What's with the DOW?

Theories please?

How in the hey with the housing market busting, and local economies falling apart is the DOW going through the roof?

I can only judge by what's going on around me, watching locally in my own community that up until a year ago was charging forward with non-stop growth, that has now turned into a nightmare of a pull back.

Foreclosures and evictions are rapidly rising, people can't even qualify for rentals, and they are losing their jobs.

So what's with the DOW? Does not compute.

Originally posted by Relentless
Theories please?

How in the hey with the housing market busting, and local economies falling apart is the DOW going through the roof?

Nothing to see here. The DOW only consists of about 30 components, none of which touch upon the housing market, except perhaps contributing fields like construction equipment. Additionally, the DOW consists of a price-weighted average, where a fall in a lower price stock (say, $1), can be negated by a rise of the same amount in a higher-priced stock. Even though their relative values are quite different, they are computed the same.

That's why, despite the DOW's all time high, the collective response from the business world was a shrug followed by the word "meh."

I have been reading a lot about economics lately and i have heard talk about a socalled bull trap. Its where in this case the DOW goes higher only so the rich people can unload there stock afther which the market will fall very fast.

The Tops are in. Should we get a DJII break-out to a new all time high above 11,750, you will also witness the biggest BULL TRAP in history. The World's Markets will all crash. It's not a question of if, but only when. My best guess is either it has already begun or because of the tremendous liquidity still floating around, there is still the possibility of one last suck-in rally beginning sometime in late October or early November and lasting not much longer than January 2007. It will be a huge suck-in rally and much too dangerous to play. It will, however, provide the absolute best shorting opportunity of your lives, should we get it.

source

I was thinking about this this morning. The DOW coupled with the price of oil dropping it almost feels like something is taking a deep breath and with it's release everything is going to fall flat.

It's simple. Energy prices are down, gold is down so investors are putting their money back into stocks raising the Dow. ( Gold had a sell off Tue.)

What this is tell us is that things in general are turning around. Faster is some areas, slower in others. This is also telling that World situation is calming down.

Roper

Piet, thanks for the link. Interesting that this info was posted in August.

Roper and thelibra, I think you are out in left field (nothing personal). I just see some major red flags here. Especially by your own description thelibra. If the DOW isn't a reflection of the true economic state (doesn't show the impact of the housing market) as is correct, it's a house of cards.

The news this morning was a huge rah rah over the "good times" and we aren't in good times. The little guy is in trouble and the little guy sees the DOW hitting an all time high as "it's gonna be okay". I think this is very dangerous.

its an engineered bull market,
pretty much what DDay explains...

my C.T. thinking says that its all about the midterm election,
GW & Cheney, pursuaded the mega-oil-corps to temporarily reduce profits
so the 'feel-good' rebound could occur.
the 'in-debt-to-their-eyeballs' middle class are in for a rude awakening,
with the anticipated recession in '07 as housing markets tank, auto corps
go private, as globalization culls more & more domestic career paths,
and more & more pension & retirement plans get dumped into the Federal
Govt's Pension Fund program.

NK, Iran, Darfur, Iraq, AQ, Hamas & Hezbollah & Israel are still there,

me, i'm in the act of investing more into my ROTH Acct. of Precious Metals
(as of this morning) its now 8:25 eastern time on 4 Oct '06

Originally posted by Relentless
Roper and thelibra, I think you are out in left field (nothing personal). I just see some major red flags here. Especially by your own description thelibra. If the DOW isn't a reflection of the true economic state (doesn't show the impact of the housing market) as is correct, it's a house of cards.

Ummm... Yes? And how does that put me in left field? I didn't say anything to the contrary. The DOW is a joke, and has never been taken by serious economists to be a reflection of the true economic state. It reaching an all-time high is not a indicator of anything more than what we already know: big business is getting richer. That's pretty much it. That's why the business world went "Meh" at the news.

Originally posted by Relentless
The news this morning was a huge rah rah over the "good times" and we aren't in good times. The little guy is in trouble and the little guy sees the DOW hitting an all time high as "it's gonna be okay". I think this is very dangerous.

The only people giving a huge rah over the "good times" that I saw were Faux News and... yeah, that's pretty much it. Well, probably the 30 companies comprising the DOWJIA but otherwise, no one cared because it's just not taken very seriously as an indicator other than whether or not big business is doing well.

This is why there isn't just one stock market, and why we have the NYSE, the DOW, the S&P, and so forth. They all have a particular focus that they indicate as a result of the component stocks traded. Seriously, there's nothing "red flag" about this at all. At least, nothing more than what we all already know, the Housing market is on the decline, interest rates appear to be peaking, elections are coming up, and the world in general is still pretty eff'd up.

Originally posted by Roper
This is also telling that World situation is calming down.

Roper

Yeah, the calm before the storm...