Value of Perfect Information Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value of Perfect Information

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

From: Q8	11/20/2008 9:22:34 PM
	of 262

fiendbear.com Party Like it is 1998 Another brutal day of selling left the Dow at a new five year low with its first close below 8,000 since that time. As hard as it is to believe November is shaping up to be just as bad as October. The Dow lost about 1,500 points in October but is currently down about 1,300 points right now in November. On September 26 the Dow traded above 11,000 making it a 3,000 point drop in less than two months. NYSE breadth was terrible with declining issues overwhelming advancing issues by a massive 15 to 1 ratio. This negative breadth matches the breadth seen during the Dow's other recent multi-hundred point plunges. The NYSE advance/decline line fell to its lowest level since June 2006. The number of new 52-week lows came in at 1,000 which is half of what was seen during the worst day in October. The VXO which had been settling down has now shot back up to 80 which is near its highest level since the 1987 Crash. The level of volatility has not diminished and in recent days appears to be headed for a climax. It appears as if the auto industry won't be getting a bailout and now Citibank is on the watch list as its stock crashed over 20% on Wednesday. There are just too many things stabbing at Wall Street these days with no relief in sight. Sure, the Fed can make a token rate cut when they meet next month but such moves have little impact these days. Folks are sick of bailouts and banks are not lending despite receiving unprecedented liquidity. With the job and credit markets strained consumer spending is falling off of a cliff and dragging the economy down with it. So far there are no consistent solutions coming from the government. It seems like they are just stumbling along trying to react to fast changing conditions day to day. Certainly a lot of the selling has to be due to a growing lack of confidence. What is amazing is that gas prices have literally come down more than 50% since the summer but those gains in pocket money are almost meaningless to the public. I'd like to point out for the buy and hold crowd that the Dow first closed above 8,000 back in 1998. Not much overall progress in 10 years. Yes, the Dow was above 14,000 briefly last year but it could be a long time before that level is seen again. More likely 7,000 is going to be a downside target which would mark a 50% bear market. That would be the worst Dow bear market since the Great Depression crash of 1929-1932. Actually it would be the Dow's second worst decline of all time. It doesn't necessarily mean there will be another depression but it is more than likely that the recession will be the worst that most people would have ever experienced.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next