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US and the Unbreakable 8000 Barrier

Discussion in 'Shares' started by Chris C, 16th Jan, 2009.

  1. Chris C

    Chris C Well-Known Member

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    It would appear that the Dow Jones has a lot of support around the 8000 mark, with another strong bounce off it last night.

    Does anyone see this level of support being broken in near future? And is anyone as worried, as I am, as to how far the rabbit hole goes if that level is broken again?

    Also what are people's beliefs in regards to market manipulation of the Dow by the FED through the proxies of the big investment banks of the US like Goldman Sachs, Morgan Stanley, etc?

    Also can someone clarify this issue for me - if the Dow Jones falls another 11% (which isn't seeming all that unlikely at the moment) to 7286.27 (the 2002 bear market low) does that mean that technically we are still in the 2002 bear market and that the last 6 years was just one of the biggest and longest bear market rallies in history?
     
  2. Tropo

    Tropo Well-Known Member

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    Last night DOW broke down my two levels but rebounded a bit (last level is still to be hit...).
    DOW may test again 7449 low and break it down (possibly :eek:).
    Level 8000 on DOW is another round number which represents more psychological barrier than TA level (IMHO).
    DOW may hit 2002/03 levels if it falls down another 1000 points from current level (my last two levels on DOW are rather scary, but it does not means that DOW will go that low).
    Last 6 years market was in an unreal bull run and now market is in a bear mode (you confuse bear with bull BUT both are a very dangerous animals :p).

    Markets are manipulated from time to time, and there is nothing you can do about it.
    It seems that you worry too much (are you actually investing or just only talking about?:confused:).
    Do not forget that money can be made in any market conditions. :D
     
  3. Chris C

    Chris C Well-Known Member

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    I actually meant "bear rally" in the sense that if we go back below the 2002 bear market lows, then did we really get (or in this case di the US get) out of the 2000 bear market?

    So like in 1929-1930 the Dow Jones recovered 60% after the 29 crash over the space of 6+ months, but I'd argue that there are few that in hindsight that would consider that recovery as a symbol of the bear market once again becoming a bull market given the declines through the next few years.

    So basically I'm wondering if the Dow does fall below 7286, which I'm personally expecting it to do, would this in turn mean that the 2000 - 2003 bear market never really ended, despite the nearly 100% growth since the lows of 2002, including reaching new all time highs?

    I mean for example, there was a 21.5% gain on the SP500 from November 20 to January 6, which had many touting the end of the bear market and the beginnling of a new bul market. Yet historians will no doubt look at that rally as completely inconsequential considering the bear market is more than likely to head much further south.

    I'm just enquiring because I hear the general definition of a bear market is when a market declines by 20% over a period of at least 2 months, and the duration of that bear market is considered to be from peak to trough to back to peak, which in the case of the Dow meant that the bear market ran from the start of 2000 through until late 2006.

    However I'm unaware of a period in which a following bear market low, proceeded to fall below the previous bear market lows, and given that the present bear market started barely a year after the conclusion of the last makes me wonder in a few decades time whether historians will look at this entire decade as just the one long bear market and that the gains made from 2003 to 2007 will just go down as the mother of all bear market rallies, especially when you factor in the depreciation of the USD over the 2003 - 2007 period.

    I'm for the most part on the sidelines, I have a few thousand in gold with the rest of my money just piling up in an offset account against an IP. At 23 I don't exactly have TONS of capital behind me, but I still love discussing and learning about the whole situation, because I don't always plan to have little capital at my disposal.

    But not "easy" money, you can only make "smart" money - which doesn't fit well into my whole generation Y attitude of wanting something for nothing and wanting it now!

    :rolleyes:

    That said times are definitely tough for making money in terms of capital appreciation IMHO. Markets are shaking and are likely to head further south in the wake of poor earnings results, housing prices are teetering in Oz and are collapsing around the world, bond markets have surged and are probably one of the better short term bets but you'd be a brave man to back them 12 - 24 months from now, commodities have been smashed. So from my perspective shorting the market looks like the short odds favourite to perform best over the next 6 months.

    Why were do you think some good money will be made over the next 6 - 12 months and onwards?
     
  4. Tropo

    Tropo Well-Known Member

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  5. Chris C

    Chris C Well-Known Member

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    LOL the dog eat dog markets!

    Unfortunately it'd probably take a good 6 - 12 months of learning, paper trading, and making losses before I could get to a point where I wasn't merely donating my money to bigger fish...

    :rolleyes:

    Plus I'm not looking to become a trader, I'm looking to invest.
     
  6. Tropo

    Tropo Well-Known Member

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    Don't you like a dogs ??????:eek::p

    Unfortunately it'd probably take a good 6 - 12 months of learning, paper trading, and making losses......, [/I

    Yeh....Keep dreaming boy....:p:rolleyes:
     
  7. I agree. The market does look oversold around this level
     
  8. Smartypants

    Smartypants Well-Known Member

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    With about half an hour to go before the US stock market closes, that 8000 mark looks like being tested today.

    Anyhting can happen in that half hour, but worth watching though.
     
  9. davo6253

    davo6253 Well-Known Member

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    Not so unbreakable? Closed at 7,949.
     
  10. Chris C

    Chris C Well-Known Member

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    VERY VERY scary week or two is coming up!

    Dow below 8000, UK's pound is looking like it might collapse, US banks are starting to hint that they need more bailout money, gold is surging despite the strengthing USD, the VIX is back above 55 and is the highest it's been in 6 weeks...

    I guess the US's PPT was at the inaugeration rather than making sure the DOW didn't fall below 8,000...

    :rolleyes:

    Very scary times...

    Except everyone is screaming "bye, bye, bye!" not "buy, buy, buy!"
     
  11. Smartypants

    Smartypants Well-Known Member

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    A new day and the Dow looks like getting back over that 8000 mark again.
     
  12. Chris C

    Chris C Well-Known Member

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    So the DOW is well and truly back under 8000 and looking likely close below the 2003 lows sometime in the not too distant future... this will be a monumental event representing nearly 12 years of no gains on the stock market!

    Which makes me want to raise the point once again, at least in terms of the US, can the last 4 years of growth from 2003 to 2007 be considered just a bear market rally considering there were essentially no real gains over that period if you factor the depreciation of the USD or the growth in value of Gold.

    I will be interested to see when all is said in done in a few years time, if history records the beginning of the DOW's collapse really began in 2000 and just continued through to 2010 - 2011, with a big bear market rally in the middle.
     
  13. powerjen

    powerjen Member

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    Personally I believe the Dow is going to fall to crazy levels like 1974.

    If you really want to know about socioeconomics and what will happen to the Dow according to past trends, try reading the EWI news (Elliot Wave) or 'Conquer the Crash' by Robert Prechter. I really enjoyed the part with all the market manias -- Dutch 1600s tulip mania, NASDAQ, Nikkei, etc

    "The stock market will mount an authentic rally. As for why this is no surprise, the short answer is quite simple: Everyone who wants to sell has done so. At least for the time being." -Robert Folsom of EWI.

    Of course some of the more intelligent people on here just sit on the sidelines and watch as the world goes crazy. I play the ASX sharemarket game myself as it gets out my inner gambler... I always do good when money is not on the line.

    For the technically minded:
    http://www.elliottwave.com/freeupda...-a-Bear-Market-Differ-from-a-Bull-Market.aspx
     
  14. dudek

    dudek Well-Known Member

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    Funny about that. I think it happens to most of us. One can argue that to become successful in stock trading you must abandon all emotions. Unfortunately when you reach to your pocket you are becoming emotionally involved. This brings me to the next question. How relevant is technical data and research if you can’t control your emotions?
     
  15. shasta

    shasta Member

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    Highly, if its underpinned by emotions. Assuming emotional drivers and responses dont change much overtime?
     
  16. Tropo

    Tropo Well-Known Member

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    "Personally I believe the Dow is going to fall to crazy levels like 1974."

    If you believe that DOW may ‘follow’ a projection all the way down and hit level from 1974 (approx. 850) we may go back to a 'dark ages'.
    I wonder what are you going to do about it? :eek:
     
  17. Chris C

    Chris C Well-Known Member

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    That would imply there are some VERY big falls to come after this bear market rally. I'm actually surprised at just how strong this bear market rally has been...

    Food, water, guns and ammo! I'd also pray if I lived in the US, Europe or the Middle East.

    :D
     
  18. Tropo

    Tropo Well-Known Member

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    “Food, water, guns and ammo...”

    ...and at least one book explaining how to survive ‘dark ages’ using Elliott Wave Principle. :p
     
  19. Chris C

    Chris C Well-Known Member

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    I definitely agree, books make great kindling for fire and throwing implements when you are trying to mug someone for a loaf of bread!

    :cool:

    Anyway, to bring this back to the markets, what's people's thoughts on this bear market rally? The Dow was down over 1% last night even after a massive quantitative easing by the FED...

    Gold has bounced back up nearly $70 in 24hours - so is this bear market running out of steam?
     
  20. Tropo

    Tropo Well-Known Member

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    "....so is this bear market running out of steam?"

    Hmmm...Do you know what a hiccup is? eek: