Please be careful about the stock market next week.

[Joe for Clark]

I am short - so you can take that into consideration.

However, that was NOT a good close - the divergence between the nasdaq and the dow has been strong all week. Bond yields broke down again today - money is flowing away from equities.

Mostly, I am pretty damn sure you are looking at spec books short. It is the only way it could have maintained such an overbought reading for so long.

The market went almost vertical up - so, what do you think the downside action is here? - every chart reader out there knows the downside is a lot faster than the upside.

This is not an over/under value question - It doesn't even matter.

Be careful next week. I think it probably topped.

Joe

[Mojambo]

1. I pretty much didn't understand a single thing you just said.

But I'm not in the market so it's cool.

[requiem99]

3. Nevermind, misread his post the first time.

[Suich]

6. My thoughts exactly!!!

:rofl: :rofl: :rofl:

[TheWraith]

66. He's concerned about a possible downward spike in the market.

A bad one. That's pretty much the short version of it. And don't forget that if you can also be affected through a number of indirect investment avenues.

[requiem99]

2. Agree. NT.

[Buttercup McToots]

4. Thank you

I have been aware of it...

[AnneD]

51. Hey McToots....

:hi: doncha feel gud. The SWT is always worth the read.

[Buttercup McToots]

79. Hoots Anne

Yes indeed...:smoke:

[Bluebear]

5. Translator please!

[Robbien]

7. Make sure your money is in cash equivalent investments

The market is going for a ride so sit this one out.

[Bluebear]

9. Thanks . . .

Does this mean don't buy or sell? What if you have money in the market already?

[Robbien]

13. If you are in the market already

be first in line on Monday to get out. Or something along those lines.

[Joe for Clark]

10. I'll give it my best.

When you buy a stock thru a broker, you should know a couple things. One - you don't actually own the stock, you own a claim against the broker dealer that is supposed to own it. Two - it is common for dealers to sell more stock than they own. When this happens, the dealers, the specialist are short. They sell stock they do not own. And they control the market.

There are instances where dealers sell two or more times the amount of stock even available. Common.

On the NYSE - each stock has one broker dealer, he is the specialist for that stock. On the Nasdaq there can be multiple specialsts for each stock. There is good and bad about each.

But the one thing you better know, when specialists come up short - it is gonna come out of your pocket, one way or the other. They never lose money. And that is the way the stock market works.

I hope that helps.

Joe

[Bluebear]

12. Thank you JFC!

[Occulus]

74. Gambling with your money

This is reason #2467 why I don't and won't invest in that shell game.

Your post proves to me why it simply isn't worth it.

[flowomo]

8. I think he just said, "Eat my shorts."

or was it the other way around?

[TechBear_Seattle]

15. More like, "Careful their shorts don't eat you."

Because if the seeming market manipulations really are market manipulations, "regular" investors will get a big chunk of their ass bitten off by brokers' shorts.

[whistle]

11. The stock market is in for a Viagra melt-away next week consisting of...

Headache
Flushing
Dyspepsia
Nasal Congestion
Urinary Tract Infection
Abnormal Vision†
Diarrhea
Dizziness
Rash

[Humor_In_Cuneiform]

14. Periodically someone posts a dire prediction/warning about the stock markets n/t

[Robbien]

16. Yes. And it is up to the reader to decide what they will do

I tend to believe the smell coming off the market today is nasty.

My reaction to that belief is my responsibility.

[Blue_In_AK]

18. Our broker has been anticipating this for about a month. n/t

[Squatch]

22. Of course he has!!

I'm sure your broker isn't working on a commission, or anything like that.

[Blue_In_AK]

27. Of course he gets a commission

but he's actually a pretty good guy and keeps very close track of what's going on and keeps us advised, so I'm not complaining. I'd rather have him looking after the money than me having to do it because I know absolutely zero about money management and really have no interest in getting involved. I just like to see those statements coming in with my little investment (inheritance money) gaining every month, which it usually does. I'm glad there are people out there who like to do this stuff, because I find it bo-ring.

[Joe for Clark]

23. An honest broker - its rare.

Joe

[Joe for Clark]

20. This is true.

But the consequences - I mean political consequences - could be really serious.

If there is a scary sell off they will blame us, you know that.

They will say - "Its because the market is afraid of the dems coming into power"
"Be afraid of the dems - be very afraid" Totally predictible.

Ever gone thru a real turn down? It is scary, if you own stocks or not.

And the fact remains - it is really over bought, when is this correction coming??

Next week would not be good for us. SO I'd be careful next week.

Joe

[Humor_In_Cuneiform]

60. Most of those who really care about the stock market are going

to vote GOP anyhow, yes?

I do have some stock which I inherited. Some of it is at a high point, but if we all sell ours, we'll contribute to a downturn, won't we?

Stock investments, if they're solid, are supposed to be a long term thingie, not a sell buy speculate thing. At least that is what I was taught, not in school, but at home.

Although I must admit I've been eyeing that one thinking about selling.

How would I go about selling them, anyhow?

I sold off one stock (Exxon on principle) but it was through some company that I could log onto that sort of came with the inherited Exxon stock.

I follow the others on Yahoo, but am really not sure how to sell them.

[Squatch]

17. What are your qualifications to be making dire predictions of market

performance?

Are you a professional in the securities markets or is all this some mutilated form of technical market timing sprinkled with absolute mumbo-jumbo?

[Joe for Clark]

28. I was.

There was nothing complicated about what I said - and what does happen - I only care about in a political context.

This market IS over bought. There is no question about that. You can log onto yahoo finance or clearstation and just look at the charts - they are free.

Timing is a judgement, I suppose.

Joe

[zonkers]

19. Spec books short???! Overbought reading!!? I have no idea what you are talking about!

I feel so dumb.

[Squatch]

21. He's pulling random words out of his arse

[Joe for Clark]

24. random words??

What are you talking about??

Joe

[Squatch]

25. I should ask you the same.

divergence?

overbought reading?

It's like I stepped into VooDoo market analysis.

"Ooooh! The divergence in the markets means that Gan is upset with you. You must sacrifice a chicken to negate the overbought reading and maximize the downside action. For, every chart reader knows the downside is a lot faster than the upside. Booga booga boooga"

[Joe for Clark]

29. I used no term that was complicated.

Overbought -is a term a chartist will use to register an rsi pattern that indicates more buying than selling. Nothing more than that. You know - buying indicates 200,000 shares bought when something less than that was available - I am over simplifing.

A divergence occurs when markets go different ways. Today, the Dow was down .7% as the nasdaq dropped 1.2%. That is a divergence.

SO - tell me, who is Gan???

Joe

[Matariki]

32. fyi

i understood what you said, and i'm a novice investor.

[Squatch]

39. And, you'll *stay* a novice investor if you listen to his claptrap.

It's absolute nonsensical BS

Ask him to throw up some numbers to substantiate his "market is overbought" claim. Following that exercise in "the Google", ask him to explain how those numbers are anything but an indication of the temporal differences in theoretical and real market prices. Next, ask him if the market is indeed overbought, why isn't he engaging in arbitrage to take advantage of the situation.

My bet is, that this person has no real interest in financials trading other than poring over the dailies and then posting dire warnings to "novice investors" on how to piss away their investments.

Beware the end of October! Ooooohhhh. Overbought! Overbouuuggggghhhhhhttt! Boooga boooga boooga

[Matariki]

41. I said I *understood* it

you two have some sort of bad blood between you or something? your level of hostility only makes sense if you guys have some history.

[Squatch]

43. My history lies with all these harbingers of market doom...

when they peddle their "the market is going to do something next week, so you better watch out" messages.

It's pure crap that may lead some of the people on this board to make bad financial decisions.

[Matariki]

46. i see. well i understand that.

but do you think the market will keep going up? I think it's due for an adjustment. not doom, but an adjustment. but who knows, it was going up even when interest rates were rising.

actually, i think that oil prices have been artificially manipulated for the election. when oil went down the dow went up. I suspect that after the election the price of oil will go up again.

[Squatch]

49. Then stay away from petroleum futures.

[zonkers]

73. Actually, I like this type of discourse as opposed to being all nicey nice.

nice, like threads often are. It's fun to read!

[Joe for Clark]

47. Dude - if you want to pick on somebody pick on me.

Your bet is I have no interests??

I said I did - upfront - You bet I don't? Want to cover my loses if I'm wrong??

I only posted this because there is or really could be a dark political cloud covering the matter.

I am very concerned about that. And being prepared is going to count a lot.

Assume I'm right - what is the response? Better be quick, because the attack will be quick.

And if it is wrong, no harm done.

No trading advice - just a heads up.

Joe

[Squatch]

48. Ummm...

maybe you didn't realize it, but *this* was directed at you:

"Ask him to throw up some numbers to substantiate his "market is overbought" claim. Following that exercise in "the Google", ask him to explain how those numbers are anything but an indication of the temporal differences in theoretical and real market prices. Next, ask him if the market is indeed overbought, why isn't he engaging in arbitrage to take advantage of the situation."

[trekbiker]

53. S&P P/E is around 16 i think which is not that bad..

of course, thats for projected 12 month "future earnings" so it could be BS. i dont think the market is excessively "overbought" and could see some more gains.. but this election is making me nervous and who knows what the herd is capable of. all bets are off when panic sets in (or irrational exuberance for that matter). not saying it will happen but I just feel better sitting on the sidelines this time. Hopefully I'll feel comfortable enough to jump back in early next year

[Joe for Clark]

54. Ok - I misunderstood you???

AM I engaged in arbitrage - you know that is something you do with currency. I Put the diamnonds for December. I hit the 117s. Selling the 121 calls.

Overbought - is not a theoretical price difference. Its a volume difference - an oscillator - up vrs down volume.

Since I am pretty sure you don't know what your asking, I don't know what numbers you are asking for.

I'd say this - you can go to www.clearstation.com That chart is free. It has ok technicals. And is very visual.

I really don't have any issue with you -

Joe

[Squatch]

57. Well...for a start you might want to refresh your memory on arbitrage

But, as for the rest of your post...just what I expected. Novice technical traders tend to get caught up in the pretty charts and pictures, and really don't know what they're talking about.

[Matariki]

61. Heh - you guys should put your dicks back in your pants til next week

then you can pull them back out and see what's what :evilgrin:

[GeorgeGist]

71. How is both going down...

going different ways? If one goes up and the other goes down, do you call that convergence?

[Ms. Toad]

84. Without getting into the stock market discussion,

Divergence means moving apart and convergence means coming together. Doesn't (necessarily) have anything to do with whether both are going the same direction or not.

If you are traveling faster than the car in front of you, you are converging - even though you are going the same direction. If you are going toward an oncoming car you are converging - even though you are going in opposite directions. You can, of course, have convergence when moving in the same direction and divergence when moving in opposite directions (once you meet and pass the oncoming car you then start diverging, for example).

[Joe for Clark]

40. Don't feel dumb -

If you don't deal with it all the time no one might expect you to understand.

And frankly - I suck at explaining things. I am trying but - this is the best I can do.

Thank god I don't teach, I suppose.

No - you have nothing to fell dumb about. Maybe I do for not explaining better.

Joe

[DemocratSinceBirth]

26. Why Would The Market Fear Democrats

The markets do better under Democrats anyway...

If you don't believe me do some research...

[Joe for Clark]

33. Because they do represent change.

Because you will have ever damn republican screaming it is so.

And it is scary. And I am worried, a little, that the dems will not react appropriately.

I remember 1987 - it will be forever branded in my mind. This looks a little too familiar to me.

Joe

[DemocratSinceBirth]

76. Bush Was Pres In 87

And I think there was a Republican pres for the first crash as well.


The worst the markets can get out of this election is gridlock which they love...


And you can't time the market...

[RandomKoolzip]

81. REAGAN was prez in 87.

Bush was veep.

[Matariki]

30. I tend to agree with you. Especially AFTER the election.

the stock market's made little sense for a while now.

[Warren DeMontague]

31. Cool. Just what we need. Another one of these threads:

AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAaaaaaaaaaaaaaaaaaaaaaaaaaaa!!!!!!!!!!!!!!!!!!!!!! We're DOOOOOOOOOOOOMED!!!!!

[Joe for Clark]

35. I hope you're right.

There is a truth you know - you shouldn't have to be afraid of anything you have time to reason out.

That is what preperation is all about.

You should be afraid of the things that hit you with no warning, though. Because those are the things you really don't have a chance with.

Look, I really do hope I'm wrong. At least for about 11 days more.

Joe

[Warren DeMontague]

36. And I'm not trying to minimize your concerns.

But if every one of these holy-shit-people-the-sky-is-about-to-fall threads had come true, by my count, in the past year alone we would have had at least 4 nuclear terror attacks, 3 Wars with Iran, 5 Housing Market Hindenburgs and 3 Stock Market Crashes. Or something like that.

[Pale Blue Dot]

38. I think you're reading the political implications all wrong.

Not that I'm hoping for your scenario, but a stock market crash would be the final nail in the coffin for the Republicans. As they have been in solely in charge of the economy for 6 years now, and the Dow is the ONLY positive thing that they can point to about it, they will have nothing left to trumpet.

Sure, they may try to say "the market is worried about a Dem takeover", but that worry alone would never be enough to cause a crash if the rest of the market fundementals were healthy. No, this would be a disaster for the Republicans.

I share your pessimism about the markets, by the way, and I hope we're wrong. But I really doubt that anything will happen until after the election.

[Joe for Clark]

44. It should be a disaster for the republicans -really should.

The thing that gets to me - is those a-holes ability to "scream" in unison.

They will.

And it is scary - sell-offs are scary. And they use fear pretty effectively.

I think the important thing is an ability for dems to counter quickly and also in unison.

I do hope this happens on Nov 8 and not next week, god knows I really do.

Joe

[elehhhhna]

34. The DOWs being propped up by OUR Iraq Reconstruction Funds,

which have been placed in the stock market.

Use "the google". It's all there.

[jpak]

37. But I like it when my exuberance is irrational

:(

[Jed Dilligan]

42. Interesting

I don't have a penny in the market but I used to work for a rich guy and watch his trades. He lost a lot of money in short positions because he was anticipating the dot-com bust starting in '99.

[IM paranoid]

45. Las Vegas is more fun anyway, and has hookers!

The whole market is fixed anyway, just go and bet black at the Roulette wheel.

[catzies]

82. Now that's funny.

I've long called Wall Street "The Casino." And the House always wins.

Welcome to DU. :hi:

[trekbiker]

50. whats the spec short sale ratio at?

I'm sitting on the sidelines with about 70% of investment funds in mm right now. I'll take 5% and enjoy my popcorn. I'm not a technical guy (chartist). its seems somewhat voodoo to me but I dont totally discount it either. technical and fundamental analysis are certainly a part of the big imperfect picture. One thing for sure, the markets dont like uncertainty and change and I'm thinking there could be some big correction swings coming up in the next month or so, before and after the election. This years been hard on my nerves so I'm sitting this one out. The herd is nervous and ready to stampede.. but I've been wrong many times before..

oh yea... to the poster who thinks this stuff is boring?? I'll tell you, the casinos got nothing on the market when it comes to excitement.. casino gambling is a suckers game.. the market is all about fear and greed, mass phsychology, politics and world events.. (and underhanded thievery too unfortunately..) but it sure is a hell of a game.

[Joe for Clark]

52. You want my advice ?

You are in a good spot. Just wait.

The down leg will be sharp - watch. When tick starts screaming down just buy in slow.
I see you are a trader - nothing you don't know. I wouldn't try and trade the down leg if I were you. Especially if its sharp - cause it is gonna whip.

It has been a tough year, I agree. Strange charts. By the way - I think the purest techs will not be in on the leg down. They will miss it. I think it will be too fast.

It is fun, I agree.

Joe

[trekbiker]

55. I'll be watching for a correction.

if its over 5% down move I'll be sorely tempted to jump in and average down on a few companies i like.

the last few years I've been getting more and more interested in the Canadian income trust market. It is really expanding (beyond nat resources). I much prefer the income trust structure to the corporate structure. The interesting thing is how the rich dividends (paid monthly, not quarterly) have cooled down my trading impulses. Watching that cash roll in every month seems to satisfy a lot of my desire for market action. For the first time in 20+ years of this I've actually become an "invester" and hold for the long term. but I'll still trade with a certain % of funds when good opportunity presents itself.

the Canadian income trust market isnt for everyone. check out Roger Conrads site if your interested. I've been very happy with him.
www.canadianedge.com

[Joe for Clark]

56. Good Luck to you.

Joe

[MazeRat7]

58. Yup.. I'm holdin' nothing but long puts at this point... agree. (n/t)

[TrogL]

59. Odd, nothing about this in the Stock Watch thread

[mmonk]

62. I tend to look at stocks that people pull out of

for dumb reasons creating an undervalued situation, so I don't follow the crowd. For example, I bought a stock today that had fallen 25% because the estimate missed target by only 1 cent. So I'm pretty much contrarian in approach anyway.

[Brundle_Fly]

63. If we listened to Fox News

we'd be staying in for it to hit 15,000 by Christmas, that was my hint to sell.

[Phrogman]

64. If one needs to get ones stock market tips from a website like DU....

Than I suggest one might should reconsider having their money in the stock market.

[philly_bob]

65. Agreed -- but why is everybody shouting?

I tend to agree with Joe for Clark that the current stock market has a high risk of falling sharply. I even have money on that outcome -- I too am "short" or "long puts."

But I don't get the hostility in this thread...

Perhaps it's a reaction to some of the jargon. If you don't get the jargon, I recommend checking out the DU's daily STOCK MARKET WATCH and reading it every day for a while.
Joe for Clark's sentiment is quite in line with the views of many of the posters on the STOCK MARKET WATCH.

I think Joe's warning was well-intentioned. Personally, although Friday was brutal, I'm not sure it marks the beginning of a collapse next week. Rich Republicans and the Bush Treasury have so much at stake they'll simply buy up the 30 stocks of the Dow and prop up the price. I'm more worried about a post-election collapse. My hunch is that the recent market rise (and the drop in gold prices) were expensive pre-election maneuvers by Those Who Must Not Be Named.

[zippy890]

83. 'Post-election collapse' question

your scenario sounds plausible - but what do you mean by

"the recent market rise (and the drop in gold prices) were expensive pre-election maneuvers by Those Who Must Not Be Named."

thanks!

[philly_bob]

85. Poetic License and Possible Market Manipulation

Those Who Must Not Be Named was a joke. A reference to Ryder Haggard's "She Who Must Be Obeyed" and Harry Potter's nemesis Voldemort.

Behind the Halloween joke is the suspicion by many that not only lower oil prices, but also stock market index levels (artifically moved higher) and the price of gold (artificially moved lower) are part of an attempt by some people to make the economy look good when it's very, very shaky.

It's expensive to manipulate these things, but the Rich have done rather well lately. If "Those Who Must Not Be Named" <WINK> are facing a choice of exile in Paraguay or a war crimes trial at the Hague, well, buying the top 30 stocks (which make up the Dow) or selling Treasury's stocks of gold at a reduced profit, or upping oil production levels, may seem rather cheap. Just a cost of doing business.

There's lots of people who believe these things, in varying degrees. It is, of course, a conspiracy theory. But as we've learned, there really ARE conspiracies. (Luckily most of the time they don't work.) It is not something I'm compiling a dossier on. But to some degree I'm acting AS IF it were true.

One economists' board I monitor has the following advice for those facing an economic recession or collapse. "Cash is King."

[Occulus]

67. Why do you gamble with your cash?

I mean, casinos are one thing. At least they're honest- they readily admit that the odds are against you, the player.

But really- why do you participate in such a damaging game? Don't you realize that this market, in a rational world, would not exist at all?

I have an idea: let's CLOSE the stock market. Shut down the DOW, NASDAQ, and any and all other public traders within US borders.

Replace them with... nothing.

Period.

How's that?

[DemocratSinceBirth]

77. How Would Companies Get Capital?

eom

[KAZ]

68. We've basically broke the surface from 6 years ago...

..on one index, based mostly on GM and IBM. I don't see the Bull that you're seeing, but I do agree on the short-term short. The drop will be sold on Cavuto as "Does the Market Not Like the Thought of Dems Taking Power". Look for it on a Faux scroll near you.

[upi402]

69. I'm 100% international, not USA

But I can still get some pension erosion.

[philly_bob]

86. Smart move. /nt

[moondust]

70. Maybe.

Perhaps there are some evil forces behind the big rise that are political in nature and the fall won't come until after Nov. 7.

Why wasn't there a ton of stop orders just under 12,000 making it difficult to break through? (Or was there?) Smells kinda fishy.

[Buttercup McToots]

80. Bingo

http://www.billcara.com/archives/2006/10/a_soft_usd_getting_softer_fri.html#more

snip>

October 27, 2006
A soft $USD getting softer, Fri., Oct. 27, 2006, 2:57 PM
Alan Greenspan, former head of the U.S. Federal Reserve, once held the job of protecting the $USD. Not once do I recall him trashing it. Until now.

The $USD is now falling fast against the Yen.

Here is an explanation:


--------------------------------------------------------------------------------

Swiss Central Bank Lifts Yen, Pares Dollar Holdings (Update1)
By Simon Kennedy Oct. 27 (Bloomberg) –

The Swiss central bank raised its holdings of yen and pared investments in dollars last quarter after the yen fell to its weakest since October 1998 compared with the currencies of Japan's biggest trading partners.

The Swiss National Bank boosted its yen investments by 68 percent to 208.3 billion yen ($1.8 billion) from the end of June, according to figures posted on its Web site today. The bank's dollar holdings fell to $12 billion from $12.4 billion. SNB spokesman Werner Abegg declined to comment on the report.

Follow the link for more...

[StellaBlue]

72. What are you talking about?

Some of us here aren't high enough up the socioeconomic food chain for this to be remotely relevant to us. I will probably never have a "portfolio", and, to be honest, don't want one. The stock market is a big, legal casino, a place where the already rich make money off other people's work. Most of the corporations in the world are immoral and perpetuating the economic system that fucks over people like me. Bah.

[philly_bob]

87. Staying out of the market is reasonable -- except check your mortgage

The discussion is bringing out two kinds of DUers.

The nerdy, hobbyist types like me who follow these things the way other people watch Fantasy Football and World of Warcraft.

And the Bah-ers like yourself, who correctly call it a legal casino or Ponzi scheme.

Your strategy of staying out of the casino is a good one, except some types of mortgages put you in the casino without telling you.

I'm speaking of those exotic mortgages that lead to escalating payments. Those are poison, everybody!

[Blue_In_AK]

89. We aren't all bad...

I was seriously broke all my life, but when my mother passed away in 1999, she left each of us kids a small inheritance. My retired husband of three years also has 401(k) money from his many years as a marine engineer. Neither one of us is what you would consider rich, but we feel like it's better to have someone manage our money who knows what he's doing rather than just sticking it in a savings account earning next-to-no interest. Just because someone gets lucky and has some money to invest doesn't make them evil.

I don't want to be stuck at this keyboard still typing legal transcriptions when I'm 80 years old.

[Kingofalldems]

75. How about the slow growth figures that came out

Thursday? Home values are tumbling down. And the dollar is sinking. Doesn't that affect the market?

[DemocratSinceBirth]

78. Yes...

But a sinking dollar is not necessarily a bad thing. It make our export industry more attractive...

[w4rma]

88. Maybe true for the short term

I would argue that it would be better to make our local businesses more attractive through tariffs, so that they can sell to Americans who have traditionally had a higher purchasing ability compared to the rest of the world, rather than by reducing our overseas purchasing power.