Is this market gone crazy or is it just me?
2007-11-09 12:40:21 · 8 answers · asked by Bill Spry 4 in Business & Finance ➔ Investing
The market isn't going crazy at all really. If you look at the trading band of the highs and lows of the S&P during the bull market that started in 2003 - 2006, you'll see in March, August and October of this year it started getting way too far ahead of the top band. It's been obvious it was going to correct for some reason, which the profit takers and bears ("The Shorts") wait for. The MACD was normally running under 20, in 2007 it's been up over 20 and only now is it back under 20. Typically you can use the 50DMA which has just been broken, but that's less relevant because that has been inflated this year as well. The high range is 1480 and the low range is 1380, if we stabilize in that range and start resuming the upward trend again we should do fine.
Even bearish analysts now are expecting a bounce because the selling has been overdone. Everyone agrees we're in high volatility mode right now, but over the course of a few months I expect we'll start ramping again. Nothing fundamentally has changed really. There was some over exhuberance from Cisco prior and Financials coming out with unforecasted writedowns, but they are only worthy of the correction we're in right now. Next year is a presidential election year, typically positive, global growth fundamentals are still in tact.
Anything else are just boatrockers, but these could capsize the above into recession: Oil to 150 range vs 100 range; turbulence with Iran breaking out into something bad; 2 to 3 more credit crunch significant surprises; US$ manipulation by Chinese......
2007-11-09 14:29:30 · answer #1 · answered by Supra1Q 4 · 0⤊ 0⤋
It's just you. And all the other people like you. Who think that what happens in a given day, week, or month is of some importance. It doesn't matter! Unless "hope" comes to an end, the broader market will ALWAYS climb at about 10-12% a year (on average) over the long term. Buy quality stocks, and when the market dips, BUY MORE.
Think about it, if you were buying cans of food to live on in retirement, when the price dropped would you sell? Or would you add to your store at bargain prices?
I consider Verizon (up 40% over the last 2 years), GE (up 20% over the last 2 years) and AT&T (up 10% over the last 2 years) to be "great companies" with great earnings, plus they all pay terrific dividends. What exactly do you want?
2007-11-09 12:53:49 · answer #2 · answered by Anonymous · 1⤊ 1⤋
Yes. This was predicted, and is due to the 'credit crunch' in the mortgage-loan business. Too much real estate was transacted at sub-prime rates, ie, 5.5% for five years, then the rate on the house you bought jumps to prime: 7.75% and you can't make the payments. The banks, mortgagors, S&Ls all are scrambling to stay afloat. When and if these businesses start going into bankruptcy (some have; Citibank was in the news today) we could lose up to 10% more off the S&P. I've avoided selling hoping Bernanke would ride to the rescue with another 1/4% drop. Can't advise you, beyond this.
2007-11-09 13:03:45 · answer #3 · answered by te144 7 · 1⤊ 1⤋
Great companies and great earnings are interesting, but how does the chart look? I personally don't care how great the company is or what its earnings are. The question is always whether or not I can make a profit on their STOCK. I'm not buying the company, just the stock. And the chart will tell me how I should move.
2007-11-09 18:23:03 · answer #4 · answered by ZORCH 6 · 1⤊ 1⤋
now or Near future is a good time to buy the bank stock as they are getting a beating and buy them as they are getting beaten and hold them for few years and you would get good returns. If you cannot hold for 3/5 years, it may not be a good time now unless you have some good professional advisers who can pick gems in a down market.
Some stocks symbols from this sector C, WM, BOA, Freddie and Fannie mac/K
2007-11-09 12:56:07 · answer #5 · answered by Advisor 1 · 0⤊ 0⤋
Hey Carol P., learn how to spell and use proper English.
You must be a youngster, this has happened before, it will happen again. If you can't stand the heat get out of the kitchen. That or learn how to trade options.
2007-11-10 01:37:39 · answer #6 · answered by Barney 6 · 0⤊ 0⤋
They have all dropped. If your scared get out now. They well drop more it may be a while before they go up again.
with gas the way it is. people well not travel & everything well and is going to go up. spending well slow. But things always trun around sooner or later. If you can hold do so .
2007-11-09 12:52:31 · answer #7 · answered by CAROL P 1 · 0⤊ 1⤋
Risk/Return, if you can't afford to loose it, do a CD!
2007-11-09 12:45:45 · answer #8 · answered by Anonymous · 0⤊ 1⤋