Official Dow 10,000 thread

[Toro]

I covered my puts on the USO last week.

instead of the uso why not trade options on the actual crude future?

I am not allowed to because of trading restrictions at work. That is what I would prefer to do. I don't like the USO but I want exposure to crude.

I covered all my shorts today. I think the move is too powerful. Stocks are being jammed up. Arguing with the market is usually an unwise thing to do.

We are extremely overbought. However, I think that once we work off the overbought condition, we will move higher again. At some point, you are not going to want to own a single equity, but that time has not arrived.

 

[Sinatra]

I had no idea there was a market thread in this place! Awesome!

This move up is legit. There will be a bit of profit taking short term, but overall, the economy is lumbering back into profits mode. 2010 should be a decent year overall - though there is about a 50/50 shot at seeing a Dow 10k mark before year's end - the stars are aligning - the housing market is stabalizing, steel is going up which is a signal I have used for years as an indicator of future growth. A sector I am willing to gamble a bit on now is healthcare. The Obamacare pounded these stocks down, and now with signals from DC that whatever might be coming down the pike regarding health care reform will be far less damaging and comprehensive than thought just a month or two ago, these companies are undervalued - similar to the bank stocks at the start of the year.

My only concern is that we could see a somewhat "jobless" recovery where unemployment stays around the 8.5% - 9.5% mark for another couple of years due to stagnant small business growth due to the continued pounding being handed out by Obama and the Democrat Congress. A political rebalancing of Congress in 2010 could greatly alleviate this situation though...

 

[wimpy77]

I had no idea there was a market thread in this place! Awesome!

This move up is legit. There will be a bit of profit taking short term, but overall, the economy is lumbering back into profits mode. 2010 should be a decent year overall - though there is about a 50/50 shot at seeing a Dow 10k mark before year's end - the stars are aligning - the housing market is stabalizing, steel is going up which is a signal I have used for years as an indicator of future growth. A sector I am willing to gamble a bit on now is healthcare. The Obamacare pounded these stocks down, and now with signals from DC that whatever might be coming down the pike regarding health care reform will be far less damaging and comprehensive than thought just a month or two ago, these companies are undervalued - similar to the bank stocks at the start of the year.

My only concern is that we could see a somewhat "jobless" recovery where unemployment stays around the 8.5% - 9.5% mark for another couple of years due to stagnant small business growth due to the continued pounding being handed out by Obama and the Democrat Congress. A political rebalancing of Congress in 2010 could greatly alleviate this situation though...

unfortunately that's what econonomist are predicting. they are saying the unemployment will stay at 8 to 9% for at least next year. but yeah sinatra this forum is where all the cool people hang out

 

[DavidS]

To the OP: You still have two months left for your prediction of DOW 10,000 before the end of the Summer comes true.

 

[Valerie]

To the OP: You still have two months left for your prediction of DOW 10,000 before the end of the Summer comes true.

Good call, David. I bought my diamonds at 68! ( DIA )


DIAMONDS TRUST SER 1
(NYSEArca: DIA)
DIA: Summary for DIAMONDS TRUST SER 1 - Yahoo! Finance



And by the way CAT is over $40 again. I bought in my IRA starting at ~$33 and averaged down to ~$22. so I feel pretty good about it.

CATERPILLAR INC
(NYSE: CAT)
Last Trade: 41.26

 

[Valerie]

Ooooh BAD call, David.

http://www.usmessageboard.com/the-flame-zone/82930-fuck-you-gunny.html#post1365822



Try to stick to the topics, tough guy!

 

[Sinatra]

To the OP: You still have two months left for your prediction of DOW 10,000 before the end of the Summer comes true.

Good call, David. I bought my diamonds at 68! ( DIA )


DIAMONDS TRUST SER 1
(NYSEArca: DIA)
DIA: Summary for DIAMONDS TRUST SER 1 - Yahoo! Finance



And by the way CAT is over $40 again. I bought in my IRA starting at ~$33 and averaged down to ~$22. so I feel pretty good about it.

CATERPILLAR INC
(NYSE: CAT)
Last Trade: 41.26

Nice! CAT is another leading indicator of where the economy will be going in 3 - 6 months.

The potential upside in China and India is INCREDIBLE.

 

[Toro]

The problem in China is that there has been massive overbuilding. Massive. The Chinese have not suspended the laws of supply and demand, so at some point, it will come back at us in a big way.

Many of the imbalances in the global economy have not been fixed. We are rising on liquidity, which is what got us into this mess in the first place. The massive amount of stimulus, particularly from the Fed, are going to have enormous ramifications and could be even bigger than the housing bubble if they don't take significant steps to reduce the liquidity.

In the mean time, the market is going higher.

 

[Sinatra]

The problem in China is that there has been massive overbuilding. Massive. The Chinese have not suspended the laws of supply and demand, so at some point, it will come back at us in a big way.

Many of the imbalances in the global economy have not been fixed. We are rising on liquidity, which is what got us into this mess in the first place. The massive amount of stimulus, particularly from the Fed, are going to have enormous ramifications and could be even bigger than the housing bubble if they don't take significant steps to reduce the liquidity.

In the mean time, the market is going higher.

Ah hell...now you got me worried again!

I agree regarding the stimulus - my God what a mess that thing is proving to be.

And the extent of the Fed's role is getting very worrisome.

But for today we live, for tomorrow may never come...

 

[Toro]

The federal government's stimulus hasn't really started yet. That will add to the fire.

At some point, you won't want to own a single share of equity. Now is not that time.

(I think.)

 

[Sinatra]

The federal government's stimulus hasn't really started yet. That will add to the fire.

At some point, you won't want to own a single share of equity. Now is not that time.

(I think.)

My broker told me to look for substantially increased inflation by this time next year - something about it helping to reduce the dollar value of the debt.

That sound about right to you?

Seems a very dangerous fiscal game our government is playing...

 

[Toro]

I don't think inflation is a worry at this time. It may be down the road but there are still too many issues in the economy to worry about inflation IMHO.

What you are seeing now is the beginning of asset inflation as excess liquidity flows into asset markets instead of consumer prices.

 

[Paulie]

The federal government's stimulus hasn't really started yet. That will add to the fire.

At some point, you won't want to own a single share of equity. Now is not that time.

(I think.)

When you say not a single share of equity, are you suggesting commodities in lieu of?

I happen to think gold is a steal at its current price, but god damn if it still isn't expensive as hell for a less-than-wealthy person such as myself.

Just for shits and giggles, what do you think the major indices will peak at, and when?

 

[Toro]

I have no idea where the indices will peak at. All I know is that the path of least resistance is to the upside, even if we go down a bit to work off this overbought condition.

I do not know what will go up if and when equities fall back down again. The problem is that everything is so macro driven and correlations amongst different assets are as high as they have ever been. That makes sense, given the severity of the financial crisis and the enormity of response.

To clarify my response to Sinatra, inflation could be a problem down the road. However, we are more likely to get asset inflation first. In this environment, it would not surprise me if gold went to $5000. That is NOT a prediction. I doubt it will get there. But it wouldn't surprise me as I believe the odds of an even greater dislocation in the future are rising.

 

[Neubarth]

Just for shits and giggles, what do you think the major indices will peak at, and when?

I keep on thinking the major indicies have peaked everyday. Profits keep falling. GDP is falling. Unemployment is soaring. Housing sales are just bouncing around on the bottom only influenced by the local rates of repossessions and auctions. Housing values are still coming down all around the nation. I see almost no positives and can not believe that people are putting money into the stock market. Yet, they are, or something is.

 

[Paulie]

Just for shits and giggles, what do you think the major indices will peak at, and when?

I keep on thinking the major indicies have peaked everyday. Profits keep falling. GDP is falling. Unemployment is soaring. Housing sales are just bouncing around on the bottom only influenced by the local rates of repossessions and auctions. Housing values are still coming down all around the nation. I see almost no positives and can not believe that people are putting money into the stock market. Yet, they are, or something is.

When you say profits are falling, I'm inclined to disagree. We're seeing earnings numbers meeting or beating in many instances, and that is why equities have still been rising. What you mean to say is probably that REVENUES are falling, which they are. Companies are boosting earnings in the face of falling revenues by trimming the fat, and this is what they SHOULD be doing in this environment. But we're in an economic downturn, so falling revenues is to be expected considering the current rate of consumer savings vs. spending.

GDP is also expected to bottom soon, but of course that remains to be seen. I'm not as easily taken by government-produced statistics myself, so even when a positive GDP number is first announced, I'll be leery about it.

 

[Toro]

Neubarth

There is a tsunami of liquidity on its way. You can stand on shore and put your hand up to stop it, or you can jump in a boat and ride it. (Or you can get to high ground and watch it.)

That is what you are dealing with.

 

[Paulie]

I'm going to ride it, myself. I'm in on a couple small companies with huge growth potential, that are almost certainly going to buy my family our first house...not to mention, offer us a nice financial cushion. I'm already up an average of 600%, and that's WITH a recent major correction. I was up over 1000% at one point, and will be back to that again in the future.

As much as I fear for this country with the coming inflation potential, I'm certainly not going to get burned by it.

 

[Sinatra]

I have no idea where the indices will peak at. All I know is that the path of least resistance is to the upside, even if we go down a bit to work off this overbought condition.

I do not know what will go up if and when equities fall back down again. The problem is that everything is so macro driven and correlations amongst different assets are as high as they have ever been. That makes sense, given the severity of the financial crisis and the enormity of response.

To clarify my response to Sinatra, inflation could be a problem down the road. However, we are more likely to get asset inflation first. In this environment, it would not surprise me if gold went to $5000. That is NOT a prediction. I doubt it will get there. But it wouldn't surprise me as I believe the odds of an even greater dislocation in the future are rising.

Would that not drive up the prices of say, houses? If so, would this then be a purposeful manipulation of that kind of inflation?

 

[Toro]

I think that if we work through the excess of inventory of housing, prices would start to rise. I do believe the government is targeting real estate prices. They want to keep house prices up to stem the defaults in the banking system.