Wall Street's Best Day in Two Weeks

[mnhtnbb]

so says CNBC with four minutes left to the close of the session.

The DJIA is up 780 points with 3 minutes to close.


Hubby made a bet with me last night. He thinks we'll go below the low of Oct 10th--around 7800--before the end of the year. I think we've seen the low.

We were great fans of Louis Ruykeyser's Wall Street Week. We must have watched that show faithfully
for 15 years. I remember so many times when he would put up charts showing that just when everybody
was euphoric, the market would turn down, and when everybody thought the market had no where to go but lower, it would turn up. The contrarian view seemed to work consistently with peaks and valleys.

So, what do you think will be the next move? Have we seen the lows? Are you buying?

[HereSince1628]

1. Over 800 points as the bell sounds!!! What a ride!

[mnhtnbb]

2. DJIA settling out up 890.

[mnhtnbb]

3. Dow up almost 11% to close above 9000.

[readmoreoften]

4. This is just irrational exuberance. The market ignored the bad news that came out today.

I think we might even see 10,000 again on irrational exuberance before another dead drop to a lower number.

[high density]

5. I'm buying periodically

Though to be honest, increasing my emergency cash reserves (i.e. job loss fund) gets more focus these days than my equity index funds.

[MUAD_DIB]

6. I don't believe the low ride is over yet.

There are too many negative variables yet to be dealt with.

But today there are ponies for everyone!

[HereSince1628]

9. There is a LOT of tax-loss selling that's going to happen

between now and the new year.

[Mike 03]

7. I tend to agree with your husband that the volatility will continue

into early 2009, with more downward selling as hedge funds continue to liquedate in force selling and as investors sporadically panic to bad news. That is one reason I think gold has been performing uncharacteristically of late--we are witnessing to some extent not only forced selling but the destruction of actual wealth.

But having said that, I'm nibbling on some bargains right now myself. The markets usually prematurely signal the end of a recession, so they tend to react several months before Main Street sees notable improvement.

But it's a time to be very cautious, especially for anyone who has a short time investment horizon or depends on fixed assets for monthly income.



Also, I don't think earnings reports or employment statistics will look good, and lately investors have reacted very negatively to these things; in some cases investors even disregard the good news.

The dead giveaway that hedge funds are force-selling is that the sale of equities is so broad-based and essentially indescriminate. This is cash raising, IMO, to meet redemptions.

[seemslikeadream]

8. around 7800--

by Feb

[lpbk2713]

10. One step forward and three steps back.

That's how it's been performimg for some time now.



Much to my pain and chagrin. :eyes:

[Feron]

11. A money guy on CNN said a few weeks ago..

that we will see gains and losses of hundreds of points until the bottom is found.

So while today was a good day, the rollercoaster ride isn't over yet. There will likely be a selloff tomorrow.

Just for shits and giggles, I found this DOW history chart. It's amazing how much history has been made in the past month.

[Mike 03]

13. It's true. These wild 600 point (or more) swings up and down within the course of the same

day are unlike anything I've ever seen. This might sound tinfoil hat, but I feel like there is some kind of market manipulation going on here. If you could play these markets right and were leveraged enough, you could make millions in a single day. Something is very screwy.

And I've noticed that the market futures are basically worthless for predicting what a market might or might not do on any given open, and surely by the end of the day everything is totally unpredictable.

This is unexplored territory.

[mnhtnbb]

16. Nice chart. Thanks for posting.

[Mike 03]

12. If you are/were to nibble right now, what would you be looking at?

I'm 80% cash, but slowly moving overweight into health care/pharma, hard currencies (because I don't think the U.S. dollar strength will last), gold funds. Avoiding, for the time being: commodities, except possibly agriculture, retail, durable goods, even consumer staples (which I know is viewed by most as a safe harbor). Very few sectors seem like safe place to hide now, not even Asian/Eastern Europe or EM. It really is a tricky time.

But by the same token, there are some remarkable deals. I'm looking for companies with low P/Es, high cash, strategic flexibility and large market capitalization. (Oh, and low debt)

I'm also trying to learn about convertibles, which I know little about.

[mnhtnbb]

15. Dividend payers. Low P/E's, high cash. I was about 80% cash--but

I've been wading back in.

I also like alternative energy--solar, wind--but it might take a while for those stocks to come
back with the price of oil so low. On the other hand, the price of oil will probably start back
up after the election.

[Mike 03]

17. Thanks those are helpful observations

Sounds like were are basically on a similar track.

I'm very skeptical that commodities will continue on this downturn, but on the other hand a lot of economists a lot smarter than I am believe they will. I'm torn on whether or not to get back into industrials.

Obama would be great for infrastructure plays! Heavy machinery, construction, etc...

I'm glad you were heavy into cash and cash equivalents. Sounds like you probably made it through this downturn relatively unscathed. That's awesome. Hopefully a lot of people were paying attention and were not fooled by some of the "noise" urging people to get more heavily into equities over the past three years.

[mnhtnbb]

18. I wouldn't call it unscathed. I hold a biotech company that took a huge hit.

I didn't dump a natural resources fund that is way off its high. But it could have been a lot worse.

[Mike 03]

19. Well, we didn't do so well.

Even though I'm only 20% cash, believe me I lost at least eighty thousand (probably more) over the last month.

I didn't even open my last two statements.

[Mike 03]

14. Kick, just because I like the OP and am curious what people have to say. NT