The "up-to-the-minute Market Data" thread

reply to post by HimWhoHathAnEar


Oh boy.

I could go into why you are incorrect, but then I just get replies like these that don't really go anywhere just oddball personal opinion. I don't have a problem with that but that kind of hippy talk is getting old.

reply to post by fromunclexcommunicate


The inflation down the road could be true.

Im looking at it like this.

If inflation is (-) right now, the inflation down the line averages us out over time.

Just as when if the market has done 10% gain every 20 years approx, if you have 10 years of negatie growth, the next 10 years will be the average of 20 years of 10% growth historically.

I hope that makes sense.

reply to post by GreenBicMan

I think if it mattered and people were worried about it there would be a reflection of that in the market..

I dont see it that way right now

I believe that the general reason for the market expanding at the rate it has is quite simply Government Funds. The amount of money pumped into the banks is staggering.. and seeing as new original loans have no increased much, we can only assume the money was being used to expand equity or else cover balance sheets. In all likelihood a major portion of the funds found their way into the markets. Seeing as to get inflation in any particular part of the economy you must first inundate it with liquid cash, is serves us well to assume the Market is suffering Hyper Inflation. If those trillions were pumped into the Real Economy then inflation across the economy would have been enormous, no? This is why the market has so drastically increased. IMO of course.

Eventually the money will leach into the Real Economy.. my bet is eventually, once the Recession either eases drastically or comes to some finality the FED will move to take as much out as they safely can. To allow all the money to multiply then hit the Economy would be massive inflation .. but if the FED takes the funds away to soon, we could see Deflation across the entire Economic spectrum. That's one of the weird things about economics.. you can inundate certain sectors with huge sums of cash and it will only effect them and those directly associated. But if you take funds from any portion of the economy, the whole system can come tumbling down.

reply to post by Rockpuck


I agree with you pretty much that the Fed is basically pumping the equity markets with money via banks and they probably hope that these higher equity and commodity prices and lower dollar and lower bond yields will thus create a recovery and a "leakage" of money, wealth and jobs into the broader economy. I mean, they could have had the banks to just loan out all this money but then inflation in the broader economy would have hurt the economy at this time more than not. Also if their experiment goes down hill, they can always take the money out of the markets (a crash) which is much more easy than having to take liquidity out of the overall economy. This is probably why the Fed is supposedly "paying" the banks not to loan. Alan Greenspan believes that equity prices are very important to a recovery, we'll have to see if that is true or if the markets go off into never never land with all the liquidity sloshing around while the overall economy doesn't recover. It is already happening.

reply to post by Rockpuck


I just think it is this as far as the market, and it's my most simpliest of explanations

___________________________________________________________


1) At DOW 6500 we were priced for the whole banking sector in the red.

2) At that point if all banks failed that would put us on the market (street wise) around 5000.

3) At that point that was basically the destruction of the United States.

4) Previously, DOW 15,000 (approx) was just piling it on.

5) We know 6500 is much too low and we know short term at least that DOW 15,000 is too high

6) (15,000+6500)/2 = 10,750

7) Number 6 is an oversimplified example of Price Equilibrium Theory (Method) and it is natural in the market for things to happen on both sides.

____________________________________________________________

Now this is what I believe is going to happen

Like 95% of time in history when we see gaps like this (current recession or even intraday moves that mimic) we always see exuberance going much higher the other way. Usually it even jumps higher than the previous top (at 15,000)

So just based on price action and nothing else (focusing on a daily chart) I would have to assume we break a new DOW record somewhere near in the future. In my mind I could see this happening as early as end of 2010 - 2015

In my previous post I outlined what a market does historically every 20 years, and coincidentally our past 10 years in the market was a negative return in fact.

Either way, everyone's opinion is based on assumption and whatever etc.. but I really really really really feel that these patterns (price action) all emerge over and over throughout not only something like what you are seeing on a DAILY scale, but 50 tick, 1 min, 5, min, 15 min etc. down the line time periods.

I guess maybe I am saying everything is a fractal of itself over and over and it is up to you to recognize what the pattern or cycle is. (hard to explain in typing)

reply to post by GreenBicMan


I completely agree with 1-7 .. many people still view the DOW or S&P as over inflated, though we must keep in mind that to go from 14,500ish to 6500ish is a MASSIVE correction .. My only concern is that given price to earnings ratio on the S&P (and other index's) that perhaps the momentum driving the growth in the markets is too artificial for the markets own good. It's one thing to take antibiotics to treat an illness, it's another to use steroids.

I still view long-term, and until true growth hits the real economy, the expansion of the markets cannot hold.. unless the dollar is deteriorating and the markets are propped by inflation. With the Government intervening at such historic levels, the true nature of all things is lost in a cloud of corruption and fear.. The Government has intervened in laissez faire economics... and it should be pointed out that anything, and I mean anything the Government tampers with, manipulates, touches or hell, even looks at....... dies.

reply to post by GreenBicMan


With all due respect, stock market booms do not last if the underlying economy is either stagnant for a very long time or has more problems down the road. You are basing the technical side of the stock market in the 1970's, when the economic landscape looks more like Japan with their stagnation and thus many rallies and subsequent down falls.

And taxes WILL be raised, which impedes full jumpstart recovery even more. You are basing a stock market where the government can pick up the slack and just borrow when Obama has made it clear that the deficits will be reduced one way or another (either cutting spending or raising revenue via taxes). We aren't going back to 2006 for a very long time, and if the stock market rises to that level, you know not to get in front of that freight train when it crashes and burns again.

I know fundamentals is silly nonsense to you but it really does matter. And it isn't just because I have a job beyond this stuff, it is because I have to LIVE in the real world and the financial markets eventually reflect the real world (not on the short-medium term though).

EDIT: By the way around 10500 DOW seems like a good equilibrium to me.

[edit on 2-8-2009 by RetinoidReceptor]

reply to post by RetinoidReceptor


After the 2001 recession the equity markets paved the way to "recovery" .. however the last time the average American was this poor overall ... was never. The negative savings rate and personal income growth were all time historic lows.. by far the largest source of wealth growth came from real estate, where most families keep the vast majority of their actual wealth. This time with no available credit, I don't think their plan is going to work. And we don't have any historic references to this situation we find ourselves in .. as it's never occurred before. We are in uncharted waters, with the economy and with the actions of the Fed... generally meaning the Fed must be taking a gamble.

Government is not Ineffable.

Originally posted by Rockpuck

After the 2001 recession the equity markets paved the way to "recovery" .. however the last time the average American was this poor overall ... was never. The negative savings rate and personal income growth were all time historic lows.. by far the largest source of wealth growth came from real estate, where most families keep the vast majority of their actual wealth. This time with no available credit, I don't think their plan is going to work. And we don't have any historic references to this situation we find ourselves in .. as it's never occurred before. We are in uncharted waters, with the economy and with the actions of the Fed... generally meaning the Fed must be taking a gamble.

Government is not Ineffable.

I think the best we can hope for is a stagnation for years unless there is some new technology or product or sector that jump starts things. I agree, the Fed's voodoo will probably not work here, we need something substantial, tangible and productive.

reply to post by Rockpuck


Right, well here is something else to think about.

I have heard there is more money in MMarket still than their needs to be.

Infact, I have heard MMarket accts. were w/drawn very much so the past month.. cant remember where..

Anwyays, the point I am getting to is, people are calculating future growth and no one wants to get left behind. Now in an environment like that there will be times where it doesn't make sense if you think about it like in terms of PE, EPS etc. because that really doesn't matter when you are dealing in "future terms".

Here is a chart of SP 500 valuations historically

www.multpl.com...


When you look at it here it looks like we are still at the high end of valuations.

Now as the economy picks up this should drop (earnings rise) and it *should* drop at a faster rate because the price has been factored in previously and will move lets say .25 higher while the earnings may move 100% + higher (or something like that)

reply to post by GreenBicMan


Even if you take the optimistic analyst expected earnings in 2010 and divide the S&P by those it has a P/E around 30-35, which isn't "cheap" either. Right now it is like around 60. But like you said, the market is a future projection, but even that future projection at this level isn't very cheap. At 1050 it will be like 40-45 P/E.

EDIT: Sorry I mean 1050 not 10500 for S&P

[edit on 2-8-2009 by RetinoidReceptor]

Originally posted by GreenBicMan
Now as the economy picks up this should drop (earnings rise) and it *should* drop at a faster rate because the price has been factored in previously and will move lets say .25 higher while the earnings may move 100% + higher (or something like that)

Ahhh, but therein lies the rub...What if the general economy doesn't pick up for years?? Right now, most micro and macro indicators are showing us that we still have a way to go...we're still falling....Wishful thinking ain't gonna work here, and all we're looking at down the road is another Fed and Treasury stimulus injection...Yes, morphine kills the pain at first, but eventually it will kill the patient as well..

reply to post by RetinoidReceptor


Thats fine if you think that way, but in my view I see the markets telling you what will happen and indicators being purely coincidental or lagging.

We were/are in trouble in a lot of front, I don't deny that. I don't deny that potentially we may still be in a lot of trouble, and I don't deny that we have most likely been lied to the whole way (about some things). I don't even nec. disagree with anything you are saying... all I am saying (lol) is that

1 ) Everything you say is prob. true, but these problems (or something like energy crisis in the 70's) always accompany a market movement like this.

2 ) The times we have seen these moves we have also seen tremendous growth following give or take x amt of years


Not one time have we ever been beaten up and never came back. We always charge for new highs and that is the "consumer" and bullish attitude of the United States markets. While we know the average person is hurt, my family was hurt very much so in the tech bust, but somehow came from that also..

But I am just a super huge believer of history repeating itself in the markets and so far it is unfolding without a very large margin of error on both sides.

reply to post by RolandBrichter


If we are showing positive GDP by 3rd quarter would you say the same?

If that is the case, well then the slope is moving back up. I like to use the clock analogy as well (at that point somewhere around 8:00)

If you can refute the 10% every 20 years as well I am all ears, but that of course is 100% true. Just dealing with that statistic alone should make one very optimistic about the future of not only economy but USA.

reply to post by RetinoidReceptor


on my chart it shows the PE of the SP500 is 17.5 adjusted for inflation over the past 10 years

Originally posted by GreenBicMan

But I am just a super huge believer of history repeating itself in the markets and so far it is unfolding without a very large margin of error on both sides.

Man, I love your enthusiasm! You are right, alot of what sets the U.S. apart is our "never say die" attitude, and I'm all for it...

Yes, history IS repeating itself, we are in the early 1930's, we dodged the initial bullet, but we can't see the Neutron bomb falling over our heads...

reply to post by GreenBicMan


Generally speaking you're right.. we have never "fallen" and not rise again to new heights.. you are suggesting that once things stabilize we will see a period of extraordinary economic expansion, like we typically see.

There are a lot of variables that are different now than any other recession or depression.

The biggest being we rely entirely to much on internal circulation of wealth .. and we have never had a smaller manufacturing base.

We have an economy that does not produce wealth, it only produces numbers.. it literally is nothing more than a ponzie scheme.. I will contend that unless either a new industry is created in the US, or Manufacturing returns.. we cannot and will not see another period of economic expansion .. it will literally be impossible. Economically speaking, I find it amazing we have even lasted this long..

Actually.. once the Government stops spending, we should see a massive decline in the economy in general .. but if the Government continues spending, eventually it goes bankrupt either way..

That's not to say this is the end of all things.. it means this is an end of an era, which historically is not improbable.. our Economic situation is tied very, very closely to our Social and Political situation .. there is malcontent and fear embedded into the system, and fact of the matter is, "change" will be coming one way or another. Whether that good or bad, I cannot say, nor can I say whether or not the economy as a whole will survive.. we American's are not immune to the natural course of Human nature. The DOW could hit 20,000 and we could all still live in abject poverty.

I hope you see where a lot of us are coming from, we incorporate politics, social issue, economic theory and history all together to come up with the trends we see. You are very good at the schematics of the markets, when you say the markets will move up, I don't doubt you. I am less concerned about the technicalities at the moment, in relation to the situation as a whole.

reply to post by GreenBicMan

If we are showing positive GDP by 3rd quarter would you say the same?

I would say subtract Government Spending.. because Government spending is not wealth generating, it's debt generating.. thus should not count towards GDP.

reply to post by RolandBrichter


Knock on wood, we have it this good already.

And yes, hopefully we never get "paid-back".

Originally posted by Rockpuck
That's not to say this is the end of all things.. it means this is an end of an era, which historically is not improbable.. our Economic situation is tied very, very closely to our Social and Political situation .. there is malcontent and fear embedded into the system, and fact of the matter is, "change" will be coming one way or another. Whether that good or bad, I cannot say, nor can I say whether or not the economy as a whole will survive.. we American's are not immune to the natural course of Human nature. The DOW could hit 20,000 and we could all still live in abject poverty.

I hope you see where a lot of us are coming from, we incorporate politics, social issue, economic theory and history all together to come up with the trends we see. You are very good at the schematics of the markets, when you say the markets will move up, I don't doubt you. I am less concerned about the technicalities at the moment, in relation to the situation as a whole.

Well written...my sentiments exactly...

We'll survive, but in what form is anyone's guess..