BillSimmons
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Will this downtrend likely continue or reverse?
What is the key level we are looking at? 12100?
What is the key level we are looking at? 12100?
Will this downtrend likely continue or reverse?
- Thread starter BillSimmons
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hoodoo man
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Which market? Which timeframe?
brewski1984
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It's no good asking other people what they think, what do you think?
BillSimmons
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The dow, and for June.
Personally I think it may go up tomorrow or early next week, then head down some more and after that I'm not sure.
Personally I think it may go up tomorrow or early next week, then head down some more and after that I'm not sure.
safvan
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Large traders in the market seem to have won the battle over the past 7 years of data. The commercials had little success. Right now both large traders and commercials are short however small speculators are highly bullish.
This means the a downward move is definitely expected how severe? Depends on how much large traders and commercials are willing to buy when small guys sell. It is nevertheless a bull market. After the seasonal effect is over the upward move should begin once again.
For now its bearish. For future its bullish in my opinion. The bull season in a bull market usually starts in september or october. Frankly it would be good to have a correction in the summer to make way for fresh bull buying in 3 months time.
This means the a downward move is definitely expected how severe? Depends on how much large traders and commercials are willing to buy when small guys sell. It is nevertheless a bull market. After the seasonal effect is over the upward move should begin once again.
For now its bearish. For future its bullish in my opinion. The bull season in a bull market usually starts in september or october. Frankly it would be good to have a correction in the summer to make way for fresh bull buying in 3 months time.
safvan
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Well it does matter to non traders and investors out of the markets. Bad markets cause economic problems. It does not help the majority.
Markets on technical levels is at an important junction right now. If the US gov and world govs take actions and print more debt then the markets can be supported for another bull run possibly crossing the levels originally set in 1997.
If it fails to do so then another solid correction or some kind of side ways annoying movement of the markets might be in play and this may take years to overcome. The free world would probably print more debt and keep the markets running ahead which for our sake as traders or investors is good because our cooking broths depend on it..
Markets on technical levels is at an important junction right now. If the US gov and world govs take actions and print more debt then the markets can be supported for another bull run possibly crossing the levels originally set in 1997.
If it fails to do so then another solid correction or some kind of side ways annoying movement of the markets might be in play and this may take years to overcome. The free world would probably print more debt and keep the markets running ahead which for our sake as traders or investors is good because our cooking broths depend on it..
new_trader
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IMO: The USA is in a great depression and all the weak economic data supports this, but the market has been propped up by the FED's cheap money or 'stimulus' which is now wearing off and also coming to an end. However, Osama Ben Bernanke will not let his Wall Street buddies down, nor will he allow the President to be embarrassed in front of his woman. This is the beauty of fiat money, it allows Politics to 'triumph' over economics...but only in the short run.
To answer the question, the downtrend in real terms will continue, but in nominal terms, the sky is the limit! In S&P500 terms, I would be mildly surprised if it broke below 1250, but by the year's end I think it will be closer to 1400. There is nothing I'm seeing (yet) which makes me think this market is being liquidated so I have been adding to my portfolio on these 'dips' but I am picking my stocks wisely and in a currency that is gaining strength against the $US and £UK.
If I have read the market correctly (and there is always a chance I haven't) I figure it will be higher by the end of the year. This doesn't mean it won't go down further first, but I think there will be more stimulus if it does, you can almost Bernank on it!
TheBramble
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While that's good advice, I'd suggest taking any view other than what's happening right now, (which applies across all TFs), is the only thing that really makes any sense.
If it continues going down: keep shorting it.
If it stops going down: don't short it.
TheBramble
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So, pretty much anything really. And that's about right. Did you foresee Wednesday's action?
Trying to predict markets is a little pointless, especially at the current time where markets are being impacted by a a slew of exceptional factors (such as unheard of levels of intervention) and respond (or fail to!) in fairly uncommon ways.
Each market and each period those markets operate within each require their own methods. While that's always been the case, right now, even greater skil is needed in interpreting and analysing what is happening.
Attempting to 'decide' what is likely to happen next isn't really an option. See. Do.
Raw meat is being consumed in large quantities.
hoodoo man
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Again with this canard? Do you not realise how rediculous it sounds? Every directional trader is attempting to predict markets. The successful ones predict the markets correctly in a reliable and consistent manner.
Aside from all the other animals with different edges - arbitrage, market making, vol trading, relative value, etc - there are many specs, small and large, who make directional bets on the future value of an instrument.
TheBramble
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I’m a directional trader but I don’t ‘try and predict’ the market. I trade the direction IT IS GOING (present tense) and when it isn’t anymore I get out. I don’t need to predict anything - I just look at what IS happening.
You state the successful ones correctly predict in a reliable and consistent manner. I’d suggest these are few and far between and those that take a gamble on direction get it right about as often or perhaps a little more often if they’re really good, as they don’t.
TheBramble
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For clarification for HooDoo as I know he takes his trading (and possibly himself too) very seriously.
For any given instrument in any given timeframe to be considered tradable on a directional basis (by whatever means YOU use to determine this), it isn’t a punt or a gamble to plan on taking a position in line with that existing move. That’s a better than evens opportunity.
When we talk about bods taken a view or ‘predicting’ future price development, I’m thinking those who with that same instrument in that same timeframe at that same point in time taking a view it’s either going to flatten or reverse. These ‘predictions’ fare 50/50 at best.
For any given instrument in any given timeframe to be considered tradable on a directional basis (by whatever means YOU use to determine this), it isn’t a punt or a gamble to plan on taking a position in line with that existing move. That’s a better than evens opportunity.
When we talk about bods taken a view or ‘predicting’ future price development, I’m thinking those who with that same instrument in that same timeframe at that same point in time taking a view it’s either going to flatten or reverse. These ‘predictions’ fare 50/50 at best.
China Diapers
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I'm with TheBramble on this one
safvan
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Just to add a bit more perspective. The 30 year bond yield index is at the same level it was before the big 2008 crash happened. It is very important for the S&P to break to the upside if the bull wave is to continue. Falling below the current already low bond yield levels is inviting another serious correction. Study the relationship of $tyx with $SPX.
This is one of the reasons why there is a talk of double dips or depressions going on now days. In order to control the down slide of yields fed needs to tighten the money supply and raise interest rates. In all I do not know what the future is but for now the bias is towards the downside.
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JahDave
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You have a very good interpretation of what is going on...............I differ with your opinion because banks are not lending and the public will not borrow right now..................This equates to deflation and a stronger dollar, and a weaker stock market.........I know that Obama wants to keep the markets up until he gets reelected, but I don't think he can...................
Hi there
Most of this downturn is probably overdone -- I'd expect a small rise certainly next week.
Incidentally you can protect yourself by considering "Boring" companies -- for example whatever the state of the economy people need Cleaning materials, energy, food,medecine etc..
An Economy as resilient as the U.S.A WILL recover (probably is in some sectors).
Unemployment figures aren't unfortunately a very good indicator as
1) They tend to lag behind the REAL ECONOMY
2) A lot of new businesses and technology are much LESS LABOUR INTENSIVE than they used to be -- for example anybody looking at the old pictures of 1000's of men working building the Titanic in the Harland and Wolfe shipyard might be surprised at looking at a modern shipyard - where a lot of the production is totally automated and there are very few actual workers
3) That bugbear of a lot of the technical service industries -- "Offshoring" -- for example a HUGE amount of both the U.S and U.K I.T industry has been totally decimated by offshoring jobs to India etc.
As an Investor unfortunately you have to be "Neutral" on these sort of things and concentrate on the job in hand -- increasing your Capital.
It actually is probably a GOOD time to look for bargains.
My advice would be to look for shares that you consider you WOULD like to hold and then SELL PUT OPTIONS on them
This way you could win THREE times over
1) You get the Premiums whatever happens to the shares
2) If the shares are PUT to you (the share falls to the PUT "Strike Price" ) you get to buy the share cheaper than had you just bought the share in the first place.
If the share starts recovering then SELL some CALLS on it -- you gain MORE PREMIUM and profit also when the share reaches the strike price on the call.
Trading in OPTIONS is often a good way to make money even when the market falls -- 85% of people who BUY options tend to lose so conversely the other side of the coin is that 85% of people who SELL the options must win.
Options can also be traded weekly (see CBOE site for "Weekly tradeable options") so you get your premiums EVERY WEEK and if the share really starts tanking you can get out of the position quickly .
Weekly options expiry every Friday but you can trade from the Thursday for the following week.
Incidentally unless the Strike price falls a LOT below your "PUT" price -- you often don't get "PUT" since Market psychology comes in here -- people don't often want to SELL their shares if they feel they are losing money -- they tend to go for a 100% LOSING strategy --"Ride out their losses". NEVER CHASE LOSSES -- just get out of position and concentrate on Next Trade.
So you can still Win -- you've made on the "PUT" and you haven't had to buy the shares !!!!!
( Trade on US market --UK / EU residents can get an account with OptionsXpress for trading US markets - dealing costs 9.95 USD for shares 14.95 USD for options)
Cheers
jimbo
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