Dead Cat Bounce

[RedEarth]

http://www.ritholtz.com/blog/2008/12/dead-cat-bounce/

[dmallind]

1. Just as was predicted may times before

That dead cat keeps bouncing an awful lot of times.

Here's a far more specific prediction - feel free to bookmark it.

The Dow (which is not "the market") will spend less than two weeks under 8500 at any given instance in the next six months, and will level off above that, and definitely nowhere near 7000. What we are seeing is volatility as the market seeks a bottom, which is necessary before it can recover. That volatility is centered around the mid 8000s.

Again I offer to back up my contentions - which doomsayers NEVER do on DU. I will buy 6 mo DJIA futures for 7000 from anyone willing to sell them to me, to the limit of all the cash I have.

Will you sell them? Anyone? Is anyone REALLY sure?

[ipfilter]

2. I'm with you.

However, If the DOW breaks down below the 7 handle then we plunge into the 4's. So far the 7500 support has held up nicely.

[marketcrazy1]

3. anybody

trading this market on T/A is gonna have their ass handed to them, if i had the money i would take your trade. IMO we will see DOW -6000 easily within six months! there are HUGE blow ups coming! this is FAR from over... good luck with your thesis... sincerely :)

[ipfilter]

4. Well I'm a long term

Buy and Hold investor. My investment horizon is 20+ years. I like using T/A to get an idea of where my portfolio is heading for the short term, but I don't day trade. I like dividends but nobody talks about those anymore. I'm very bearish but the closest I'll get to going short is writing covered calls. I just can't bring myself to profit off of this in good conscience.

[dmallind]

5. Think he meant me, but likewise.

Even if I lost money on the 7000 options on a cash basis now, the upside of buying at that level for my horizon (also 20 yrs or so) would more than outweigh the short term loss - which I still don't think is likely to happen. I see major major stickiness at 8000 and plenty of bounce a bit above that.

[marketcrazy1]

6. if you can afford to hold on then

20 years sounds about right, if we get the japan scenario ( and we will IMO ) at some point in the near future ( 12 - 18 months MAX ) the DOW will break below 3000 and the mid 7`s will be the "new" top going out over the next 15 to 20 years........

[dmallind]

7. Is there any real data behind this?

And I'm not immediately assuming you have none, just pretty sure I haven't seen it. There's nothing to suggest a 3000 floor, and the Japan problem was brought about by excessive savings rates and low consumption - hardly a problem we are at much risk of.

[marketcrazy1]

8. japan

had a strong manufacturing based economy at the time of their decline coupled with a strong personal savings rate wich allowed them to avoid a full on depression, the U.S. on the other hand now has a consumer driven economy and a negative savings rate. this is going to be a 1929 style market decline with the market bottom coming in around 75 to 80 percent off the high... history repeats. as for real data... what are you looking for? extrapolating from available data is difficult as a great deal of the data is hidden.. ( see the FED refusal to disclose 2 trillion of assets composition ) this "crisis" is unlike any other in the history of banking.. there are lots of nasty surprises looming in the world financial markets, many have not been addressed or even recognized.. all the data points i see indicate a dramatic decline across all segments of the economy worldwide, I believe our government knows this but will continue to shuffle the chairs as long as they can to avoid panic...

[ipfilter]

10. Have you been to

www.tickerforum.org? Lot's of bears and good info there.

[Citizen Number 9]

9. Pretty gutsy, dude.

How do you feel about getting over these humps, each of which we are almost certain to see and which will almost certainly have an effect on the Dow.
(BTW, if you don't agree they are almost certain, feel free to say why)

1. December jobs report - most likely even worse than November

2. January, February, March...... jobs reports...

3. Post-Holiday retail sales analysis certain to be either BAD or HORRIBLE which will result in additional job losses

4. 2008 summaries of GDP, almost certain to include predictions for 2009 showing worst year over year declines since 1946 by several times.

5. 4th QTR 2008 corporate reports

6. Bankruptcy of an automaker?