Will this be Black Friday? - 10/10/08, page 32

Originally posted by 2 cents
reply to post by JustMike

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Well it appears I'm more pessimistic than the rest of you. Now the next question is when do you think the market will reach bottom?

I'm taking a wild stab at 12-18 months.

ATS should have a contest. For points. Say 5000 points to the winner.

1. what will be the market bottom

2. when will the market bottom occur

reply to post by son of PC

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That would be cool but it would take a while to know when the bottom is really in

reply to post by son of PC

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I see you mentioned points. Still trying to figure some things out here. I have not quite understood what the points mean. LOL I see they have been adding up for me but I am clueless as to what they are for. ~sipping on coffee royale~

Originally posted by BindareDundat
reply to post by son of PC

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I see you mentioned points. Still trying to figure some things out here. I have not quite understood what the points mean. LOL I see they have been adding up for me but I am clueless as to what they are for. ~sipping on coffee royale~

Points are prestige at the site. They make you look better. No cash value.

reply to post by Mainer

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Hmmm, that's interesting.

The UK hasn't started to buy equity just yet but are we about to see the governments enter the market over the weekend? Seeing that markets have crashed and matched the falls of 1929, I'd expect troubled banks to find government buyers at the door now.

reply to post by son of PC

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Oh ok. Thanks for answering!

Learn something new every day!

Originally posted by 2 cents
reply to post by alphabetaone

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5000 is about 65% drop from its high. We are already at 40%. What did the Nikkie do during their realestate bust?

The Japanese situation was more of a long, drawn out slide. Took place over a decade or so.

In late 1989, it peaked at just a hair under 39,000. By Sept 1990 it was down to 20,000, then 15,000 in 1992.. There's a lot of debate as to when the bottom for that particular crisis was hit - some people put it at the 13,000s hit in 1998, others take the "rock bottom" of 7,900 in 2003.

I hear guys talk about those days, when it was up over 30, and they get this glassy-eyed, distant look... there really was an absurd amount of money around then.

This market reaction was predictable as soon as President Bush said; "This sucker could go down." A similar meltdown occurred in 2000-2001 when Greenspan said equity markets were in a bubble that was going to burst. These actions by people at the top are signals to short a market.

The problem with shorting the market is that the seller has to cover eventually, or the losses he takes as gains disappear as the stock recovers. Right now the shorts have gotten rich so they are ready to buy back the stock they shorted at a discounted price. GM and Ford are at record lows. If I had the money, I would be a buyer, as there should be a significant bounce when the bears race to cover their massive short bets. They will then buy quality equities to hold for a long term. Buy into blue chip at these lower prices, and profit.

The Congress has just sent 900 billion into the markets, and there is an orchestrated global governmental response in progress as well. Stocks go up and down, and the trick is merely to buy low and sell high.

If concerned about loss exposure, or you don't have the money to play larger stocks, buy covered call options instead of the quality higher priced stocks. To get a quick definition of puts and calls, proceed to infoplease
These covered calls are extremely speculative, so anyone using them needs to use a broker or suscribe to a newsletter and gain an education first.

Sellers in this environment are taking a ridiculous hit. A lot of the selling has been generated by margin calls, so investors that were trading on borrowed money via "Margin Accounts" have been wiped out.
See Investopedia
Margin Calls have figured in as a major cause of the recent market meltdown. The selling was done by brokers to liquidate securities speculators made bad bets on using brokerage firm's money. That selling pressure is over. A similar pressure will ocur where uncovered puts and uncovered shorts are forced to liquidate and buy back securities during the coming bounce. The bounce will be far greater than it otherwise would have been. Buy baby buy!

Many prudent investors on the sidelines are looking at charts that will signal this as a buying opportunity. Buy good values to hold for the long term. Please remember that the Dollar remains down against the Euro (from five years ago) by approximately 30%. It has come back from 1.6 dollars to buy a Euro to 1.36 dollars to buy a Euro in the past 12 months. The US Dollar looks good in a "head and shoulder" chart.

The US Stock Market looks like a great buy here, and the dollar looks stable the in short term. Many of us have concerns about inflation, but this has become a global crisis. Any short term US Dollar hyperinflation shouldn't occur due to the global nature of the problem.

If the US government were smart, they would legalize marijuana and tax it, which could result in 50 to 100 billion a year in Federal Tax Revenue enhancement. That move would also have the benefit of calming down the taxpayers over the implications of the 900 billion-Dollar bailout
vis-a-vis financing the thing. It would also shore up the Dollar, and make it stronger vs. foreign currencies. Legalizing Marijuana would be a responsible way to rid us of huge sums of currency being exported to terrorists as well. That one move could easily cause a surge in equity markets. Let's all live in the solution, and realize that in the end we will weather these storms.

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