Market rally over?

[Valuist]

We all suspected a correction, possibly quite sizeable, was coming soon. Can't help but think it has started the past two days.

[BlueShoe]

Agree. When all of the year end earnings reports are out things could get worse. The next few months look pretty iffy. The dow sinking back below 10,000 would be no surprise.

[ArlJim78]

I've felt from the beginning that this rally was a lot of smoke and mirrors. The market is overpriced imo so I expect it to pull back. how far I don't know.

[RaceBookJoe]

I've felt from the beginning that this rally was a lot of smoke and mirrors. The market is overpriced imo so I expect it to pull back. how far I don't know.

Everything seems to be propped up and noodle legs. If you are an investor or have it being run by someone, you might want to take a second thought. If you only make money when the market goes up ( which is basically how most money managers/mutual funds/ financial advisors operate ) you might be in big trouble. Investing money 24/7 with no stop losses is a recipe for disaster. Now if you are a trader....markets like this and especially a day like today pays your mortgage for the 6-12 months depending on how you played it. Dont ever forget 2 things :
a. Nobody cares about your money as much as you do
b. Wall St doesnt care how much you make in the market, they only care
about how much THEY make.
best of luck in 2010
rbj
ps: whether the market pulls back or charges forward....play it how it is actually going, not what you think it will do !

[Valuist]

Everything seems to be propped up and noodle legs. If you are an investor or have it being run by someone, you might want to take a second thought. If you only make money when the market goes up ( which is basically how most money managers/mutual funds/ financial advisors operate ) you might be in big trouble. Investing money 24/7 with no stop losses is a recipe for disaster. Now if you are a trader....markets like this and especially a day like today pays your mortgage for the 6-12 months depending on how you played it. Dont ever forget 2 things :
a. Nobody cares about your money as much as you do
b. Wall St doesnt care how much you make in the market, they only care
about how much THEY make.
best of luck in 2010
rbj
ps: whether the market pulls back or charges forward....play it how it is actually going, not what you think it will do !

You are exactly right that nobody cares more than you about your money, and nobody knows your risk tolerance like yourself. I've heard a number of money managers asked which is worse: a) have their fund be down 20% for the year but the general market is down 20%, or b) have their fund be up 10% for the year but the market is up 20%. Their answer? They would rather have "a" because they can rationalize (at least in their minds) the losses, but underperformance will lead to redemptions.

Its tough to outperform mutual funds in a prolonged bull market because they are usually 100% invested at all times......but in a bear market you would almost HAVE to try to underperform them......this is when the 100% at all times really kills them.

[Robert Goren]

The Scott Brown Correction.;)

[ElKabong]

There's a Finanacial Planner here (ken moriaf) w/ a radio show who told anyone that would listen to "get out of the market, today" in late Oct 2007.

Last I heard him was 2 weeks ago, he felt 2010 w/b a good yr and was planning an exit strategy for clients in the next 10-12 months...

I need to listen to him this weekend to see if he changed his tune. From other sources I read where it's very dicey right now, the market m/b as bad as 6500 this yr.

My fear is the future...i doubt at the end of my lifetime that Wall Street is going to be THE growth engine for people's retirement or investment funds...just wish i knew zackly what engine/ market IS the future? China? A re-energized euro source (doubtful)?

[sandpit]

There's a Finanacial Planner here (ken moriaf) w/ a radio show who told anyone that would listen to "get out of the market, today" in late Oct 2007.

Last I heard him was 2 weeks ago, he felt 2010 w/b a good yr and was planning an exit strategy for clients in the next 10-12 months...

I need to listen to him this weekend to see if he changed his tune. From other sources I read where it's very dicey right now, the market m/b as bad as 6500 this yr.

My fear is the future...i doubt at the end of my lifetime that Wall Street is going to be THE growth engine for people's retirement or investment funds...just wish i knew zackly what engine/ market IS the future? China? A re-energized euro source (doubtful)?

Somebody on here, I think it was lamboguy, but I could be wrong, has been promoting gold for quite a while. I heard a guy on Bloomberg the other day promoting commodities (corn, oj, etc.) as a long-term strategy. I guess he has a point, everybody has to eat.

[BlueShoe]

Another down day worldwide. All of the major indicators around the globe had declines. Oil, gold,and silver also down today. We expected a correction, is it here? Dow sinks below 10,000 next week?

[Robert Goren]

The Scott Brown Correction continues.

[JBmadera]

FD- I am long global equities.

that said, I just don't see how we stuff the Genie back in the bottle: there's going to be a billion plus folks entering the "middle class" across the global, BRIC's eastern EMEA, LATM, etc and we've only just begun to see the rapid increase in global consumption. and generally speaking I think US co's are best positioned to take advantage of this rapid increase in global consumption, esp hi tech, fin ser, "skilled" mfg, etc.

I see a 10-15% correction as another great buying opportunity.

jb

[boxcar]

The Scott Brown Correction continues.

Yeah, right. Like the WS folks want socialized medicine. :rolleyes:

But on the the upbeat side, let's not forget that Scott Brown single-handedly and before he has even assumed his Senate seat brought an end to the health care crisis in this country -- implied by Pelosi's new post-election tune that there's no rush any longer. ;)

Boxcar
P.S. Even Chrissy Dodd says that we should slow things down now.

[chickenhead]

at least in the companies I'm invested in, ahead of, during, and after the lows -- profits are coming along quite nicely, no beefs so far as their performance, current PEs of 12 to 20 or so depending on exhibited growth, stable, and well capitalized. I don't see any reason to fear anything.

We're gonna bounce around inside a good sized window that tracks earnings, and earnings will do what they're gonna do.

[RaceBookJoe]

FD- I am long global equities.

that said, I just don't see how we stuff the Genie back in the bottle: there's going to be a billion plus folks entering the "middle class" across the global, BRIC's eastern EMEA, LATM, etc and we've only just begun to see the rapid increase in global consumption. and generally speaking I think US co's are best positioned to take advantage of this rapid increase in global consumption, esp hi tech, fin ser, "skilled" mfg, etc.

I see a 10-15% correction as another great buying opportunity.

jb

Best thing to do is make a bunch of money on the downside, so when we get the bottom ( where and when that is? ) and you will have extra money to play the upmove. rbj

[RaceBookJoe]

There's a Finanacial Planner here (ken moriaf) w/ a radio show who told anyone that would listen to "get out of the market, today" in late Oct 2007.

Last I heard him was 2 weeks ago, he felt 2010 w/b a good yr and was planning an exit strategy for clients in the next 10-12 months...

I need to listen to him this weekend to see if he changed his tune. From other sources I read where it's very dicey right now, the market m/b as bad as 6500 this yr.

My fear is the future...i doubt at the end of my lifetime that Wall Street is going to be THE growth engine for people's retirement or investment funds...just wish i knew zackly what engine/ market IS the future? China? A re-energized euro source (doubtful)?

Dont we all wish we new where the next pot of gold would be found huh. I think that the best way to play things always, but especially now is to find the hottest stocks/etf, etc in the hottest sectors or reverse it to the downside ( weakest stocks/etfs..in the weakest sectors ).
You mentioned China....i think China will be the biggest profit opportunity in the next decade, and possibly Australia too.
China : on top of having $2 Trillion in cash, they have a long term plan. They have been building thousands of miles of high-speed rail lines, they are planning to build a dozen airports the size of LAX, they already have a highway construction plan under too. China is also the world's largest investor in alternative energyand pollution control. Will it be an up and down ride..of course, everything is...but if I were you or anyone else, i would be reading as much as I can about China and its future.
Australia : the main thing i like about Australia is that they have a ton of natural resources, and right next door ( Asia) there is huge demand for them. Also, their balance sheet is full of long-term debt and they arent piling additional debt like hmm us for example.
For commodities, my main focus is oil,natural gas, gold and lithium.
Do you own research and I am sure you will find your pot of gold. best wishes. rbj

[Valuist]

I agree China is the first place to look, and India as well. As more and more Chinese and Indians (as in India) improve their lot in life, they will consume more. Recently, the US was consuming 25% of the oil (with 4% of the population) but we didn't have to compete with China and India for oil. That will be changing.....and as China works to build their infrastructure, commodity prices will continue to rise. The resource rich countries like Austrailia, Brazil, Russia and Canada will benefit.

I'm not that crazy about tech. I think there's a few good companies like Apple, Quallcom and Cisco but I don't see the rest of them getting anywhere near the early 2000 levels.

Banks? Who knows......seems like Obama is on a witch hunt to hurt the banks.

Gold? Has really been in a downtrend so far in 2010. I like silver better, and supposedly there's a lot less future supplies of silver in the earth.

We've been fortunate that the market has been a one way train; going down, down down from fall 2008-March 2009, then up, up and up until the past week. Let's hope it doesn't get like 2000-2002; that was a brutal period. 2 weeks of strong rallies, 3 weeks of getting killed; 6 weeks of good, then gains gone in 3 weeks.

[rgustafson]

There is no pot of gold, key to the mint, or holy grail in the financial markets, no market timing magic that will make you rich. Today's guru is tomorrow's goat.The key to success is asset allocation, to be widely diversified. Domestic and foreign equities, both growth and value, domestic and foreign bonds, real estate, energy, and commodities to a small extent. Also keep your expenses to a minimum. If you are upset about market fluctuations on a daily, weekly, or monthly basis, you probably shouldn't have your money there. Pick up one of William Bernstein's books and read it a couple of times. Think about what he has written about financial markets historically and decide for yourself if his advice is something you should heed if you are really serious about your financial future.

[RaceBookJoe]

There is no pot of gold, key to the mint, or holy grail in the financial markets, no market timing magic that will make you rich. Today's guru is tomorrow's goat.The key to success is asset allocation, to be widely diversified. Domestic and foreign equities, both growth and value, domestic and foreign bonds, real estate, energy, and commodities to a small extent. Also keep your expenses to a minimum. If you are upset about market fluctuations on a daily, weekly, or monthly basis, you probably shouldn't have your money there. Pick up one of William Bernstein's books and read it a couple of times. Think about what he has written about financial markets historically and decide for yourself if his advice is something you should heed if you are really serious about your financial future.

With this post i have to ask if you are a mutual fund manager? Also, what do you consider to be a good annual return? rbj

[PaceAdvantage]

The Scott Brown Correction continues.Actually, the Scott Brown effect is best illustrated with a chart of the dollar...if you look at one, you'll see that the dollar has put in a pretty strong run starting on Tuesday (coincidentally), and really responded well right after the Mass. polls closed.

Now, I wonder why that would be? Is it because there is now less of a chance that the US will be wasting GOBS of money it doesn't HAVE on socialized medicine it doesn't WANT or NEED?

[lamboguy]

Actually, the Scott Brown effect is best illustrated with a chart of the dollar...if you look at one, you'll see that the dollar has put in a pretty strong run starting on Tuesday (coincidentally), and really responded well right after the Mass. polls closed.

Now, I wonder why that would be? Is it because there is now less of a chance that the US will be wasting GOBS of money it doesn't HAVE on socialized medicine it doesn't WANT or NEED?the dollar is now on a counter trend bounce. in markets nothing goes straight up or straight down. the dollar is probably on a rally up to 81. then i believe it will continue on its course down to 52. as we know clinton had a strong dollar policy and the equity markets went up with it. bush had a dollar destruction policy, obama has now followed on the heels of bush. dollar destrution leads to the ruination of this place. it looks like GEITNER is on the way out, VOLKER who has no problem raising rates might be behind policy now. personally i don't think he can save the dollar no matter what he does at this point. i am sure he is going to try to back the currency with GOLD.

[rgustafson]

With this post i have to ask if you are a mutual fund manager? Also, what do you consider to be a good annual return? rbj

RacebookJoe, I have never been employed in the financial sector in any way, shape or form and I am certainly not selling anything. I just believe in long term investing rather than stock trading. In the long run, I would consider an annual return between 7%-10% very good.

[lamboguy]

I agree China is the first place to look, and India as well. As more and more Chinese and Indians (as in India) improve their lot in life, they will consume more. Recently, the US was consuming 25% of the oil (with 4% of the population) but we didn't have to compete with China and India for oil. That will be changing.....and as China works to build their infrastructure, commodity prices will continue to rise. The resource rich countries like Austrailia, Brazil, Russia and Canada will benefit.

I'm not that crazy about tech. I think there's a few good companies like Apple, Quallcom and Cisco but I don't see the rest of them getting anywhere near the early 2000 levels.

Banks? Who knows......seems like Obama is on a witch hunt to hurt the banks.

Gold? Has really been in a downtrend so far in 2010. I like silver better, and supposedly there's a lot less future supplies of silver in the earth.

We've been fortunate that the market has been a one way train; going down, down down from fall 2008-March 2009, then up, up and up until the past week. Let's hope it doesn't get like 2000-2002; that was a brutal period. 2 weeks of strong rallies, 3 weeks of getting killed; 6 weeks of good, then gains gone in 3 weeks.silver does look alot stronger than gold, maybe more industrial uses for silver, both are not anywhere as strong as platinum these days. the reason for that is that most of the worlds gold and silver is above ground these days, platinum has not been dug up yet,

also this is just a pullback for gold setting up for a rally up to $1650 per ounce. hopefully gold never goes above that level, but i highly suspect it will. there has never been a sovereign country in the history of the world to last more than 75 with a fiat currency. the united states have been on one since NIXON. that is why i believe that VOLKER is going to put us back on the GOLD STANDARD. i would think that would be great for this country and put it right back on track with its conservetive values.

anyone that thinks that this country is going down does not really know how great this place really is. the path has gone astray lately with patriot acts and misuse of government powers. this week as witnessed here in mass, a new senator was elected by a strong movement, the teaparty movement. they stand behind candidates from both sides of the isle,notjust republicans, for those that realise that they work for the people, not the corporations or themselves.

[BlueShoe]

On a recent thread on this forum there were several critical comments about Fed Chairman Ben Bernanke. There seems to be surprising opposition to his reconfirmation in the Senate. If he were replaced, interesting to speculate as to who would replace him. I feel that Bernanke has been bad for us, that allowing interest rates to sink too low contributed to many of our present problems. Unlike many, also think that interest rates need to be raised sharply right now, and not just gradually 25 basis points at a time, more on the order of 2% is in order. Savers have been mauled, with T bills paying zero, and inflation is not far away, and needs to be attacked now.

[lamboguy]

On a recent thread on this forum there were several critical comments about Fed Chairman Ben Bernanke. There seems to be surprising opposition to his reconfirmation in the Senate. If he were replaced, interesting to speculate as to who would replace him. I feel that Bernanke has been bad for us, that allowing interest rates to sink too low contributed to many of our present problems. Unlike many, also think that interest rates need to be raised sharply right now, and not just gradually 25 basis points at a time, more on the order of 2% is in order. Savers have been mauled, with T bills paying zero, and inflation is not far away, and needs to be attacked now.the only difference in beranke staying or going is if he was gone tomorrow the market would imediately go down 2000 points, if he stays it will lose the same 2000 points, but slower.

[RaceBookJoe]

RacebookJoe, I have never been employed in the financial sector in any way, shape or form and I am certainly not selling anything. I just believe in long term investing rather than stock trading. In the long run, I would consider an annual return between 7%-10% very good.

After reading back what i wrote, i hope you didnt take it wrong. Sometimes the words look meaner than they were meant to...i am just curious to what other people think and especially when it comes to their money. I dont sell anything or am involved professional..only for myself. I am basically a trader, both very short term and swing-intermediate at most now. The buy and hold strategy to me seems dead...unless you can really stomach the huge ups and downs that the market will throw at you.
Here is my main beef with "professionals". I asked my friend who is one 2 questions and hated the 2nd answer more than the first.
Question #1 : " If i wanted to close an account, how long would it take? "
Answer #1 : " about 7-10 days " ...not what i liked to hear

Question #2 : " What type of stop loss do you use ? "
Answer #2 : " We dont use them "...to me, that is reckless.

Now above, you said that you felt that 7-10% a year is very good. It might be acceptable if it was done every year, but it never goes like that. Not to mention, you have to have the stomach to watch your money go up $10k one year, down 415k the next..up and down etc. Again, might be ok for you, but not me.
Given your 7-10% deal....on a $100,000, you would be happy making up to $10k a year. I would be totally depressed if that is all I could make with that account size. If i was controlling it, and only made $10, i would do everything i could to get better. If i was paying someone to only make those returns...they would be fired.
About being widely-diversified like you mentioned in your first post...it is only a good strategy if you are widely-diversified in good areas. Unfortunately, it doesnt always work like that. So my advice would be to study, do your own research and only invest in the stocks/sectors/etfs even options that are moving in the direction you want...whether long or short.
I wish you the best in your financial situation...the next year or years are going to be tricky, so keep your eyes wide open. When you hear something, dont believe it...but research it and find you own answer. Never trust the "numbers" you get from Wall St, they can all be manipulated. Like i said in my first post.... nobody on wall st. gives a crap hwo much money you make..they only care about how much money THEY make. best wishes rbj

[sammy the sage]

""Now, I wonder why that would be?""

Actually...our beloved gov.'t has 1.9 triilion more reasons to SELL bonds...so they HAVE to spook every-one to KEEP % rate DOWN...flight to safety trade...

[RaceBookJoe]

the only difference in beranke staying or going is if he was gone tomorrow the market would imediately go down 2000 points, if he stays it will lose the same 2000 points, but slower.

I think you are correct, especially since many people seem very skittish and the slightest hint of bad news, they are bailing. rbj

[RaceBookJoe]

RacebookJoe, I have never been employed in the financial sector in any way, shape or form and I am certainly not selling anything. I just believe in long term investing rather than stock trading. In the long run, I would consider an annual return between 7%-10% very good.

Something else i wanted to add was that when you buy and hold/hope, you have to hope that the market is where you need it to be when you retire. If you get lucky and it is way up, it was a good decision. If it is down or the same...then you gambled and lost. Consider this: in 1965 the Dow was at 874...in December of 1981 the Dow was at 875 ! 16 years to make a whopping one point. I dont think i could stomach that. But on the other hand from 1965-1999 the market moved from 874-11,498. Now that sounds great...but you would have had to mentally deal with the crashes of 1974,1987,1991,1998, and 2000. Those are reason i think buy and hold is a high-risk approach, unless you are willing to hold on for decades and can ride those rough times. I am not telling you are wrong in your financial thinking, just giving you another window to look through..trust me, i have looked through a bunch of windows unfortunately haha. rbj

[BlueShoe]

Zing. Dow down 268, briefly broke below 10,000 before settling at 10,002. Oil down almost 4 bucks, and the gold bugs also took a big hit, with the precious metal down 48 dollars. Screwy day, did anyone make money today or have any ideas?

[Robert Goren]

A 15% correction would take the dow to about 9100. There is alot of crude out there right now ready to be refined. I heard that a realistic price might be $60. As for gold who knows, maybe India has stopped buying. Then there is the whole PIGS mess.

[RaceBookJoe]

A 15% correction would take the dow to about 9100. There is alot of crude out there right now ready to be refined. I heard that a realistic price might be $60. As for gold who knows, maybe India has stopped buying. Then there is the whole PIGS mess.

My guess is Spain will be the piggiest of pigs, they seem to be in the most trouble. I am also thinking that oil has to go up eventually...just not going to buy until it actually does. rbj