Dow Crash Coming To Your 401K (2007 to 2022)

[Neurotoxin]

gbers.......


goldman sachs reports today......expect the numbers to be fixed and positive. i expect a rally off this today. 





NT

Lehman, Goldman Profits Fall, but Beat Estimates   


March 18, 2008,
Two of Wall Street’s top investment banks reported earnings well below the heights of last year, but still ahead of analysts’ expectations  at a time when investors are still on edge following the collapse of Bear Stearns.




NT

[G o a t b o y]

Okay, market sage of getbig, what say you for tomorrow?  Does the rally continue, or will we see a pullback?  I'd guess the latter, as there is nothing that really justifies the extent of today's level of optimism.

[Neurotoxin]

Okay, market sage of getbig, what say you for tomorrow?  Does the rally continue, or will we see a pullback?  I'd guess the latter, as there is nothing that really justifies the extent of today's level of optimism.

IMHO, until overall market fundamentals change, selling into rallies would be the prudent strategy. 







NT

[Neurotoxin]

here was my quote on metals:


"if you've been in metals the last yr or so, now would be the time to take some profits."



jumping in at the all time highs always carries extra risk........not unlike the masses who jumped into the Dow at 14,000, while i was warning of a Dow crash.

buying any sector AT HISTORIC HIGHS is very un-warren buffett like.

keep in mind, the most successful long term traders on W.S. buy when the public is panicked, and sell when the public is euphoric.   





NT

March 19 (Bloomberg) -- Gold plunged the most since June 2006, leading a decline in commodity prices on speculation that the Federal Reserve will ease the pace of interest-rate cuts, boosting the appeal of stocks and bonds.

The UBS Bloomberg Constant Maturity Commodity Index fell 51.7554, or 3.5 percent, to 1,437.64 at 11:42 a.m. in New York, led by declines in silver, gold.



NT

[stormshadow]

March 19 (Bloomberg) -- Gold plunged the most since June 2006, leading a decline in commodity prices on speculation that the Federal Reserve will ease the pace of interest-rate cuts, boosting the appeal of stocks and bonds.

The UBS Bloomberg Constant Maturity Commodity Index fell 51.7554, or 3.5 percent, to 1,437.64 at 11:42 a.m. in New York, led by declines in silver, gold.



NT

what do you make of this drop in gold?

manipulation? or a sell off for profit taking?

[Neurotoxin]

a yr ago PAAS (silver) traded at 13.00, it now trades at 42.00


did i buy silver last yr ? yes. would i enter into a new position now ? probably not. if a did, i'd have a very tight stop loss in.






NT

like i said.....i would not be buying silver or gold at the top. 


jumping in at the all time highs ? this is where the average investor typically gets slaughtered.




NT

[Neurotoxin]

IMHO, until overall market fundamentals change, selling into rallies would be the prudent strategy. 




NT

Wall Street gives up nearly 75% of the previous session's rally as investors retreat   
     
March 19, 2008

NEW YORK (CNNMoney.com) -- Wall Street retreated Wednesday, with investors giving back a big chunk of the gains made in the previous session, with losses in financials and commodity stocks leading the way.


The Dow Jones industrial average (INDU) lost nearly 300 points or 2.4%, according to early tallies. The broader Standard & Poor's 500 (SPX) index lost 2.4%. The Nasdaq composite (COMP) lost 2.6%.




NT

[War-Horse]

Wall Street gives up nearly 75% of the previous session's rally as investors retreat   
     
March 19, 2008

NEW YORK (CNNMoney.com) -- Wall Street retreated Wednesday, with investors giving back a big chunk of the gains made in the previous session, with losses in financials and commodity stocks leading the way.


The Dow Jones industrial average (INDU) lost nearly 300 points or 2.4%, according to early tallies. The broader Standard & Poor's 500 (SPX) index lost 2.4%. The Nasdaq composite (COMP) lost 2.6%.




NT

Hahahaha   The PPTeam is gonna be pissed....    If we follow europes market for the day, then its gonna be dismal tommorrow......

[War-Horse]

with that avatar, War-Guns would be an appropriate name !   

PPT is currently working overtime....but not having much luck, other an occasional short cover rally with no follow through. (similar to yesterday and today)

BTW, with the fed finally sounding concerned about inflation, expect the overbought, high flying metals to get pounded some more.



NT

LOL.    If commodities start to drop a little, will stocks rise a little???   

[Neurotoxin]

LOL.    If commodities start to drop a little, will stocks rise a little???   

rotation into certain beaten down sectors is slowly beginning. i'll keep you updated.



NT

[War-Horse]

rotation into certain beaten down sectors is slowly beginning. i'll keep you updated.



NT

Alright ill stay out.  Im hoping the dow hits bottom just so the world can see bush destoyed america.

[Neurotoxin]

Alright ill stay out.  Im hoping the dow hits bottom just so the world can see bush destoyed america.

i fully expect the Dow to head lower moving forward.


NT

[Straw Man]

Alright ill stay out.  Im hoping the dow hits bottom just so the world can see bush destoyed america.

I'd rather just see Bush, Cheney and the rest of the gang in jail.

A market crash will only hurt a bunch of innocent people and won't mean shit to Bush personally

[stormshadow]

Alright ill stay out.  Im hoping the dow hits bottom just so the world can see bush destoyed america.

Dude, everyone has a part to play in it.

Mainly it is America's fault for being so stupid.  We are lazy, and care 100 times more about entertainment than education (thinking).

Blaming problems that have climaxed off of many many years of stupidity and consumption on one administration is just as dumb.

When is the last time the average American read a book on economics, the Constitution, financials of a business, etc.

We delegate everything in our lives to another person.  Even though I hate Bush and the administration, I take responsibility for not having an active role to try and educate those around me to start asking questions and ALWAYS question those in power.

[240 is Back]

Alright ill stay out.  Im hoping the dow hits bottom just so the world can see bush destoyed america.

dude, never wish that.  

i dont care what the world thinks, but I do care about our american way of life.  I seriously hope we can fix things and save the economy.  I'd rather keep our standard of living than "be right".  Besides, the brainwashed sheep will blame the libs for an economy crash, you know this, and the rest of the world already knows the score.

[Bindare_Dundat]

When is the last time the average American read a book on economics, the Constitution, financials of a business, etc.

We delegate everything in our lives to another person.  Even though I hate Bush and the administration, I take responsibility for not having an active role to try and educate those around me to start asking questions and ALWAYS question those in power.

Amen to that.

[G o a t b o y]

This week is an interesting case study in something I've noticed in the short time I've been trading as a hobby:  the market almost always overreacts to news and events, then partially retraces later in the session or the next day.

There were two significant events this week:  the Sunday announcement of JPM's takeover of Bear for $2/share (which had been trading at $80 two weeks earlier), and GS and LEH announcing earnings before Tuesday's session and beating the estimates.

So, Sunday night you just know the market's gonna get slaughtered on Monday.  But if the market were efficient, wouldn't you think the adjustments would either be already priced into the market's much lower opening, or at the very least settle out in short order given everyone had this news prior to opening?  Nope, as per usual people panic, overreact, and you get a nice steep decline all frickin' day long  (not that I'm bitching, I made a killing on shorts Monday).

Now, what seems to happen a lot of the time is the next day the stocks in question regain some of their losses, as people have a chance to take a deep breath and realize things might have been beaten down too far and go shopping for bargains.  However, this Tuesday you had a second piece of news to react to... GS and LEH beat earnings (never mind that they're down 50% from last year  ).  Does the earnings news justify a major rally?  Of course not.  The fundamental situation hasn't changed, the credit crisis is still there, and Lehman could easily find itself the next BSC.  But, as usual the market overreacts, and the effect is magnified by the retracement of Monday's decline.  Result:  one of the best days the market has seen in a while.

So now it's Wednesday.  What happens?  People begin to realize that the size of yesterday's rally was unjustified given the fundamentals, and where do prices go? You guessed it, South.

Where does the market go from here?  Who the hell knows, but if every day were as predictable as the last three we'd all be billionaires.  I'm just parking my cash waiting for the next piece of news that the market can overreact to so I can ring the cash register again.

[stormshadow]

This week is an interesting case study in something I've noticed in the short time I've been trading as a hobby:  the market almost always overreacts to news and events, then partially retraces later in the session or the next day.

There were two significant events this week:  the Sunday announcement of JPM's takeover of Bear for $2/share (which had been trading at $80 two weeks earlier), and GS and LEH announcing earnings before Tuesday's session and beating the estimates.

So, Sunday night you just know the market's gonna get slaughtered on Monday.  But if the market were efficient, wouldn't you think the adjustments would either be already priced into the market's much lower opening, or at the very least settle out in short order given everyone had this news prior to opening?  Nope, as per usual people panic, overreact, and you get a nice steep decline all frickin' day long  (not that I'm bitching, I made a killing on shorts Monday).

Now, what seems to happen a lot of the time is the next day the stocks in question regain some of their losses, as people have a chance to take a deep breath and realize things might have been beaten down too far and go shopping for bargains.  However, this Tuesday you had a second piece of news to react to... GS and LEH beat earnings (never mind that they're down 50% from last year  ).  Does the earnings news justify a major rally?  Of course not.  The fundamental situation hasn't changed, the credit crisis is still there, and Lehman could easily find itself the next BSC.  But, as usual the market overreacts, and the effect is magnified by the retracement of Monday's decline.  Result:  one of the best days the market has seen in a while.

So now it's Wednesday.  What happens?  People begin to realize that the size of yesterday's rally was unjustified given the fundamentals, and where do prices go? You guessed it, South.

Where does the market go from here?  Who the hell knows, but if every day were as predictable as the last three we'd all be billionaires.  I'm just parking my cash waiting for the next piece of news that the market can overreact to so I can ring the cash register again.

I think you can do a lot financially and those that are very successful have realized two things about most Americans.

1. They are stupid
2. They are predictable

[War-Horse]

Dude, everyone has a part to play in it.

Mainly it is America's fault for being so stupid.  We are lazy, and care 100 times more about entertainment than education (thinking).

Blaming problems that have climaxed off of many many years of stupidity and consumption on one administration is just as dumb.

When is the last time the average American read a book on economics, the Constitution, financials of a business, etc.

We delegate everything in our lives to another person.  Even though I hate Bush and the administration, I take responsibility for not having an active role to try and educate those around me to start asking questions and ALWAYS question those in power.

I feel that way too.   I just didnt want to type it all over again.   Thanks..

[War-Horse]

dude, never wish that.  

i dont care what the world thinks, but I do care about our american way of life.  I seriously hope we can fix things and save the economy.  I'd rather keep our standard of living than "be right".  Besides, the brainwashed sheep will blame the libs for an economy crash, you know this, and the rest of the world already knows the score.

Well, I was just cutting to the chase.  Theres been so many lies and deceit that I hope they burn in hell.  Did you see cheney in his good morning america interveiw....the way he looked at her and said "SO"?

Fvcking evil like ive never seen...

[240 is Back]

cheney believes in what he's doing.

it's not about the $... he was worth hundreds of mil before he entered office.  He's had 4 heart attacks as of 2000... he does this because he believes in the future of the USA.  I know he's more hated than Bush, but he's pretty frank and direct about his intentions, whereas others lie about it.

[Bindare_Dundat]

Mortgage firm needs to raise $1bn 
 


Thornburg Mortgage shares
Thornburg Mortgage has said it is trying to raise almost $1bn  in extra capital to avert a possible bankruptcy filing.
The lender, which specialises in big home loans, also plans to offer its lenders a 27% stake in the company.

The measures will significantly dilute the stakes of existing shareholders and the company's shares fell 47%.

Thornburg said that without the new capital it may be forced to seek bankruptcy protection.

Jumbo loans

In a filing with the Securities and Exchange Commission, the company warned that bankruptcy would be a possibility because it would have to sell off the rest of its mortgage assets at depressed prices.

Thornburg specialises in so-called jumbo loans of more than $417,000, which means that until recently they were not eligible for funding from the government-sponsored mortgage agencies Fannie Mae and Freddie Mac.

Thornburg's problems are another sign of the credit crunch spreading from sub-prime lenders to others.

It owes money to five lenders, which are affiliates of Bear Stearns, Citigroup, Credit Suisse, Royal Bank of Scotland and UBS.

The fresh falls in Thornburg's share price followed a 32.4% fall on Monday last week after the company said it could not meet demands for extra cash and collateral from its lenders.
 

[Neurotoxin]

This week is an interesting case study in something I've noticed in the short time I've been trading as a hobby:  the market almost always overreacts to news and events, then partially retraces later in the session or the next day.

There were two significant events this week:  the Sunday announcement of JPM's takeover of Bear for $2/share (which had been trading at $80 two weeks earlier), and GS and LEH announcing earnings before Tuesday's session and beating the estimates.

So, Sunday night you just know the market's gonna get slaughtered on Monday.  But if the market were efficient, wouldn't you think the adjustments would either be already priced into the market's much lower opening, or at the very least settle out in short order given everyone had this news prior to opening?  Nope, as per usual people panic, overreact, and you get a nice steep decline all frickin' day long  (not that I'm bitching, I made a killing on shorts Monday).

Now, what seems to happen a lot of the time is the next day the stocks in question regain some of their losses, as people have a chance to take a deep breath and realize things might have been beaten down too far and go shopping for bargains.  However, this Tuesday you had a second piece of news to react to... GS and LEH beat earnings (never mind that they're down 50% from last year  ).  Does the earnings news justify a major rally?  Of course not.  The fundamental situation hasn't changed, the credit crisis is still there, and Lehman could easily find itself the next BSC.  But, as usual the market overreacts, and the effect is magnified by the retracement of Monday's decline.  Result:  one of the best days the market has seen in a while.

So now it's Wednesday.  What happens?  People begin to realize that the size of yesterday's rally was unjustified given the fundamentals, and where do prices go? You guessed it, South.

Where does the market go from here?  Who the hell knows, but if every day were as predictable as the last three we'd all be billionaires.  I'm just parking my cash waiting for the next piece of news that the market can overreact to so I can ring the cash register again.

goat, what you're seeing is typical in a bear market. no such thing as a 420 point rally in a bull market, why ? because there are very few short positions in bull markets.

in this current market environment, everyone and their grandmother is short. so when marginal "good news" comes out, the shorts panic and cover, resulting in a big one day "rally" with typically no follow-thru.

in order to sustain a rally, new money needs to enter the market, not just shorts covering. (as you've witnessed recently)


this is the underlying reason i stress selling into any rally.


i hope this helps.





NT

[War-Horse]

Mortgage firm needs to raise $1bn 
 


Thornburg Mortgage shares
Thornburg Mortgage has said it is trying to raise almost $1bn  in extra capital to avert a possible bankruptcy filing.
The lender, which specialises in big home loans, also plans to offer its lenders a 27% stake in the company.

The measures will significantly dilute the stakes of existing shareholders and the company's shares fell 47%.

Thornburg said that without the new capital it may be forced to seek bankruptcy protection.

Jumbo loans

In a filing with the Securities and Exchange Commission, the company warned that bankruptcy would be a possibility because it would have to sell off the rest of its mortgage assets at depressed prices.

Thornburg specialises in so-called jumbo loans of more than $417,000, which means that until recently they were not eligible for funding from the government-sponsored mortgage agencies Fannie Mae and Freddie Mac.

Thornburg's problems are another sign of the credit crunch spreading from sub-prime lenders to others.

It owes money to five lenders, which are affiliates of Bear Stearns, Citigroup, Credit Suisse, Royal Bank of Scotland and UBS.

The fresh falls in Thornburg's share price followed a 32.4% fall on Monday last week after the company said it could not meet demands for extra cash and collateral from its lenders.
 

Whats crazy is that this scenario is going to start happening almost daily with other banks.   Who in the hell bought a 479,000 home anyway??     I have money, and when i walk in some of my friends homes that look like ceasars palace in vegas....I just nod my head and ask "WHY"?    Of course theyre trying to sell and are upside down now and the economy is forcing their jobs to cut back hours or layoff so they'll add to the list of foreclosures soon.
Most of these guys are 10 to 20 yrs younger than I am...emotional buyers.

[G o a t b o y]

goat, what you're seeing is typical in a bear market. no such thing as a 420 point rally in a bull market, why ? because there are very few short positions in bull markets.

in this current market environment, everyone and their grandmother is short. so when marginal "good news" comes out, the shorts panic and cover, resulting in a big one day "rally" with typically no follow-thru.

in order to sustain a rally, new money needs to enter the market, not just shorts covering. (as you've witnessed recently)


this is the underlying reason i stress selling into any rally.


i hope this helps.





NT

Good explaination, thanks!  I have noticed that it's been much easier to make big single-day money in the bear market (mostly on shorts, but also playing the counter reaction that comes later long) than it was in the bull market last year.  By making smart plays, I did make good money last year on longs, but it was smaller amounts spread over more days.  Since the first of the year, after switching AAPL plays long to short and riding it down, I've made single-day killings by playing the trends on financials following news.

All things considered, I like the bear market better... not only because of the trade profits, but also because I'm far more confident in the reasons WHY I'm making particular moves, and my win/loss percentage is far, far higher.  I understand that can't be sustained forever, since I appreciate your point about the need for new money, but it sure is fun while it lasts.