Will the markets have larger than a 10% correction? (with link)

[manlymatt83]

Hi all,

I've been watching the market steadily climb over the past month or two. The ISEE index is really high right now (over 250), when from what I understand it should be around 100.

Then there's this article:

Ten signs an October market crash is coming - BloggingStocks

What does everyone think here on the direction of the market in October? Will there be a correction?

 

[shadowninja]

I certainly can't predict which way it'll be going but I know something's not right. It's like a ****ing bubble. People have not learnt.

 

[poborsky]

Ben Bernanke says the recession is over and hes an expert.

 

[GladiatorX]

I too am searching forums for individuals who have the ability to predict what millions of people are going to do in the future...

 

[Black Swan]

Red October?

"Joseph Stiglitz, a prominent economist and Nobel Laureate from Columbia University in New York, argued last week that the U.S. banking sector is now in worse shape than before the collapse of major investment bank Lehman Brothers in September 2008, because banks seen as too big to fail before the crisis had grown even larger..."

Wall Street risks red October as rebound looks frothy | Reuters

 

[Black Swan]

and this is one of the reasons banks may get re-hit

WASHINGTON (Reuters) - The federal government and states are girding themselves for the next foreclosure crisis in the country's housing downturn: payment option adjustable rate mortgages that are beginning to reset.

"Payment option ARMs are about to explode," Iowa Attorney General Tom Miller said after a Thursday meeting with members of President Barack Obama's administration to discuss ways to combat mortgage scams.

"That's the next round of potential foreclosures in our country," he said.

Option-ARMs are now considered among the riskiest offered during the recent housing boom and have left many borrowers owing more than their homes are worth. These "underwater" mortgages have been a driving force behind rising defaults and mounting foreclosures.

In Arizona, 128,000 of those mortgages will reset over the the next year and many have started to adjust this month, the state's attorney general, Terry Goddard, told Reuters after the meeting.
Option mortgages to explode, officials warn | Reuters

 

[SAINT]

What does everyone think here on the direction of the market in October? Will there be a correction?

Have a look at this: Quantitative Easing Fuelled Stock Market Recovery :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website

The markets may correct slightly in October as they have been on a relentless climb over the last six months. I think the biggest worry is that the correction will be the start of something bigger over the next few months.

Bernanke said the recession is 'very likely' over. This is true in a technical sense- consecutive quarters of GDP growth, but there are too many underlying problems still out there. He also said the recovery would be bumpy road.

Bernanke/Brown etc have no choice but to paint a positive picture in order to give the consumer some confidence and stimulate spending.

 

[Black Swan]

Failed banks, 94 so far this year in the US

Think it's small potatoes? Only 42 went bust in 2008...projection is for 100 to be reached by Nov. Just look at how the number has accelerated in September 2008, a record 25 banks failed in the last five weeks, never mentioned on CNN anymore ...fooking 'ell...'tis not over 'till the fat lady can't buy any more donuts...:-0


FDIC: Failed Bank List

 

[poborsky]

recession is over but......

 

[pedro01]

Jobs are the key to a sustained recovery.

The INCREASE in unemployment is slowing down - but unemployment is still increasing. It's hardly good news.

Money got printed and it found it's way into the stock market. Obviously an increase in supply of dollars means that a dollar is worth less now that it was before. More supply of money means more of it flowing to the markets and creating demand. Reduction of the value of the dollar means it takes more of those dollars to buy a stock - esp. in companies that have a lot of international trade and are to an extent dollar-hedged.

None of this signifies a recovery in my book but then again, none of it says the markets have gotten ahead of itself either. It just makes it a bit hard to figure out what this $500 Google means compared to a $550 Googlre 2 years ago. the market could just as easily stay where it is for a while as go down.

Of course if the dollar appreciates or the FED reduces money supply or the Bond market looks like a great deal then the prices of stocks will go down as the money exits the stock market.

Personally, I'd rather be in a marginally expensive stock that has exposure to world markets that any US govt bonds but then I'm 'crumbling-empire' averse.

 

[poborsky]

The DJIA priced in gold;