Thanks for the thoughtful post. People are having a really hard time believing that "the game is not on again", and still trading as if it were in its heyday.
I have traded almost every instrument and bubble around: penny pig dogs, blue chips, gold stocks, bank stocks, Internet stocks, gold futures, bond futures, S&P/NASDAQ futures, stock options, OEX options, options on futures, warrants, rights, you name it.
Without exception, so long as the instrument is liquid and the game is on, price and volume are the only two pieces of information that are the true fundamentals in the market. This is why I am a technical trader. Anyone and everyone who knows anything about anything is taking action in the market. Price and volume reflects it all. There can be no dispute.
The market, to me, is a living, breathing organism, mainly because the participants are human. At times it will be overdone. At times it will be sick. Sometimes, it is hung over for a long, long time, after a big time binge. I keep thinking that people must recognize this somehow, but perhaps not.
This $19 billion thing with NT a true watershed event. I saw an analyst on TV say that it wipes out all of the profits made going back to 1983, the year after this secular bull market began. Ironic, huh?
This afternoon, I was thinking about what impact this will have across the nation. Not only will/have tens of thousands of people lose their jobs, the suppliers of NT will be hit. Also, presumably NT will be able to carry these losses forward in years to come on their tax return, and that means the government, which was counting on budget surpluses to go on for years to come, might suddenly find capital gains taxes dry up, along with corporate income taxes...hmm, that would be nasty.
They'll have to print money, won't they? And that, is a big can of worms to open up...
Teresa |
