Well So Much For The Stock Market Doom Sayers

[tabs]

Today the S&P breached the 1000 level intra day...this was a key resistance level.

Also NADSQ pushed above 2000 intra day....another key resistance level.

Now we have to see if it can close above those levels.

At some point the market will have to retrace itself to test support levels..my guess 920 t0 945. If you get asuccessfull bounce from there next stop 1100 on the S&P.

The market spent quiet a bit of time at that level building a foundation if you will.

It was key that today or in the next couple of days that the SM breech the 1000 on the S&P and 2000 on the Nasdq. if it didn't do that the rally would have failed and we would have had to retest the 870 once again. NOw the market is setting itself up to go much higher. I have not looked at the charts to tell where the next resisiatnce level will be.

[tabs]

Well the S&P and NASDQ closed above those key resisitance levels....

Irony of ironies that in spite of BO the SM just went ballastic and took off like a rocket..it could very well happen as it is the only game in town that any money can be made in.

[Crowbob]

I see a moderate correction before the end of the year; Dow to >8,500 again. If it doesn't happen, I will deny I said it.

[einreb]

Originally Posted by tabs

Well the S&P and NASDQ closed above those key resisitance levels....

Irony of ironies that in spite of BO the SM just went ballastic and took off like a rocket..it could very well happen as it is the only game in town that any money can be made in.

Splitting hairs, but I'd argue its at its resistance level. 1000 is psychological. 1010 is something to talk about, but I'm not a technical analyst.

Anecdotally, I've started to hear more 'common man' discussion of the market. Just in time to overshoot and correct.

[tabs]

Originally Posted by Crowbob

I see a moderate correction before the end of the year; Dow to >8,500 again. If it doesn't happen, I will deny I said it.

NOt going to disagree with this...probably sooner then later. every market backs and fills...

Anything above 1000 on the S&P means it has broken on through and the rally still has legs..it has broken through the psychological ceiling.

I am not a real tech analyst who pours over the charts. But after 20 years oif watching the SM one gets a sense of direction and a bit of knowledge to be dangerous to oneself. It is as if you have seen enough water over the dam to see the direction of the thing. SM's are like living breathing beings..theat reflect the health or perceived state of the economy they are based upon.

[speeder]

But how can this be with Obama in the WH? You must be mistaken...

[tabs]

With only 10% of the Stimulus Bill being spent, it has to be considered that the economy is recovering on its own merits. The sell off in the SM was a reaction of panic to the impending implosion of financial sector of the economy.

Much can be said about the psychological effect of taking ACTION. to right the situation. It almost doesn't matter what that action is. It is the perception of that action that counts. That is where Keynes went wrong. Keynes felt it was govts role to stimulate or use govt resources to stimulate an economy when all else fails. It is not the money but the perception of action that something anything is being done.

FDR was not a Keynesain. FDR came into office when things looked very bleak in 1933. Keynes wrote his theoryin 1936, which was after the fact. He modeled his theories on what FDR did. FDR used the tool that was at his disposal or what he was in control of and that was govt. FDR understood it was action and not just govt money. It was the psychological affect of doing something that restored a confidence that everything would turn out all right.

[idontknow]

Originally Posted by speeder

But how can this be with Obama in the WH? You must be mistaken...

Must be the policies that Bush enacted before leaving office coming to bear.

[VINMAN]

So a few big Wall st firms are making some green. Big fuggin deal.
What about all the people losing their jobs and business's shutting down?? My company ( the largest telecom co. in the country) is canning 8000 people next month. Just heard another auto maker is getting rid of 11,000.

Yep the economy is booming!!

[Porsche-O-Phile]

Sucker rally. A big decline is coming. DOW will probably stabilize around 8,000 and S&P around 900. Just my $0.02 prediction.

[Dottore]

So Tabs you've been the biggest nay-sayer on this board.

Last I heard from you, we were all going to be living in mud huts, with the Chinese running the economy...

...Oh wait, maybe you were right...

[Leland Pate]

Sucker rally. A big decline is coming. DOW will probably stabilize around 8,000 and S&P around 900. Just my $0.02 prediction.

Yup. I don't think the imbalances and misallocated resources that existed prior to the collapse were allowed to correct themselves because of government intervention. It seems like we've effectively prolonging these imbalances and most likely making the resulting effects that much worse. The stock market is an emotional beast and not really a good indicator of the underlying economic factors that are at play. So, I don't get all worked up when it starts climbing with no real measurable correction to the key issues that brought it down to begin with. Not to mention that every penny of stimulus represents a NEGATIVE rather than a positive. I don’t believe the Sate can create wealth. It can only destroy or, at best, redistribute it. Physics tell us 100% efficiency in anything is not possible. The same applies to this example. Even if our genius central planners were able to doll out money with 100% efficiency and zero waste, we are still ignoring the core issue. The so called “stimulus” does no more than redistribute private wealth and defer repayment to future generations. Christ, we are spending the paychecks of unborn American workers and no one seems to care or understand.

Don't fret... the Keynesians are having a blast playing out their theories and experiments with your money and future. Respectable scientists conduct their experiments in a controlled environment. Economists conduct theirs on the population, in real time.

[Porsche-O-Phile]

Agreed. Keynesian Economic theory is largely rubbish and should be relegated to discussions in academia, not experimented with in the real world.

Many people are going to get badly, badly hurt by believers in government meddling.

[jyl]

This comment will no doubt irritate some of you.

In my opinion, claims that X is good for the economy or Y is bad or Z will move the stock market are of very little value if we don't research, include and crunch the numbers to demonstrate the magnitude as well as the direction of the claimed good or bad effect on the economy.

Our economy is very complex, very imperfect, and riddled with all sorts of internal inconsistencies. Some aspects of the economy reflect government intervention, others reflect free market competition. Some aspects are favorable to corporate profits, others are favorable to labor. Some are bankrupt, others are financially sound. Some are simply stupid, others are pretty smart.

If a person does not research and analyze the numbers, but simply talks qualitatively, then that person is free to focus on whatever aspect of the economy he is ideologically or emotionally passionate about, and to believe that aspect is the dominant force in the economy.

If I compare the economic discussions on PPOT to those in some other places, what stands out to me is our discussions are almost number-free. 95% of it is subjective, qualitative, ideological talk. It is sort of like how a group of English majors, fashion designers, or polisci majors might discuss an issue, as opposed to how a group of engineers or physicists would do.

[McLovin]

Originally Posted by jyl

Our economy is very complex, very imperfect, and riddled with all sorts of internal inconsistencies.

It is sort of like how a group of English majors, fashion designers, or polisci majors might discuss an issue, as opposed to how a group of engineers or physicists would do.

Aren't the engineering and physics fields marked by perfection and internal consistencies (i.e., mathematical principles, certainties and consistencies)?

During an unprecedented and historical period of shift in economic policy and philosophy, I'm not convinced that an engineer and his numbers are going to bring much more to a discussion on the future of our economy than a non-engineer who studies the economy.

[Leland Pate]

I wholeheartedly agree with you, John. There may only be a handful of people who truly understand a portion of the world's most complex issues... but that fact should not make the rest of us feel that we have no say, no voice, no opinion containing some notion of validity.

I am not an economist. Most of us here are not. But, some truths are pretty easy to find.

[cstreit]

Originally Posted by Leland Pate

I wholeheartedly agree with you, John.

WHoa... When did you get back?!

[The Gaijin]

Is any of this run up in share prices because of inflationary fears?

If US$1.00 is worth $0.50 in a few years - XYZ Corp. shares could go from $100 to $200 and have the same underlying value..

A lot of pensions and bonds and promises the government has made in the past few years, and it may be cheaper to pay off with cheaper money.

[tabs]

Originally Posted by The Gaijin

Is any of this run up in share prices because of inflationary fears?

If US$1.00 is worth $0.50 in a few years - XYZ Corp. shares could go from $100 to $200 and have the same underlying value..

A lot of pensions and bonds and promises the government has made in the past few years, and it may be cheaper to pay off with cheaper money.

Now you are getting it.

The Brit Lb is 1.69 today

The Euro is 1.4X today

The Yen is at 95.XX today up from a low of 93.XX


Which shows that the USD is in decline. Also consider last weeks 5 year note auction with a bid to cover ratio of 1.92....US debt is not selling well.

[dd74]

Originally Posted by tabs

Now you are getting it.

That it's a false rally? Thought so.