Wall St. is such a SCAM - See chart

[on-ramp]

the big Boys club down there on wall st. control the market.
just look at the chart below and the line I've drawn in red.

time to BUY - looks like Nasdaq heading to 3K.

[Jim Richards]

it's always time to buy, assuming you're not gonna have to sell for a long, long time.

[CamB]

What Jim said.

There's no scam - in the long term, the stock market should provide - through dividends and capital growth - a return which reflects the risk of investment.

I can't be bothered reading it, but this is probably accurate:

http://en.wikipedia.org/wiki/Capital_Asset_Pricing_Model
http://en.wikipedia.org/wiki/Modern_portfolio_theory

It applies in the long run - there is plenty of evidence that in the short run returns can bounce all over the place, and that (implicit in the calculation of beta - which draws the distinction between diversifiable and undiversifiable risk) that individual stocks will go up or down.

By the way, you are now 50% qualified to be an investment banker. Next stop, time value of money.

[techweenie]

Some of us remember when the NASDAQ was predicted to hit 15,000.

[Jim Richards]

yep. still waiting for trickle down to get us all the way up there.

[M.D. Holloway]

it is all coming together rather nicely - soon all will be one and one will be all, the slave the master of the master slave.

[Rob Channell]

Originally posted by LubeMaster77
it is all coming together rather nicely - soon all will be one and one will be all, the slave the master of the master slave.

"....and the blind shall lead the sighted......." - old lyrical reference

[RoninLB]

large number of hedge funds rock the financial world fast.

[jyl]

Some thoughts in no particular order:

Government is quietly but actively pursuing a weak dollar campaign in hopes of reducing the trade deficit.

Political tensions in oil-producing regions are not abating, Iran being the prime example.

High oil prices are starting to dampen demand, but not much yet. US is still on track to use more oil than 2005, China too.

Global economy's demand for raw materials, especially metals, is not yet being dampened, and commodities prices are high.

After 4 years of economic recovery, wage inflation is finally starting to appear.

Weak dollar, high oil prices, rising wages, high raw materials prices are all feeding through to consumer prices, in other words inflation.

Inflation is slowly warming up, not just headline inflation but even core inflation which has food and energy excluded.

Bernanke's job 1 is to be viewed as an inflation fighter. Fed will continue raising rates as long as inflation remains a threat.

Market has been prematurely celebrating the end of Fed tightening for a year now, driving higher in anticipation of rates finally stopping their rise. Well, Fed isn't done. (And market was probably going to sell the news anyway.)

10 yr treasury yield is currently around 5.5% (don't have exact # here). Looks like headed to 6%, at least.

The last time 10 yr was yielding 6%, in early 1990s, S&P trailing PE was 2 points lower than today. Multiples stll have room to contract. 2 points off 15X is -12% ish.

In early 1990s, economy was recovering from a major recession. Year over year growth of forecast EPS peaked in 1995.

The current economic recovery is getting old. Put another way, we are getting late in the economic cycle. Remember, economy bottomed 4 years ago.

Late cycle sectors typically include the industrials and materials. Industrials and materials have soared in past year. They may have come too far too fast. No other sector appears ready to take over leadership.

So market internals have been awful. The chart of S&P looked great, going up like a ruler. But things like advance-decline ratios, % of new highs, etc have not been good. I am not a market technician, but the smart technicians I know have been telling me about the bad internals for 6 months now.

Fundamentally, stocks are also losing steam. Year over year growth rate of EPS forecasts peaked 1 1/2 years ago. Forecasted growth has been fading ever since. The peak in momentum is visibly well behind us - not in front of us as investors thought in 1995. So why shouldn't we go to P/E of 1995?

This is also a mid-term election year, with a very weak President. Investors dislike uncertainty, and market often struggles in election years. Won't see action on budget deficit in election year, party in power tries to buy votes with spending and tax cuts.

We are also entering summer. Market often struggles during summer months. I'm not clear why. The old cliche is that Wall St goes to the Hamptons so volume shrinks, seems too simple. Another possible reason is that we enter the year with over-optimistic forecasts for EPS, and those forecasts get taken down each quarter until they are too low by 4Q, then companies beat the numbers and market is strong in 4Q. Not realy sure.

Then add the housing bubble, if you are a believer there. I am.

These are all some explanations for the stock market weakness since March.

I'm short the NDX w/ rest in cash, have been so late Feb, so I was too early but I am now making some money.

I do not know if we are headed into a genuine economic slowdown or worse, a mere so-called "mid-cycle correction", or simply a quick selloff followed by a resumed rally. I personally think it is one of the first two, actually leaning to the first. But anyway I figure the trend is now my friend. COMP has broken down, through 50 day MVA, 100, now the 200. NDX looks worse. SPX broke through 100 day now approaching 200.

You can argue market is oversold. VIX and VXN have shot to highs, RSI is at lows, I'm guessing market bounces this week, COMP and NDX go back up to 200 day. I bought some stocks today, trying to hedge my NDX short. If COMP and NDX can't break back above 200 day, then I expect to see the market really get scared.

Anyway, probably more than anyone really cared to read, sorry.

I agree BTW that if you have a reasonably long investing horizon, more than a few years, then this stuff isn't really important. As long as you're not investing at the top of a historic stock market bubble - which this isn't, that was 6 years ago - your chances of making money are very good.

[jyl]

I thought I'd rambled like this, recently. I went searching and here it is. The real reason gas & oil prices are so high (not a joke)...

[techweenie]

Originally posted by LubeMaster77
it is all coming together rather nicely - soon all will be one and one will be all, the slave the master of the master slave.

EeEeEXECELLENT!

[turbo6bar]

If we see another bad day for ^NDX/QQQQ, shorts will look really good.

10 yr treasuries are yielding 5.1-5.2%, currently.

[jyl]

Originally posted by turbo6bar
10 yr treasuries are yielding 5.1-5.2%, currently.

Oops, guess you can tell I'm not a fixed income guy.

[RickM]

Originally posted by techweenie
Some of us remember when the NASDAQ was predicted to hit 15,000.

I remember the prediction for the NASDAQ to hit 5K and the Dow to 15K but not NASDAQ to 15K.

[techweenie]

Originally posted by RickM
I remember the prediction for the NASDAQ to hit 5K and the Dow to 15K but not NASDAQ to 15K.

Wired Magazine talked about it alot. 1998 or so.

[jyl]

Not an impressive open. Only econ news I see is lead indic neg mkt expected pos.

[TerryBPP]

Anyone heard about the splitting of phillip morris? Supposedly Altira Group Inc., which is the parent company of Phillip Morris and Kraft is going to split into 2 completely seperate companies. Its a ploy to completely seperate the 2 names. Might produce some good increases for the Kraft side.

[jyl]

And a more unimpressive close.

Tech (GTC) decisively below 300-day, NDX too, now seeing DJI and SPX falling at same rate as NDX.

Oil, oil services, and materials sectors now leading the decline.

Market has declined every day since 5/10.

I still think market will try to rally again this week -

[turbo6bar]

Originally posted by jyl
And a more unimpressive close.

That's for sure. Strong negative breadth and 152 new lows vs 18 new highs in the NYSE. Anyone see a bottom in there?

[jyl]

As said, I think mkt tries again to end wk w/ rally.

Wonder if seen capitulation.

Volume today was lower.

Heard most selling been hedge funds, from net long to less net long.

Long-onlys not running scared yet.

Not see traditional defensives outperforming.

Not seem like capitulation.