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I am not a trader, and I own no stock, I am just a casual observer of the Dow.

As a novice in finance, it looks to me as if the Dow Jones has established a median value for itself of 8500.

For the past few weeks, it seems whenever it gets too far above 8500, it drops like a stone. Whenever it gets too far below 8500, it rises dramatically.

http://chart.finance.yahoo.com/c/1y/_/_dji

Does it look like this to anyone else, or am I all wet in my assumptions?
 

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If you look at the DOW chart during the great depression crash, it took around 3 years to go from peak to low point. It also had some relatively major ups and downs along the way.

IMO - We aren't even close to bottom yet
 

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NOPE....NO....etc..............when gold and silver hit Backwardation Tsunami in February, we should see a world ecomic collapse, and the market go to "unretriveable".......the paper flow from Washington is only a red herring to allow for NWO positioning........RUReady:eek::taped::sleep:
 

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Watchin tha world go by
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stock price ta earnings ratios still way outta line --- its got a ways to go

only reason it has remained as high as it is is the ponzi scheme of printed money pumped in at a tremendous rate.

when that stops --- the floor drops -- like an out of control elevator -- with the same result, if yer in it

git out of the elevator -- NOW
 

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In my opinion, it's not going to level out until it drops to 6,000, and that's my opinion when I'm feeling optimistic. :(

Ask again tomorrow.
 

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I'll answer your question by offering you these articles:


London Times: "Most of us planning for the next few months are building the economic equivalent of bomb shelters: 2009 will be treacherous"


Most of us planning for the next few months are building the economic equivalent of bomb shelters: 2009 will be treacherous. We face a formal recession in most developed economies, and the contraction is highly likely to be more severe in the UK than almost anywhere else.

Companies and consumers will continue to tighten their belts. There will be a sharp rise in unemployment. Many businesses, especially big ones, will become unviable - and will present the Government with an appalling dilemma of which ones to put on life support.

We have borrowed too much money and the process of paying it back is not only leading to a fall in living standards but is also precipitating very significant changes in how the global economy operates.

Yahoo Finance: "The economy has just collapsed, has gone into freefall"

A number of U.S. companies have announced jobs cuts this week, including General Motors and asset manager Legg Mason Inc Friday, a day after phone giant AT&T said it was letting 12,000 workers go. Economists expect the unemployment rate to top 8 percent by late next year. "You can't get much uglier than this. The economy has just collapsed, and has gone into a
free fall," said Richard Yamarone, chief economist at Argus Research in New York. The collapse of the housing market sparked a credit crisis that has panicked investors and destroyed some of the oldest names in banking

NY Times: "Next 6 months will be devastating for the average American"


Despite months of rescue efforts, hundreds of billions in government spending and an avant-garde apparatus of financial tools, the American economy has only worsened, and at a faster rate than nearly anyone predicted. This recession, which officially began in December 2007, now appears virtually certain to be the longest downturn — and possibly most severe — since the end of World War II, as evidenced last week by a demoralizing rat-a-tat of grim reports on jobs, sales and public confidence.

"For the average American it’s going to be devastating for the next 6 to 12 months,” said Bernard Baumohl, chief global economist at the Economic Outlook Group, a forecasting firm. He added, "I have not seen anything particularly hopeful right now, which tells me we have a ways to go . . ."
 

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Jim RogersThe commodities guru predicted two years ago that the credit bubble would devastate Wall Street.


We are in a period of forced liquidation, which has happened only eight or nine times in the past 150 years. The fact that it's historic doesn't make it any more fun, of course. But it is a pretty interesting time when there is forced selling of everything with no regard for facts or fundamentals at all. Historically, the way you make money in times like these is that you find things where the fundamentals are unimpaired. The fundamentals of GM are impaired. The fundamentals of Citigroup are impaired.

Virtually the only asset class I know where the fundamentals are not impaired - in fact, where they are actually improving - is commodities. Farmers cannot get a loan to buy fertilizer right now. Nobody's going to get a loan to open a zinc or a lead mine. Meanwhile, every day the supply of commodities shrinks more and more. Nobody can invest in productive capacity, even if he wants to. You're going to see gigantic shortages developing over the next few years. The inventories of food worldwide are already at the lowest levels they've been in 50 years. This may turn into the Great Depression II. But if and when we come out of this, commodities are going to lead the way, just as they did in the 1970s when everything was a disaster and commodities went through the roof.

What I've been buying recently is agricultural commodities. I've also been buying more Chinese stocks. And I'm buying stocks in Taiwan for the first time in my life. It looks as if there's finally going to be peace in Taiwan after 60 years, and Taiwanese companies are going to benefit from the long-term growth of China.

I have covered most of my short positions in U.S. stocks, and I'm now selling long-term U.S. government bonds short. That's the last bubble I can find in the U.S. I cannot imagine why anybody would give money to the U.S. government for 30 years for less than a 4% yield. I certainly wouldn't. There are going to be gigantic amounts of bonds coming to the market, and inflation will be coming back.

In my view, U.S. stocks are still not attractive. Historically, you buy stocks when they're yielding 6% and selling at eight times earnings. You sell them when they're at 22 times earnings and yielding 2%. Right now U.S. stocks are down a lot, but they're still very expensive by that historical valuation method. The U.S. market is yielding 3% today. For stocks to go to a 6% yield without big dividend increases, the Dow will need to go below 4000. I'm not saying it will fall that far, but it could very well happen. And if it gets that low and I'm still solvent, I hope I'm smart enough to buy a lot. The key in times like these is to stay solvent so you can load up when opportunity comes.
 
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With the auto bailout failing last night, I wouldn't be surprised to see a new low reached sometime today with the dow well below 8k at the closing bell.
 

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Only Half Human
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Not close. It will end up around half of what it is now. 4100-4500 would be my guess.
2008 was 1929. Only the beggining. The worst was to come years later in the 1932-1934 range.
Our society is very different now compared to then. It may intensify quicker this time.
 

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When it hits around 2,300 it will be in the realm of sanity again. If you keep paper assets, you will lose everything.
 

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My guess would be Dow 6000 by summer and maybe 3000 by the end of 2009.

A lot of economists are trying to say the same thing but its funny to hear the talking heads that interview them block them from saying it effectively. I watched a guy try to say something the other day and he spent 5 minutes trying to finish a single sentence but the interviewer wouldn't let him finish...

I know a little about commodities and they have been hit hard. When prices rose a few years ago, they did all this exploration, and setting up infrastructure and now the mines, or oil wells are ready to go and BTW costing money and there is no market for the product at the current price.

Oil and metals (other than precious metals) have imploded. No one says it openly, but we now have HUGE infrastructure in Canadian scale and is literally hundreds of other projects that are profitable with oil at 100 a barrel but either not profitable or barely profitable now. Those companies will be desperate for cash next year and will have to pump the oil out at a loss just to pay the bills and stay afloat. I guess what I'm trying to say is look for commodities prices to drop much further, especially while the economy shows no signs of improvement.

This is a problem that will not go away for a long time. Our government keeps printing money. This has the double effect of limiting the worst of this recession, but also of prolonging it.
 

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Only Half Human
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With all the money printing hyperinflation on all lifes nessecities is right arond the corner. Add in the the shipping problems and you will have starving people ready to kill for food here in the US.
 

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I know I am going against the grain but the answer is YES.

It has hit the bottom and now is time to get in. The most recent falls are from short selling and have nothing to so with the fundamentals of companies. The result is that many companies are priced far below what they should be according their yield.

If you take a medium view (2-3 years) you can do very well.

(Now I will put on my foil for the flames that are surely coming)
 
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I agree with you....for now.
I think it might take a little time for Che'Bama to muck things up for Wall St.
Short selling, tax loss selling, and mutual fund redemptions are what have been driving the market lower recently. Valuations are actually good on a lot of stocks.
I have been buying CHK recently and I did ok trading the rise in DRYS....but I'm out for now.
I like CREE as I think Che' is going to put his weight behind LED lighting.
 

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I am not a trader, and I own no stock, I am just a casual observer of the Dow.

As a novice in finance, it looks to me as if the Dow Jones has established a median value for itself of 8500.

For the past few weeks, it seems whenever it gets too far above 8500, it drops like a stone. Whenever it gets too far below 8500, it rises dramatically.

http://chart.finance.yahoo.com/c/1y/_/_dji

Does it look like this to anyone else, or am I all wet in my assumptions?
Also, it doesn't matter if the DOW goes all the way up to 20,000 if it also takes more than $10 to buy a loaf of bread.

The stock market is not the economy. It is related, but not a direct indication of the health of the economy. IE, if the DOW has stabilized, it in no way means the economy has stabilized. The stock market is all about sentiment, and sentiment can be(and is now) delusional.
 

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I know I am going against the grain but the answer is YES.

It has hit the bottom and now is time to get in. The most recent falls are from short selling and have nothing to so with the fundamentals of companies. The result is that many companies are priced far below what they should be according their yield.

If you take a medium view (2-3 years) you can do very well.

(Now I will put on my foil for the flames that are surely coming)
You might do well in dollar terms. But in terms of value I think it is almost impossible to win if you hold dollar denominated assets. The dollar is about to die.

I don't really know though.

I base my opinion on the information given by people like Peter Schiff. He seems to have his sh-- together on this and explains issues clearly, unlike the economic propagandists, which is just about everyone else.
 
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