Posted on 03/24/2009 9:29:45 AM PDT by jiggyboy
[T]here were six major false bottoms after 1929 in the DJIA each followed by an average bear market rally of 29.3%. Investors who “bought for the long haul” in any one of these six great rallies were mercilessly slaughtered and did not make their capital back for many years into the future. Indiscriminately buying into the top half of a bear market rally is a surefire way to quickly and efficiently destroy your capital!
(Excerpt) Read more at zealllc.com ...
"Stock bulls and bears alike are marveling at today’s magnificent rally in US stocks.
"The bulls, not surprisingly, claim that the stock market is discounting a future recovery in early 2002 and that the ultimate long-term bottom for US equities was laid-in after the attacks in late September. After periodically un-muting Bubblevision to listen to some of the guests over the past week, the popular bullish consensus seems to be that the great gains of the last couple months are the vanguard of a thrilling new bull market in stocks. Investors are being told by Wall Street to buy now or else risk missing the coming recovery and bullish feast.
"The bears on the other hand, also not surprisingly, claim this current action is little more than a spectacular bear market rally. Although bears don’t appear on the mainstream financial media much these days except to be poked at with sharp verbal sticks and ridiculed by the bullish hosts, there are still quite a few surviving in the financial wilds. The bears point out that bear market rallies are by definition extreme and spectacular, just like this one, so the bear market can lure more bulls to their doom as it slowly annihilates bullish sentiment.
"Both bulls and bears alike are having their patience tested by the current action. Since the great rally is losing steam and has run up so rapidly, the bulls are beginning to feel gnawing fear and doubt at the back of their skulls. Are we due for a serious pullback? The bears are also having a tough time, as they cannot believe, based on dismal fundamentals and the horrible economic news, how far and how fast the market has run. Is this rally the real thing, the end of the bear market? Doubts abound in both camps.
(i.e., same "stuff", different day, er, year)
That’s all this is....bear market rally. This economy is headed for the wall.
ping to fellow gloom and doomers
This one is real. Obama’s stimulus plan is working LOL
The real question is what the effect of the 1T new money will have on stockmarket. Bear market rallies?
1.) The Fundamentals Have Not Changed.
2.) Wait for March Unemployment Data (Pre-Double Digit)
3.) Wait for Q1 GDP (Negative)
4.) Wait for Cap & Trade
5.) Wait for Inflation
6.) Wait for the Bush Tax Cuts to Expire
7.) See #1
What I’m expecting to happen is for the market to climb above 8,000, because the smaller guys will think things are okay and start investing again.
Meanwhile, the big traders will dump everything, because they’ll have made back a good portion of their losses.
That will probably coincide with the news that China is rapidly getting rid of the trillion or so dollars they hold.
At which point, the Dow will head south rapidly.
What does 1987 look like?
I will take Depression Dow behavior for $1000, Alex.
Looks like it took until about 1990 to recover to the pre-crash area.
http://www.the-privateer.com/chart/dow-long.html
Not touching this market. That being said, I may pick a few penny stocks like Sirius/XM. At 12 cents a share you can buy a few thousand shares for a couple a hundred bucks.
Are you able to move to DC on short notice and work for the WH? There are several unfilled openings at Treasury(17 out of 18) needing Senate confirmation.
They could use a clear thinking, wise man who actually understands economics - never mind.
That would be a mistake.......IMO.
Remember, he’s only eligible if he’s cheated on his income taxes during the past few years.
I bought some more FAZ (triple-short-financials) this morning. Bought some yesterday at the open as I had written before the open.
These House Banking Committee hearings are NOT going well at all for Baldy and Turbo Timmy, so I’m thinking that Congress isn’t intending to give them any more blank checks to pass to their banking buddies.
I’ll be in DC next week but only for tourist functions and to possibly help Geither with his taxes. ;)
Hopefully I won’t run into the, uh, uh, uh, uh, TOTUS. If so, I’ll render the proper courtesy, i.e. sig heil, etc...
But no bear market rallies, at least that can be determined from the scale of the graph. 1974 and 1982 had a couple, though.
Yes, that does seem eerily familiar.
Give him a few squirts of room-temperature Lemony-Fresh Windex via Swiffer pad and he’ll be your buddy for the whole trip. Give him our regards. :-)
Even if this would happen to be a new bull market which I don’t believe it is, the indexes would still have to retest the lows for technical comfirmation. So any giddy buying in this environment will be met with a thunderous thud very shortly. Buyer Beware!
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