".
 
I have no idea. But I have plenty of meds to help me weather any storm.
img_795929_0_0ff25d720d269205de68fc80b5a9b3e4.gif
 
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.
 
I think its going back to down too. But secretly in my special place I hope it goes to the moon.. hehehe :flowers:
 
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.
 
TheSweetLife said:
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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So, you're predicting the market down more than 89.2% from the high?
 
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.
 
aaronc879 said:
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.
Click to expand...


My "Magic 8 Ball" says:

● Better not tell you now.
 
Bikerdude said:
So, you're predicting the market down more than 89.2% from the high?
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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).
 
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.
 
I am waiting for the big payoff :whistle:

This is how it usually works:

first 10% - suckers rally

2nd 10% - really a suckers rally, no way will they fool me again

3rd 10% - maybe it is safe to go in

4th 10% - I should get in, tired of this 2% Treasury

Average market timer will miss the first 40% of the rise. This is why they perpetually underperform the indicies. This move could easily happen in weeks when it turns, you just never know when it will turn. We could easily go back down to the lows.

I am willing to bet that the money I put in every month this year will be worth way more in 15 years. If you are trying to live off of it today than that is a different issue.
 
DJRR said:
I am waiting for the big payoff :whistle:

This is how it usually works:

first 10% - suckers rally

2nd 10% - really a suckers rally, no way will they fool me again

3rd 10% - maybe it is safe to go in

4th 10% - I should get in, tired of this 2% Treasury

Average market timer will miss the first 40% of the rise. This is why they perpetually underperform the indicies. This move could easily happen in weeks when it turns, you just never know when it will turn. We could easily go back down to the lows.

I am willing to bet that the money I put in every month this year will be worth way more in 15 years. If you are trying to live off of it today than that is a different issue.
Click to expand...

That's the way it has worked for me in the past, so I have stayed in. Unfortunately I didn't miss the 50% decline this time either.:banghead:
 
Dawg54 said:
That's the way it has worked for me in the past, so I have stayed in. Unfortunately I didn't miss the 50% decline this time either.:banghead:
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For the sake of your forehead, at some point you may want to use the rally to take a little out of the market. Maybe not much yet since it's still way underwater, but at some point if it continues for a while it might not be a bad idea to take 10-20% of your stock portion and move it into something safer. Sounds like your forehead could use the TLC...
 
I wonder how many of us are going to change our asset allocations when the market recovers.

I don't think I will change my asset allocation, but I will be keeping my eyes open for something else to do with my money other than investing all of it. Well, aside from spending it (that doesn't count). :LOL:
 
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