Stocks

Smooth Operator · #1 08-21-2009, 10:38 PM

Quote:

Originally Posted by Cannon Shell

Keep crowing.

Okay

SC - 31
OSU - 17

JJP · #2 08-22-2009, 07:48 AM

We are headed for a major correction; possibly another crash. True, the market was extremely oversold in early March. The most oversold relative to the 200 DMA and 50 DMA that I have ever seen. But we've rallied 50% since then. So what has happened?

Analysts had cut their estimates too much. Companies cut costs significantly and most were able to beat earnings. But they were basically jumping over a bar one inch off the ground. Cost cutting will work for a quarter, maybe even two but that's it. At some point, revenues have to grow. Revenue numbers have been poor for most of these so-called earnings beats.

Unemployment is near 10%, based on government numbers but those numbers don't count people who no longer can file claims. The realistic number is closer to 17%. The consumer is also getting older, and getting past their biggest spending days. This obviously will hurt corporate growth in years to come. Look at what happened to Japan in the 90s. Hopefully that won't be us.

Many people also forget that after 1929, there were some huge market rallies in the 1930s, but they all ended up giving back their gains. The market must be traded......buy and hold is dead forever.

Rupert Pupkin · #3 08-23-2009, 04:16 AM

Quote:

Originally Posted by JJP

We are headed for a major correction; possibly another crash. True, the market was extremely oversold in early March. The most oversold relative to the 200 DMA and 50 DMA that I have ever seen. But we've rallied 50% since then. So what has happened?

Analysts had cut their estimates too much. Companies cut costs significantly and most were able to beat earnings. But they were basically jumping over a bar one inch off the ground. Cost cutting will work for a quarter, maybe even two but that's it. At some point, revenues have to grow. Revenue numbers have been poor for most of these so-called earnings beats.

Unemployment is near 10%, based on government numbers but those numbers don't count people who no longer can file claims. The realistic number is closer to 17%. The consumer is also getting older, and getting past their biggest spending days. This obviously will hurt corporate growth in years to come. Look at what happened to Japan in the 90s. Hopefully that won't be us.

Many people also forget that after 1929, there were some huge market rallies in the 1930s, but they all ended up giving back their gains. The market must be traded......buy and hold is dead forever.

I agree with everything you said. This rally may last another few weeks but after that I think we are in big trouble. Next month I'm going to start buying puts. The one good thing is that it's practically as easy to make money on the way down as it is on the way up.