Silicon Investor (SI) -- The First Internet Community

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 : Ask Vendit Off-Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: sandintoes who wrote (3525)	1/5/2005 1:02:50 AM
From: Walkingshadow	Read Replies (1) \| Respond to of 8752

None of that news surprises me. I posted yesterday to Reid that oil was completing a bearish head-and-shoulders, but had not broken the neckline yet. I have to admit this has bearish implications for oil, but that said, OPEC has made it clear that they will stabilize prices. Since they can control supply and adjust that as demand changes, they can move this market in spite of the bearish chart pattern. It remains to be seen, but I suspect this is exactly what they will do. The currency situation was expected also. The dollar has been in a long, steady downhill slide. Just as the Naz was overdue for a correction, so too the dollar has been overdue for a significant relief rally. Now the dollar is rallying into resistance, and looking overbought. So, I suspect this current rally will soon run out of steam. That said, you can see that the dollar is trying to find a bottom around the 80 level, and the strength of the downtrend is decreasing: futuresource.com With regards to your original question, individual stocks are valued by the market according to market perceptions of their individual situations. The indexes are nothing more than a summation of these, but tend to be less skewed because for inaccurate or unrealistic perceptions in one direction tend to be counterbalanced by inaccurate or unrealistic perceptions in the opposite direction. Market perceptions are subjective, not necessarily rational, and may at times (but not indefinitely) run totally counter to "external influences." Also, you have to consider that the market does not always view "outside influences" the same at any particular point in time. Instead, the market tends to focus on particular things, then that focus switches to something else that might have been relatively ignored for a while. So the market is not an unbiased processor of all input---rather, the market selectively processes incoming data in a way that is skewed by the particular biases at the time. By that, I mean sentiment. When the market sentiment is very bullish, bad news can and often is disregarded, at least for a while. And when market sentiment is bearish, it will tank even in the face of good news. That's because sentiment significantly influences the willingness of people to step up to the plate and plunk down risk capital. Regardless of the "outside influences", if there is not strong buying interest, the market cannot rally, and if there is fear, the market will sell off no matter what. In my view, sentiment has the most pronounced effects on the market as sentiment extremes are approached, so most of the time is disregarded, and rightfully so. But also, keep in mind that sentiment does not move in linear fashion, but tends to move cyclically, something like the oscillation of stochastics from overbought to oversold. This is not random movement. You see again and again more or less sinusoidal wave functions there, and you see much the same phenomena with sentiment, for much the same underlying reasons---fundamentally, human greed oscillating with fear, but with some blend of both in between the high and low points. .... all IMHO, T

To: sandintoes who wrote (3525)	1/5/2005 8:02:09 AM
From: Walkingshadow	Read Replies (1) \| Respond to of 8752

RE real estate, this just came through on the wires: Mortgage Applications Decline, Purchases Plummet The mortgage applications index declined 10.7% last week, moving to 605.7 from 677.4, according to the Mortgage Bankers Association. The 10.7% decline reflects the biggest decrease since May. Average 30-year rates fell to 5.67% from 5.72%. The purchases plummeted 13.7% to 417.3 from 483.8 last week (all time high of 501.6) and the refinancing index decreased 5.7% to 1701.3. The 13.7% decline in purchases reflects the biggest decrease since October 2003.