DOW Down Another 700 Points

DOW Down Another 700 Points

money.cnn.com

NEW YORK (CNNMoney.com) -- Stocks tumbled Wednesday afternoon as recession fears resurfaced following a weaker-than-expected retail sales report and dour comments on the economy from Ben Bernanke and another Federal Reserve official.

The credit market showed some signs of easing, as a key overnight bank lending rate fell. But the improvement was slowgoing and failed to reassure investors. Global markets were mostly lower.

(visit the link for the full news article)

Perfect, just perfect. So much for the 900 point gain. Where has the bailout gotten us? Anywhere? The argument that the government continues to make is that it is going to take time, but these constant ups and downs are certainly no reassurance of that.

For the same matter, everyone's expression when cornered on the topic of the bailout continues to be "come onnnnn", some good the bailout really did...

money.cnn.com
(visit the link for the full news article)

[repeat post]

Monday was a reflection of the Depression Syndrome.

We will see at least one more 'miniature' spike in the coming week or so.

I don't know squat about finance, but i think the market's 'true' value is closer to the 6-6.5K range. After that the curve will flatten and resume modest growth. (yup, I pulled that one out of my butt! - if everyone else can 'guess' so can I.

700 point drop?! It's as I thought;

www.abovetopsecret.com...

Sorry for the short post mods, most of what I have to say has been said in the other topic I linked to.

(originally intended to be posted in my other thread)


Ok, we will start out with one of my stock favorites, JPM.

JPM fell about 5% today. Its sitting at 38.49 at close today. I would not buy right now, but if you bought it at 36-38, I wouldn't sell either. I would hold onto this stock for the long term. Its one of the strongest banks in this credit crisis, and it will survive it. If JPM, for some unbelievable reason, were to go under, it would not matter what stock you had invested in because the market would crash.

Summary: Hold onto JPM. If it drops to 35 or less, it is a definate buy. I think it will fall short of its target, but it will still be a profitable stock to have.

Next, WFC. It is right with JPM as one of the strongest banks in the financial market. Even with its announced drop in profits, it still remains very strong, and only lost half a percent today. It is one of those safe banks to have stock in. If it falls under 30, it is a long term buy. It will come out strong, especially with the acquisition it engaged in later on down the road. Don't sell it if you bought it, unless you are feeling risky and think you can sell now and rebuy down the road. That takes a real good understanding of knowing when positive and negative speculation is going to take place, and how long it would last. I would recommend just holding onto it.

Summary: WFC is a good buy under 30 dollars. Another long term investing stock as far as the financials go. Its temporary drop in profit will not be an issue by mid to late 2009 and you will be glad you bought it when the market bottoms out soon.

Next, C (citigroup)- Let me put this in very simple terms. No. Tomorrow they will be a contributor to the further falling of stocks. I would bet they will be among the losers of tomorrows probable drop in stocks. They seem unable to turn a profit, and this 3rd quater announcement due tomorrow, probably won't be any different. I personally think C could fall anywhere from 12-18% with tomorrows 3rd quater earnings announcement.

Summary: Don't buy. I would sell it. I think tomorrow will be a negative day for C. If you really have faith in C long term stability, sell the stock tomorrow and rebuy it later on when you feel that it has bottomed out. Personally I would get away from it.

Next, MS. Sell it. If you bought it when I told you, and you didn't already sell it like I said, sell it. You are still turning about 100% profit. SELL IT. They are NOT something you want to own for the long term. It is just unnecessary to take risk after turning that kind of profit. MS is one of those stocks that got a temporary fix. Long term, this company is a big risk. BIG risk. Short term, knowing when the speculation would drive the stock up made it a solid investment, but long term it is a no.

Summary: Sell. Sell. Sell. That is all there is to it. It is one of those stock you bought recently, KNOWING that the bear ralley would give you your turn to engage in profit taking. Don't wait on others to do what you should.

Next, GS. Though not as urgent as MS, I would still sell it. They are more stable, but still a risk. For long term investing, you should be waiting on the sidelines for WFC and JPM to get to a bargin price. Don't hold onto GS when you are already ahead. Certainly don't buy it here. Same advice I gave from MS applies here. Sell in and get your piece of the pie before it disappears to somebody else.

Summary: Sell it. No reason to risk in a company like this. It is simply not a smart move.

Overall: Tomorrow is a day to sell these financial stocks, though like I said, you should have done that today. If you own C, get rid of it. If you own MS, get rid of that too. If you want to hold onto GS, fine, but I would get rid of that as well. JPM and WFC prove to be definately worth sticking with if you have it, and buying it when the price is right.

JPM and WFC will prove good in the long term. In the short term, get out of the market and watch for signs of the next bear ralley to take advantage of. Also look for a bottom so you know when to buy the stocks that will pull through this crisis.

DISCLAIMER: I am not responsible for any actions you take. You should consider the risks involved in buying stocks before you do it. This is simply my advice, and what I would do.

Yea, I think we will continue to see these fluctuations. I can't remember who said it, but back in the 30's someone compared the market to a shaggy dog, sometimes it needs a shakeup to get all the flees of. I think it was rockerfeller.

Regardless, I agree with him. There are alot of idiots in high paying positions that don't deserve to be there. This market is an example of this. Additionally, there are alot of stupid investors that are going to throw there money away. Until these people are out, you won't see companies return to normal.

Life sucks, but the stock market is nothing more the playing in vegas. If you know what your doing you can make money, if you don't then it comes down to luck.

I personally see the market continuing to drop till about 6500. I say that because I think the real value of companies is around 7000-7500. Real investors are going to stay out till then, IMO. (depending on your investment theories ofcourse daysellers, etc)

Just my 2 cents,

Camain

As I commented on the other closed thread:



The problem is, none of their Elitist-back-scratching bailouts, nor the media's biased coverage of "how great it is for the economy" are erasing REALITY.

That reality is that hundreds of thousands of people are increasingly LOSING THEIR JOBS, BEING FORECLOSED UPON AND HOMELESS, and the cost of EVERYTHING is outpacing those that still DO have job's incomes.

The spin-factors and corpo-croneyisms can not overcome the REALITY of the back-bone of this nation being broken continually.

burdman30ott6: on your question about ebay in my thread.

Beating expectations and posting moderate profits, though softening the blow of today, does not do enough to bolster their stock when the market takes this kind of hit.

Look at S(Sprint), t(AT&T), AAPL(apple), and GOOG(google). They all took big dives today as well. This stock fall was unavoidable. EBAY may have made profit, but they didn't give a big enough profit to avoid this warranted sell off. They were overvalued.


Manawydan: on your question about q1 2009 growth in my thread.

I expect 1st quater growth to be negative as well. This is going to be a legit recession, and you will see negative growth in the 1st quater of 2009. To what extent remains to be unseen because the credit crisis is not over.

reply to post by DimensionalDetective


Don't exaggerate the event unfolding. It is bad, but its not breaking the backbone of this country. A recession is necessary. It will get worse. It is also a time for those with a steel stomach to make alot of money, or alot more money than they have already made (if they were smart, they should have by now.)

This is bad, and it will definately hurt us now, and into next year, but it is not the end of america as we know it.

The only way that will happen is if somebody massively screws the bailout up. Possible? Sure. Likely? No.

Someting tells me George Soros is sabotaging the economy, only to get Obama elected.
What else could be the explanation?

minus 700+ is the proper direction...
perhaps a DOW 7,900 or even a 7,300 is a realiastic possibility
...whether that value is rational or just a panicky response, matters not...


What i'm really concerned about is the 'benchmark' CPI-W->
which calibrates the Social Security recipients yearly check ammounts...


all along, in less than eloquent words & thought steams...
I have been presenting a case that there is a 'major manipulation'
taking place to lessen the price of oil/energy foremost... & the lessening of
other elements which are components of the CPI-W which determines one's Entitlement Payment.

The Govt was & has been in the process of manipulating the 'markets' so they can save upwards of a Trillion Dollars...by not paying the 'real' increase of the Entitlement Programs such as Social Security disability


thats my case, let the forum & the investigative 'citizen reporters' follow up ... this is a No-Spin-Zone topic...

thank-you all

The VIX was flirting with 70 today, and I believe that it will raise another 3 points tomorrow at the very least. Im being conservative in that estimate. I could see it going up 6 points depending on how bad tomorrows 3rd quater announcements are.

Originally posted by grimreaper797
reply to post by DimensionalDetective

 

The only way that will happen is if somebody massively screws the bailout up. Possible? Sure. Likely? No.

It's good to be positive but this bailout is in the wrong hands, sorry to say that, but I have no faith in the bush administration. I think they have different plans than helping fix the economy.

reply to post by shoeshiner


Nah, the bailout is fine, though I don't necessarily agree with buy stock in companies. That is a bit extreme imo. The bush administration is doing what is in their best interest, as usual. It just so happens, it is in our best interest too.

It is slowly being revealed that no one knows what the consequences of this bailout will be in the future. It's called the "law of unintended consequences" and it is sure to rear it's ugly head when legislation of this magnitude is put together in such a slapdash fashion!

The bailout is full of loopholes that will most certainly be exploited by the fat rats!

Now that we have the 35 year old protege of Henry Paulson at Goldman Sachs in charge of the 700 billion dollar bailout with virtually NO oversight!

Doesn't give me a warm fuzzy!

From CBS:

Will U.S. Taxpayers Need A Bailout?

Another problem with the law is that it's possible for a bank to buy $100 billion of bad debt--perhaps in the form of subprime mortgages that are becoming quickly worthless--declare bankruptcy, and sell it to the Treasury Department for $200 billion.

Although the Treasury Department is supposed to look out for the best interests of taxpayers, a loophole permits those kinds of unjustified windfalls if the toxic mortgages were "acquired in a merger or acquisition" or purchased as part of a bankruptcy sale. Nowadays, at least, that's a pretty huge exception.

The banks are afraid of lending to each other. What would be ``funny`` and is the next step of this crisis: countries are now afraid of lending to each others... or all countries are afraid to lend to the US...

China already lost half of his toy makers this year alone. So crashing the US won't cost them much more than that they have and will lose because of this crisis. They should just dump the US from the world financial structure and start over.

Originally posted by grimreaper797
reply to post by DimensionalDetective

 

Don't exaggerate the event unfolding. It is bad, but its not breaking the backbone of this country.

Yeah well you need to look and see just how many people are being laid off. Go around your home town and ask every small business how they are doing. The back is broke and its going to get very bad soon. Nobody is spending money because they don't have it, I don't think Walmart will get through January of next year because of a bad Christmas season.

I hear it from people all over the country how bad things are (from business owners) and they sure will not get better because the government will not bail us out.

Small businesses have been hit hard for a year straight and most are at their breaking point NOW!!!! My business has been in place since 1976 and it has never been this bad. The banks may have money now but the bank accounts are going to drop fast very soon, Then what? I would like to see an honest account of unemployment because from what I see in Tampa and Orlando it must be staggering.

The MSM has hid the problem with the economy for a long time and I will bet money that the economy completely collapses or they go with a new one world system before it does. I know you are good with the market but I am telling you that you are playing with fire, Don't get burned.

My good friend is a financial adviser and he told me Saturday that he worked till 8:30 pm every day for the last two weeks and made no money on top of that.

reply to post by Sky watcher


The simple fact is that this is a speculative market, not a fundamental one. I don't need to have the best grasp on fundamentals because this isnt a fundamental market. I have a decent grasp. I can crunch the numbers. I learned what the P/E ratio is and what it means, Dividend and Yield, etc. etc., but that alone isn't what you invest on in a market like this. You have to know people. Im an avid poker player. I made money on figuring people out. I learned the fundamentals of the game, and then I played the people.

This market is the same way. Figure out how the people will act before they do and you don't need to know the fundamentals in a volatile market like this one. This is my kind of market. The reason most of these people don't know what to do or what is going to happen is because they don't know people. They know all the fundamentals, and how they SHOULD react in a normal market.

This isn't a normal market, its a panic market. As a result, this becomes my market, not the experts market. People are EXPECTING bad results today and tomorrow. Stocks will fall, even if the news is better than expected. It doesn't matter if citigroups numbers come out better than expected, their stock will probably fall anyway because people have negative expectations.

Experts can tell you how things would work in a normal market, but when people start to panic, you need to know how people act under pressure. When they start to get nervous, you need to know how people act. That is one thing I have experience in, how people react when alot of money hangs in the balance. What changes, and why. I just apply that to the market.

Tomorrow will be a negative day. I don't need the dow futures to tell me that. I know when to buy in a market like this because I know how people will speculate on certain news, and what they will do when it comes out.

As for unemployment and such. This is the begining of a recession, what were you expecting? I don't think it will go as far as a depression. Between companies raw numbers and the bailout package, there is nothing to indicate that will happen.

Today we broke the spirit of those foolish investors who bought stock late monday and tuesday. Today was the day for profit takers, like it should be.

HAHAHAHHA. The Nikkei is droping like a rock.

It's been open for 15 minutes and it's already down 5.5%... and dropping fast.

Update: 20 minutes and down 6.5%.++

Update: 26 minutes: Down 7.7%++

Update: 27 minutes: Down 7.9%+++

Update: 34 minutes: Down 8.4%+++

Update: 38 minutes: Down: 8.7% +++ more like 9.1%

Update: 40 minutes: Down: 9.1%+++ more like 9.5%

And it's even more than that because I just average the numbers...

Awesome.

[edit on 15-10-2008 by Vitchilo]

[edit on 15-10-2008 by Vitchilo]

Just to add some perspective....
I'll quote Glenn Beck yesterday
"8 of the 10 greatest market daily rallies occurred between
1930 and 1934".

Feel better?

Folks this collapse has been predicted by many for over 2 yrs.
Nothing will save it but complete transparent disclosure of the
books to build some resemblense of faith.....plus a pile of bankers
and congressmen in orange jumpsuits.
Niether will happen.