15K dow & 2K S&P coming up?

Discussion in 'Stock Market' started by william the wie, Apr 7, 2011.

  1. william the wie
    Offline

    william the wie Gold Member

    Joined:
    Nov 18, 2009
    Messages:
    9,223
    Thanks Received:
    910
    Trophy Points:
    205
    Ratings:
    +2,924
    Just wondering. The facts being quoted by the bulls are:

    The Wilshire 5000 is in record territory.

    The best of the worst argument is being dragged out again about the US vs. the EU and the Far East.

    A Dow theory buy signal of the transports hitting a new high has happened.

    Just thought the response to this idea would be fun to watch.
     
  2. Trajan
    Offline

    Trajan conscientia mille testes

    Joined:
    Jun 17, 2010
    Messages:
    29,048
    Thanks Received:
    4,754
    Trophy Points:
    48
    Location:
    The Bay Area Soviet
    Ratings:
    +4,760
    hummmm, question; the ecb has raised rates today, they appear to be set on pushing back on cheap money combating what they think is an inflationary trend, so, does some of the money which would have worked there, head to the dow?
     
  3. Toro
    Offline

    Toro Diamond Member

    Joined:
    Sep 29, 2005
    Messages:
    58,554
    Thanks Received:
    12,329
    Trophy Points:
    2,180
    Location:
    The Big Bend via Riderville
    Ratings:
    +35,721
    What happens after QE2 is the trillion dollar question.

    In the bulls' favour is that retail has been on the sideline the whole way up. There is a massive amount of money on the sidelines. But I'm not convinced yet that it will come off the sidelines after people were burned badly by the market over the past decade.
     
  4. dilloduck
    Offline

    dilloduck Diamond Member

    Joined:
    May 8, 2004
    Messages:
    53,240
    Thanks Received:
    5,552
    Trophy Points:
    1,850
    Location:
    Austin, TX
    Ratings:
    +6,408
    Is it real money or the fake stuff again ?
     
  5. Trajan
    Offline

    Trajan conscientia mille testes

    Joined:
    Jun 17, 2010
    Messages:
    29,048
    Thanks Received:
    4,754
    Trophy Points:
    48
    Location:
    The Bay Area Soviet
    Ratings:
    +4,760
    QE is dead, come July. As a mechanism its taken us as far as it can. IF oil is north of , well where it is today at $110, the pain will be palpable.
     
  6. theHawk
    Offline

    theHawk Registered Conservative

    Joined:
    Sep 20, 2005
    Messages:
    15,460
    Thanks Received:
    3,108
    Trophy Points:
    280
    Location:
    Germany
    Ratings:
    +12,489
    As the dollar gets weaker people will trade them in for stocks. It doesn't mean the economy is on any real recovery, it just means the dollar is falling like a brick and inflation is rising.
     
  7. william the wie
    Offline

    william the wie Gold Member

    Joined:
    Nov 18, 2009
    Messages:
    9,223
    Thanks Received:
    910
    Trophy Points:
    205
    Ratings:
    +2,924
    I agree that is part of the story but the rapidly aging population of the Far East and EU has already caused deflation in Japan and that deflation will also be seen in all of northern and eastern Eurasia in the not too distant future is the rest of the story. It won't just be Americans buying American stocks.
     
  8. Toro
    Offline

    Toro Diamond Member

    Joined:
    Sep 29, 2005
    Messages:
    58,554
    Thanks Received:
    12,329
    Trophy Points:
    2,180
    Location:
    The Big Bend via Riderville
    Ratings:
    +35,721
    Hard to say.

    I'm not planning on having much risk exposure come the end of June, but the end of QE2 will effectively end the easing cycle of the Fed. No doubt it has raised asset prices, but generally, stocks don't collapse at the end of the easing cycle. They usually collapse at the end of the tightening cycle. However, I acknowledge that this time really is different, and stocks might behave differently.

    Also, as oil marches to $120 and higher, QE2 has also affected oil prices. If the end of QE2 ends the relentless march upwards of risk assets, I would also expect it to affect the price of oil and other commodities.
     
  9. william the wie
    Offline

    william the wie Gold Member

    Joined:
    Nov 18, 2009
    Messages:
    9,223
    Thanks Received:
    910
    Trophy Points:
    205
    Ratings:
    +2,924
    Libya is the bigger problem Toro.
     
  10. finebead
    Offline

    finebead VIP Member

    Joined:
    Dec 24, 2007
    Messages:
    284
    Thanks Received:
    58
    Trophy Points:
    78
    Location:
    Texas
    Ratings:
    +59
    The market letter I subscribe to says the US entered a primary bull market in March 2009 that remains in effect. With the stimulus, low interest rates and QE, that should hold us up for 3 years. Then we find out if the economy got back on sound enough legs to walk on its own. Writer expected a couple of decent corrections in 2011, one could come after QE 2 ends in June.

    But there is a lot of money in money market accounts not earning anything (I have plenty on the sidelines, some in, about 1/3 in the market).
     

Share This Page