How long will it take for the stock market to recover from the last 2 weeks?

[wisemancumth]

and will it get worse before it gets better.

[popowich]

Sorry, can't predict such things. Patience. Think long term.

-Raymond

[THERESA]

How's it going now?

[Raven]

I have two nieces that are working for AIG and are holding their breathe waiting to see if they have a job.

[popowich]

How's it going now?

Good? (down)

The farther things drop the better bang for the buck in my 401K and IRA (almost 2009!) contributions.

My regular account is 100% short SPY and profiting from the ride down.

I took a hit though on not getting the pop I was hoping for with the bill passing, oh well.

I think I'll be happy if I lose less this year than the average return. ;)

-Raymond

[esnagel]

I think it'll take about 2 years to get back to the levels we saw 1 year ago. Last October we were (the DOW) at 14,000, now its under 10,000. The last time we saw that was October 2004.

October 2004: 10,000
October 2007: 14,000
October 2008: 10,000

[Kaos]

Most financial experts predict the market will go to 8000, I'd guess 7000. Time to get back to "regular" obviously, unknown, but it will take a long time for sure. Today's freefall is a truly bad sign. If you look at the charts for the past ten years, you will see, we truly lack support anywhere to stop this. Not a good sign! I predict we will now see others going under here.

Bailout, what a joke! I feel you're nieces pains though Raven, my husband works in the financial field and we hold our breathe everyday hoping he still has a job!

[RJD]

3-4 years...

July 2011, before it hits 14,000 again.

[demsco]

The market has a lot to recover from, but it is not just the US market it is the world markets. As long as the credit freeze is kicking, which will be for a long time, the markets will not have the ability to recover.

Today was not a good day. In order for any recovery to happen we need complete
capitulation which did not happen. Instead we saw a rally at the end of the day which means that there is more to go. The saving grace is low volume, however tomorrow when people see what happened today it could be very interesting.

I would say 40% + cash position is a very good move right now. I personally think 8,000 is a good estimate with 7,000 not out of the realm of possibility. The reason for this is the basic fundementals of the market are so weak right now and the trouble in Europe is hitting critical mass now.

The dollar only gained strength today because it is slightly strong than the euro, but now they are saying interest rate cut. This with the bailout will devalue the dollar long-term which is not good. There is still Asia that needs to come front and center as well. If problems happen there as well this will further drag down the markets.

What is scary is the fact that everyone said the bailout package would help the markets, but it declined 150 points on its passage. I would not be a heavy buyer for another week or so. I would take my cash and systmeatically invest...in a week after the you know what hits the fan.

As far as when we see 14,000 again, 3 to 4 years if we are lucky. GDP will be reduced by a full percentage point over the next 3 years because of the added debt load of the bailout and we have no idea if this will even work. Out of the $4T in mortgage backed bonds $700B is not enough to really do anything. That is only in the US as well, it is $14T world wide, so only time will tell.

I would be looking for an interest rate cut in the next week which will cause a short term rally then the sell off will continue. there is too much money looking to get out of the market including $2T in hedge funds which had their legs cut out from under them with the short selling restrictions. These are very interesting times and just as it happened in 1987 we are seeing a slow bleed which will be followed by a sharp decline.

Be very careful and rememeber, sometimes cheap stocks are just cheap stocks and not real value...Lehman was a good buy at $2 :-/

[harryn55]

Read my response at top of page.
http://www.discussny.com/showthread.php?t=4819&page=2

Dow will go to below 5000.
20+ years to get back to 14000.

[Raven]

My one niece just had a daughter start her first year of college. She got a scholarship but the scholarship did not pay for lab fees and books.

I feel for you to Kaos with the kids and all. I wish your hubby luck and hope that he lands on his feet.

I feel you're nieces pains though Raven, my husband works in the financial field and we hold our breathe everyday hoping he still has a job!

[demsco]

Well, this thing is getting uglier as we speak. Today we saw another accelorated decline in the market. Bargin hunting was not in season and the injection of another $100B into commercial paper by the Fed did zero in the credit markets. The asian markets are in another steep decline, 3 to 5% accross the board, which could spell a very weak day in the US again.

We will see what happens in Europe, but given RBC's current issues and the now escalating bank crisis in Germany and the UK I do not have much hope. My guess is we have another blood bath in the market tomorrow. I think Friday may be the day, a three day banking weekend with no one looking to go long over the weekend could spark a severe decline. Next week with option experation will be extremely volitile.

So, is the worst over yet? Nope, not by a long shot. I would still hold a 40%+ cash position in money funds, as yields will go up because no one wants to buy the paper, and continue selling into any rally. I could, and hope, I am wrong, but the data shows this thing is heating up even more.

On the plus side, oil is holding onto its new low...its now only 3.30 a gallon. Also, for all the Obama supporters, this will solidify his victory in November, providing another suprise like Wright does not happen, but I highly doubt he can keep his promises now, taxes have to go up as the Feds will have to issue way more debt than the $700B currently pruposed. Cash is king right now. Good luck to all.

[popowich]

I'm having some fun shorting SPY and making some bucks back on the way down. :)

[demsco]

Probably a very good call. The world wide interest rate cut is a joke, reducing interest rates does not create credit. Did you see Iceland is insolvent? Its crazy right now...9% in Japan, wow...thats all I can say WOW!

[popowich]

Just trying to offset some of the bad moves. :banghead:

[demsco]

LOL, join the club. Very scary times right now. I am not even trying to be negative, just all the data says it is BAD. The Fed is now lending directly to corporations.

[demsco]

Highly unusual trading going on. Dow jumps 10, 20 or more points in seconds. The world cut and home sales have helped to build in a base, but I don't think it will hold. Be very careful, even on the short side of things. My favorite saying is bulls make money, bears make money but pigs get slaughtered.

[popowich]

I'm trying to learn how to be more active but still careful with my strategy as I go here. I have learned some real money lessons the hard way. Don't try to go both ways or work against the grain. Things are generally going down now. Make some down bets, cash out and be happy after making some bucks. When things pop up a little bit, make another down bet. No trading in the first or last hour of the day and close trades the same day. This removes most of the crazy fluctuations at the beginning, end, and off hours from having an impact on me. No more than 2 trades/day. I made a little this morning. Got back in when SPY got back up to $100 again. Will cash it out later this afternoon at some point. I don't really know what I'm doing and it's essentially high stakes gambling so while I'm messing around like this I figure it best to remove as much risk as possible. All my trades have been against SPY for a few days now. I've made back about 20% of my September GOOG losses in this week. Patience. :)

-Raymond

[demsco]

Definately no trading in the first hour. I do like to trade before the close simply because you can get a feel for the market, but you can get burned. I am just an old fart at this stuff now...15 years in the industry makes you a bit cynical I guess :-)

[THERESA]

Highly unusual trading going on. Dow jumps 10, 20 or more points in seconds. The world cut and home sales have helped to build in a base, but I don't think it will hold. Be very careful, even on the short side of things. My favorite saying is bulls make money, bears make money but pigs get slaughtered.


Someone else said that before. (http://www.discussny.com/showpost.php?p=26311&postcount=8) ;)

[Kaos]

You sound like me Ray! Demsco decided a few years ack that he could teach me how to do options day trading. First you should know I'm a wimp and cheap person to begin with. He taught me charts and a few things and then would make me work the account while he was working in whatever state. It was fun sometimes. I love the rush of a good day, but man those bad days really, really sucked!

Speaking of which...aren't you supposed to be getting your work done demsco to get home next week? LOL!

[demsco]

I am multi-tasking...kind of. What a day, we have a bet on which day is going to be the worst. So far we both won and lost today...

[Kaos]

^I didn't lose anything yet today!!! sorry off topic guys, but I'm a competitor :D

[demsco]

haha, look now...

[harryn55]

Demsco I have a question.
Using technical analysis and assuming the next down turn I see minor support at Dow 7500 but if that is broken I see no real support until Dow 1000. Am I missing something?

[demsco]

I have only really looked at the 10 year chart, so I am not seeing it past 9,000 or so. I do know that there is plenty of support between 1,000 and 7,000 mainly in the 4 - 5K range. But technical analysis is not an exact science and fundementals come into play, such as valuation etc. Given that it is fair to say that the market could go much lower, say the 4 - 5K level, but it is unlikely to, I hope at least, and it should rebound based on extremely low valuation. Nothing is outside of the realm of possibility right now. These are seriously dangerous times.

I hate being the doomsday guy, and I am usually not, but this is so severe that the end is not insight yet. when paulson says this will last awhile, that is scary...this guy is supposed to bring our confidence up, not down. I am rooting for the big one only because we need it to have a recovery.

When the Depression ended we had very sound regulations which led to the greatest economic expansion we ever had. In our governments infinite wisdom they undid these regulations, like Glass-Steagal, because the markets could "regulate themselves", HAHA. So, a major decline would cause the tossed out regs to come back into play, which is best for us all. However, the result of what I am looking for is not pretty, but I fear it may be unavoidable.

This, my friends, is a very, very, very dangerous time. We still have not seen what is behind the curtains or what is the real problem. The sub-prime stuff was the catalyst, not the real problem. I cannot see it all yet, but it will surface eventually...after the fact.

On the other hand, everything could be fine, I hope I am totally wrong - which is a first ;-P

One last thing, I like to track the Russell 2k to see where the market is really heading. It ususally leads the dow and NASDAQ.

[demsco]

A good story to look at: http://www.moneyandmarkets.com/the-bond-market-bubble-8724

History repeats itself...

[popowich]

KISS. The peeps are scared. Bet down.

-Raymond

[demsco]

KISS. The peeps are scared. Bet down.

-Raymond

They are, with good reason. The open looks higher on the news that the government might take stakes in banks. Still looking for the big one, it needs to happen.

[popowich]

Using technical analysis...

I don't know anything about technical analysis, but...

According to this (http://biz.yahoo.com/indexuniverse/081009/4626_id.html?.v=1), we may be looking at a short term rally.

We're entering Thursday following six straight down days on the S&P 500. That hasn't happened all year. When we had five down days in a row in January—the previous longest streak for 2008—it was followed immediately by a 10% rally.

-Raymond

[demsco]

Yup, it will more than likely rally. Unemployment numbers were OK and the gov investing in banks will cause the market to lift short-term. Overnight markets were up, but I think a 2 or 3% rally is all we can expect. Tomorrow, IMHO, will be a down day. Yesterday showed the negative sentiment with 3 or 4 reversals in trading closing down. it will take awhile for the market to break up as people will more than likely sell into strength.

[popowich]

Scottrade called. No more fun for me. Paying my bills now. :)

-Raymond

[demsco]

LOL, what did they say?

It is crap like this that will cause the market to drop, good news, but oh wait this is a problem...

http://www.cnbc.com/id/27098825

[demsco]

Wow, 1,600 points from the 1st until today. Unreal, the 5 day chart is building a smily face, Kaos knows what that means, but it means there will be a major move one way or the other on heavy volume. If you look at longer term charts with the volume showing you will always see the volume look like a smily face or a U on major moves. It is not always 100%, but its close ;-)

[popowich]

LOL, what did they say?


I don't have enough in my regular trading account to meet the minimum requirements for people that fall into pattern day trading patterns. Even 1-2 day is apparently too much, was hoping I could slide by. I already had my first warning and posted it a few weeks ago in one of the threads. Oh well. I'll sleep a little better at night now. :)

-Raymond

[demsco]

Finally, another great article: http://www.cnbc.com/id/27099195/page/2/

About Greenspan and the current trouble. I have been saying he was the root of this for sometime now...

[popowich]

Scottrade called. No more fun for me. Paying my bills now. :)


Crap, I missed out on $1000+ today. :comp26: :banghead: :gah: :stompfoot:

-Raymond

[demsco]

Perhaps tomorrow. Still completing the smily face and when people see this they are going to freak. Unreal, even though I expected the declines it is still heart breaking to see.

[Kaos]

Are you all ready for a ride today? This is my day I called it...the one time I would be happy to be wrong but the world collapse last night doesn't loom well for todays market! I got my cash on hand though :D

[popowich]

My only stock investments are in my retirement accounts.

I shouldn't give less of a crap about the short term market anymore.

Yet, I'm still sitting here looking at SPY 86 wanting to :crybaby2:

-Raymond

[popowich]

Harry, can I send you that $10 now? :D

[Kaos]

I'm just sitting here watching it hold around 7900 praying it doesn't breakthrough...the free fall possibilities are truly terrifying. Of course the world collapse last night does not favor well. This is so bad!

[demsco]

Nationalization, I blogged about it last night at 1 AM, but here is what was said earlier today on CNBC:

http://www.cnbc.com/id/27114651

No link to my blog yet

[Kaos]

Here we go again! Anyone else getting whiplash from this highly volatile market? We knew it was going to happen after yet another overnight world collapse but cnbc always makes the "fear atmosphere" even worse that drives me nuts!

[demsco]

Even I think this is a bit overdone now. Today we should test the lows again and be done with this. My primary concern has always been the banking systems liquidity, but with the Feds move that risk is mitigated to zero now. However, the recession will be fast and furious with unemloyment jumping to between 10 and 15%. We will see what happens, but hope for a bottom here which means another 500 points down, sorry, but we need it to recover. I think now is a decent time to start dollar cost averaging into equities, specifically in the Asian markets and specific sector ETF's like consumer related issues.

[popowich]

There was a nice uptick today. Are the last couple weeks the bottom?

[wawawebis]

I have two nieces that are working for AIG and are holding their breathe waiting to see if they have a job.

My co-worker's son just got laid off from AIG. And I think NYS just bailed them out too....

My guess is "Wall Street" will never be the same again. Not size wise, nor will people be confident in it making sense for a long long time. Maybe a generation?
Of course, I base this entirely on my gut and not on any good science, hey, maybe I will run for VP someday...:muahaha:

[demsco]

There was a nice uptick today. Are the last couple weeks the bottom?

I think we are getting there, but with this move today there was no volume and it is the end of the year for mutual funds. So, it was a combination of being oversold and mutual fund window dressing. I think we are oversold, but we still have a major move coming with heavy volume. In my opinion it will be to the downside because we have not even hit recession earnings yet. I post on the market everyday on my blog, sometimes I am right and sometimes I am not, but I am close ;)

My co-worker's son just got laid off from AIG. And I think NYS just bailed them out too....

My guess is "Wall Street" will never be the same again. Not size wise, nor will people be confident in it making sense for a long long time. Maybe a generation?
Of course, I base this entirely on my gut and not on any good science, hey, maybe I will run for VP someday...:muahaha:

I disagree, investing is a way of life for Americans and we have very short memories. It is unlikely that you could remeber the last big selloff before this year, or the one previous to that even. I do think that Wall St will not be the same as there are no more investment banks anymore and regulations are coming, but again our memories are short...I will still be waiting for my dividend check from the $350 billion @ 5% interest we just loaned to the banks and we will "profit" from :censored1:

Yup you can run for VP, just become a community "activist" and continually run for higher offices without actually doing anything and heck you could be president :banghead:

[harryn55]

I disagree, investing is a way of life for Americans and we have very short memories.

Since this will be the worst recession since the depression, I think our memories will lengthen because of the beating that we will take.


Yup you can run for VP, just become a community "activist" and continually run for higher offices without actually doing anything and heck you could be president :banghead:
Agree!!!
Slick O