Dow

StevieJ

Generali wrote: »

Well as someone who aims to end up with a big fat long position in equities I'd quite like prices to fall further before I buy.



Stone Me! Up 5% today. This is very silly. Up 5%, down 3%, sideways 8%. Volumes must be thin still(???).

I still don't think we've hit capitulation point in the market - everyone on Bloomberg TV and in the press still talks about buying back in at these levels. 1974 saw falls of something like 75%, why not this time?

Because all the bad news is in there, if something unexpected happens (like a three day week) then maybe.

Generali

StevieJ wrote: »

Because all the bad news is in there, if something unexpected happens (like a three day week) then maybe.

My feeling is that we already had the unexpected bit - that being the banking system worldwide almost destroying itself.

Nobody's economic models contain assumptions for that so they've all broken down. I've worked with some very senior, experienced and intelligent people in the hedge fund world. Pretty much none of them have a clue where we're going from here as for them it's like their compass has had North change direction.

The bad news isn't all in there. What happens if Obama puts a 50% duty on car imports? Or insists that the Chinese push the value of the Renimbi up by 50%? Or the Russians shut off the gas to Germany? Or the Chinese banking system (that supports the Chinese manufacturing system by diktat) goes bust or...or...or.........

My belief is that there's a lot of complacency priced in. Who knows though. If I could predict stock prices I'd be lying on an Australian beach without a care in the world. Ah, hang on a sec..........

Kez100

There is probably a lot of forseeable bad news priced in - like profit warnings to some extent but it won't be pricing in things we could never imagine will happen (like your list). If and when one does or starts to look likely then we could be in for another day of freefall.

The daily volatility - whatever the level - goes to show they are headless chickens at the moment.

StevieJ

Kez100 wrote: »

There is probably a lot of forseeable bad news priced in - like profit warnings to some extent but it won't be pricing in things we could never imagine will happen (like your list). If and when one does or starts to look likely then we could be in for another day of freefall.

The daily volatility - whatever the level - goes to show they are headless chickens at the moment.

But it will also be pricing in things that will not happen.

purch

But it will also be pricing in things that will not happen

That's why trading is such fun !!!!! :T :beer: :T

sabretoothtigger

If you want the unexpected, have a listen to peter schiff.

He says the dollar will crash not continue to rise because of the problems we have mentioned here before, they are in worse shape then the uk

The bad news isn't all in there. What happens if Obama puts a 50% duty on car imports? Or insists that the Chinese push the value of the Renimbi up by 50%?

China will do the opposite or is doing that apparently.
Obama plans to spend as a solution which causes more reliance on foreign debt and he says china and japan will withdraw their support in order to fund their own spending

http://in.youtube.com/watch?v=pGHODRNJqRo

He says there is a trend in gold vs the dow. 15 to buy the dow at year start, 10 now and eventually ends at 1 just like in 1980.

Long term chart, Gold price vs the Dow



Keep clicking the image for a bigger version

Kez100

So what happened today then? Massive hedge fund fraud, increased HBOS write offs and possible failure of the US car industry with an overnight +5% unemployment rise if it does and the FTSE drops by only 2.5% and the DOW 1%. I reckon traders must all be on Fluoxetine.

sabretoothtigger

Maybe they are betting the car loan will get passed. A rise before close, so alot people wanted to be locked into changes over the weekend

Last I heard senate says no and now they will take the money from 700bn tarp fund so stuff the senate they'll get the money anyway?

car unions refuse to lower their pay, apparently they get 70 dollars an hour in health care benefits Chapter 11 would let the companies change that so would be the most positive move as far as I can see.

Filling a bucket with a hole in it is irrelevant compared to actually fixing the leak

Kez100

ahhhhh.......ok. Hadn't heard they were fiddling the access to aid. Help is all well and good but as you say leaks need fixing. Also I'm of the opinion if they don't go that way it will only delay inevitable as their cars are rubbish! Also bad for environment so that goes against obamas climate change view. I'd say reinvestment in new car technologies is money better spent.

Will this affect us much. I still thought ford was British! I really shouldn't go out without an adult.

sabretoothtigger

We dont really have our own car maker any more, we have lots of car factories though. Yes its bad for everyone

I dont dislike all their cars, suv yes but they had a beautiful black corvette on newsnight just now, apparently 1/10 of americas workforce is reliant on gm

If there was going to be a signal for a big crash then I guess this is it and a relatively optimistic market just beforehand is typical

I read expensive cars are cheap now, a 1 year old 60k audi is worth 28k



http://www.thisismoney.co.uk/investing/article.html?in_article_id=448383&in_page_id=166