We hit a false bottom Friday. The market will probably shoot back up to the 11,000 mark or so and by that time it will realize its mistake and "correct" itself again. People are trading purely on emotion at the moment.

This is not over. The market isn't the issue. Credit is the issue. Credit markets are still terrible and will be terrible until we stop throwing "magical invisible money" at the problem.

This is giving those that did not get out the first time a chance to get out of the market. It is a good thing in that sense.

There are a whole host of issues that we haven't even started to feel the effect of yet.

1. Credit seizing up
2. The throwing of trillions of dollars of "magical invisible money" at the problem. (you'll see the devaluation of the dollar and extreme inflation)
3. The effect of the low consumer confidence on businesses for the last month.
4. The large amount of lost jobs.

Over the next months these issues will begin to manifest themselves within the market. We are entering a severe recession right now. Recessions are long periods of economic downturn. This is a long term thing and one week of the DOW sky rocketing isn't going to change the underlying problems.

[edit on 14-10-2008 by Bugman82]

It all depends on the CP market. If commercial lending resumes, then this massive stick save will have been proven to work.

Until the banks start lending to each other and to businesses, all bets are off

Stimulus , bailout, stimulus ... can you guess what comes next?

Burnout and death...money meth kills




[edit on 14-10-2008 by Regenmacher]

Originally posted by LowLevelMason
To all of the ATS doom people: Your still fear mongering without reason.

UP ~930 points, biggest dow point gain in HISTORY and the biggest percentage performance gain is 76 years.

I find it so funny that when the markets have huge rallies, everyone who so desperately wants economic doom tell us that its all market manipulation. [...] Does this mean everything is over? No. But it means that using the stock market as a judge for the economy and stirring up panic and hysteria over stock market swings is foolish. [....] Its not the end of the world people, and its time those who desperately want it to be come back to reality. Your going to have to find something else to scare people about.
[edit on 13-10-2008 by LowLevelMason]

Hmm...Interesting point LowLevelMason...I've always seen the connection of the 'Neoliberal global economic system' & the 'stock market/financial fiasco' in the same way one would look at 'a flu disease' & 'its sneezing/coughing/fever symtomps'. So yes, using the stock market to judge THE END of the global Neoliberal economy is 'unwise'. It will live on, for now at least. Until the NEXT sneeze/cough/fever...OR, eventually, comatose & death.

As far as I'm concern, anyone who -like me- want to STOP the continuing replication of this excessive system of greed, ecological destruction & socio-political corruption, should treat this 'good news' regarding the DOW jones index as a good & humbling lesson about the system's durability. Also, to refine our critics of the system, so that more people can understand it without feeling choked up by 'fear mongering'...

From what I understand, a lot of SHORT SELLERS were cashing out. I still think it will fall to at least 7,000 points before it levels off and slowly recovers.

upcoming reports that WILL affect the markets:

OCT 15

September retail sales - A crucial reading on how the consumer has fared in a credit crisis that has hit their ability to borrow to finance big-ticket purchases. Analysts polled by Reuters forecast a 0.7 percent monthly drop compared with a 0.3 percent decline in August.

OCT 16

Jobless benefit claims - U.S. labor market conditions have chilled sharply and initial claims for unemployment benefits are seen at a lofty 475,000 for the week ended Oct. 11, off just slightly from 478,000 in the prior week.

September industrial production - Manufacturing has already been slammed by the slowdown and analysts expect more bad news from the factory floor with an 0.8 percent drop in industrial output building on the 1.1 percent fall suffered in August.

OCT 17

September housing starts - The housing market has been at the epicenter of the financial crisis and is not expected to turn the corner until late next year. Groundbreaking for new construction is expected to slip to an 880,000 unit annual pace from 895,000 in August.

OCT 24

September existing home sales - More bad news for housing as analysts forecast sales of previously owned homes to dip to a 4.88 million annual rate from 4.91 million.

OCT 27

September new home sales - In August, sales of new homes fell a sharp 11.5 percent to their lowest level since January 1991. New homes represent a smaller portion of the housing market, but because new buyers often have to go out and purchase furnishings, they have a bigger economic "multiplier effect." (Forecast not yet available)

OCT 29

September durable goods - Orders for expensive, long-lasting U.S.-made items will further reflect the extent the housing collapse has pinched manufacturers.

OCT 30

Weekly jobless claims

NOV 3

October factory survey - Forward-looking reading on factory activity from the Institute for Supply Management could be an ugly read.

October light vehicle sales - also expected to be hurt by the abrupt constriction in the availability of consumer credit after Lehman Brothers filed for bankruptcy.

If I were to hazard a guess, I'd say 5% who are guessing at terrible drops, and say this is just a lull are actually learned folks who know the situation. The rest are doomsayers and gloommongers who for whatever reason I still cannot fathom, WANT the system to fail. They'd love a huge crash, a massive depression, and I bet plenty would like that with a side order of World War, thank you very much. The amount of people that thrive on ill-news makes me quesy.

I am unsure if this is a lull or if it's actually digging out. I don't think it will drop like this again. I DO think there will be long term ramifications that are not going to make folks happy. We will feel this one for years. But I don't forsee a drop to 4000, and mass panic and loss of jobs and standing in soup lines. I think some people personally have a desire to stand in a soup and bread line. I don't know why...

[edit on 14-10-2008 by fleabit]

I am a contrarian by nature, so as far as I am concerned until the last bull out there finally throws in the towel and sells, there is more to come here.
This is called the final capitulation.

I want to see grown men weeping on the street and the occational one barfing.

I predict it will be approximately 3-4 days until the sh$t hits the fan again.

Ugh, the optimistic people on this thread really bother me. Not much knowledge to back up their claims...

But yeah watch out for tech stocks. the cancer has spread to them.

i am really bothered now that the 5 banks down the drag here in Austin are all narowed down to just about 2 banks! there jsut making a bank casserole right now but merging and selling parts to each other. Or a 7 layer dip..haha


But regardless if the market goes down or up, we do have a long time before we start really having a reason to say our economy is stable.

Someone gets shot a few times, its not healthy for them to jump out of the hospital bed and start running around too quickly. If we want our economy back we need a nice slow recovery after we have a sell off so we can assess the damage.

Originally posted by Bugman82
We hit a false bottom Friday. The market will probably shoot back up to the 11,000 mark or so and by that time it will realize its mistake and "correct" itself again. People are trading purely on emotion at the moment.

False bottom isn't the half of it! Yeah, it will continue to rise, but (and I'm guessing here) in a week or so - give or take a day or two - the cards come crashing down.

This is not over. The market isn't the issue. Credit is the issue. Credit markets are still terrible and will be terrible until we stop throwing "magical invisible money" at the problem.

AHHHHHH! Someone else who sees! The market can do what it wants, but without credit, gas stations can't get the fuel, buses, trains, planes, big rigs, and any other fuel consumers - unless they're paying cashola, they can't get fuel.

And if they can't get fuel...

Not only does WalMart have issues... ALL food distributers have issues. And if the food distribution network fails, the cities are in deep yogurt (as my dad used to say). Yogurt they can't eat.

And if the cities find themselves in inedible yogurt, there will be riots.

And if there are riots, there will be martial law a-comin'

And if martial law, can we expect that power Bush gave himself back in March to be left unused? Lessee... What was that power? Oh. Yeah

To suspend elections.

So, maybe it's 50/50 whether we will see elections. But I think, since all this was engineered, that it was engineered for the purpose to keep the guy who thinks it would be a whole lot easier if this was a dictatorship - in as dictator. And I'm giving it 98% chance we won't see an election.

Call me radical.

What, no comments? I think we can see where this is headed. Dr. Paul said what would happen before the bailout.

umm i have to say this...
lol, most of that historic gain was lost to the second largest point drop.
serioulsy, the market isn't going to shoot back up in a while and even if it makes a few or even a few hundred point gain in one day means nothing in the overall picture.
so sit back, and enjoy the show because it's out of our hands. no amount of money thrown by gov'ts to help is going to fix anything. it will rise, and then it will drop some more.