Originally posted by Unit541
The value is going up, yet the volume is going down. Common sense dictates that it cannot continue like this forever.

The price of stocks goes up as more stock is sold. Demand creates value. However, in the current market, demand is going down, but value is still being "created"?

I'm no financial whiz, but it just doesn't make sense to me. It's one of those "If it looks too good to be true..." situations.

This is going to hurt...

I also don't pretend to be a financial wiz, but I wonder when time tested principles of finance will kick in on this market. Seems to me that the whole thing is obviously rigged, but if you can ride the wave, go for it. as long as one knows what's going on, go for it.

I do believe the whole thing will come crashing down sooner or later because of too many negative factors, that even the best rigged market can't cope with. just seems logical to me, although lately, logic hasn't seem to be much of a factor in anything.

Here it is four days to go and the DOW is still above 10,000 and climbing. I wonder if this doom and gloom is a bit off target.

Let me just say... I think the markets and our economy are in deep deep trouble.... but not because of some historical trends or technical predictions...

Where we are now is a unique time in our history... serious talk about replacing the dollar as a financial reserve note grows louder everyday... even our staunchest supporter Japan now thinks it might be to late to save the dollar... they think we'll soon see a 50 yen per...

Now add to that the still growing housing crises... in the past people who wanted a new car would ofttimes turn to the equity they invested in their homes... that equity is gone in most places... even in those places where the housing market didn't take a big hit banks are hesitant to make loans because of the unpredictability factor... no liquid assets means retail sales stall...

Never before has so much individual wealth vanished all at once... don't believe me take another good look at your 401K No were in serious trouble here and wall street just cant keep rising the way it is... there's nothing there to support it.... as to OCT 25th?... maybe not...spring 2010 Yeah probably


[edit on 21-10-2009 by DaddyBare]

Originally posted by mrpotatohead

Originally posted by Unit541
The value is going up, yet the volume is going down. Common sense dictates that it cannot continue like this forever.

The price of stocks goes up as more stock is sold. Demand creates value. However, in the current market, demand is going down, but value is still being "created"?

I'm no financial whiz, but it just doesn't make sense to me. It's one of those "If it looks too good to be true..." situations.

This is going to hurt...

I also don't pretend to be a financial wiz, but I wonder when time tested principles of finance will kick in on this market. Seems to me that the whole thing is obviously rigged, but if you can ride the wave, go for it. as long as one knows what's going on, go for it.

I do believe the whole thing will come crashing down sooner or later because of too many negative factors, that even the best rigged market can't cope with. just seems logical to me, although lately, logic hasn't seem to be much of a factor in anything.

What you guys are referring about as to the volume is actually incorrect.

More ofthen than not, during a breakout, volume will be LOWER than HIGHER - this is because (my theory) most are scared while big time players knno when to get in and out.

[edit on 23-10-2009 by GreenBicMan]

[edit on 23-10-2009 by GreenBicMan]

Breakouts on low-trade typically means the big-money isn't in. Short & Sweet. Speaking of shorts...low volume breakouts are a magnet for 'em , which is why they usually fail a retest.

JMHO

Originally posted by GreenBicMan
Time after time you see things coming back to test the breakout, or most usually a S/R line, so you always short the first breakout

No absolute strategies GBM...and always shorting/fading initial breakouts is a risky one...though the odds would increase if the breakout was on low volume. Shorting the breakdown would be the more common/prudent trade imo.

Naturally there are exceptions..no absolutes..but it's no secret that LVBO's have a high rate of failure/inspire little confidence. The exception you cited needs to be viewed in context: Low volume breakout in a low volume market....following a high volume sell-off.

Historically , a sketchy set-up over the longer term.

The last word is yours for the taking GBM.

OBE1...out.

I would have thought that 25 Oct '09 was significant because
it is 1,151 days before 21 Dec 2012

21-12-2012 being the final curtain date

As a business owner, I will tell you the real world results of laying off employees. Yes, your bottom line will jump, at least initially, because labor is usually the single highest expense item. It takes about a quarter before revenues catch up.

After that initial leap, your bottom line will plummet. The reason is quite simple.

While payroll is an expense, the productivity of labor is an asset. Companies make money off the efforts of their employees. So while they pay Employee A $15 an hour to make 100 widgets, they earn $1,500 on those widgets in the marketplace. Layoffs are a desperate attempt to keep the company afloat.

Sometimes this works if it is a correction of an imbalance, like getting rid of non-productive labor, or resizing to fit the market. The rest of the time, it is usually a death knell for the organization. You can only contract so much before you become cannibalistic and start chewing off your own arms.

Guess what happens when you have a majority of businesses in a community contracting? Yes, you get higher unemployment, but you also have less tax revenues. Businesses pay the majority of taxes. The government is loathe to contract, so they usually just raise taxes, especially hidden ones, while reducing services.

Now, any business on the edge will be pushed to a point of no return. This is what will happen next year and it will likely result in a nationwide tax revolt starting with those who are unemployed or have had their homes foreclosed.

But hey, play the stock market and ignore these facts.

You can stare at your navel all day and talk philosophically about it, but the stock market has not been reflecting the real world for over a decade -- and herein lies the problem. It is not about the productivity of real businesses, but more like gambling in Vegas, playing the odds, creating new "investment vehicles" out of blue sky and then wagering on them.

Anyone promoting these ideas is simply part of the problem.