The fed is out of Bismuth Subsalicylate, the dollar is already in the
toilet.

I predict going through 11,000 soon, within two weeks for sure.

My screen is solid red for the frsit time. It is oil stock heavy.

Hasn't been this low since September 2006!!
This is not good.

"The Conference Board Consumer Confidence Index, which had declined in
May, declined even further in June. The Index now stands at 50.4
(1985=100), down from 58.1 in May. The Present Situation Index
decreased to 64.5 from 74.2. The Expectations Index declined to 41.0
from 47.3 in May."

They say a 5 point drop is "very troublesome"...

It was lower than this the day after MLK Jr day, remember the DOW
opened down 500 from its closing price, Fed did a surprise cut of .75.
It broke 11,700 and then bounced hard. Since then it has tried to
break 11,700 again months later and couldnt. Until I see us in the
11,600s for more than a day I dont buy it. My god we hit 11,600 in
1998. You think that this market is worth less than it was then? You
think that p/e multiples across the board are supposed to stay this
low? This is obviously rational marketmaking right? Or maybe its the
market being irrational, and we just have to wait it out... cause over
the long term markets go up. Why?

What is the market? It is a index of companies that have one basic
goal built into their DNA, make profit and make more profit then last
year. When some morons(Investment Banks) try to make money too quickly
with fraud, this happens. But in the long run even they will make more
money down the road. Bear markets are just corrections in the
permanent Bull Market. Fact is that the market will always have an
upward trend, humans just cant stay rational. They buy too much when
its going well, causing bubbles, caused by the emotional state of
greed. Then we have corrections or your bear markets which are a
combination of fear, and correcting the prices for the unrealistic run
up during the greedy times. But the longer the time period, the
smoother the trend looks, cause you cant see all the greed and fear
moves as much. If you want to understand the market, you have to
understand who creates it, humans. So emotional states are as
important to the market as these random economic data points that are
backwards looking. Good luck to all. But I am not going to try and
time the market anymore...
RGA

Excellent analysis, I agree except. The kind(s) of "humans" that
control the investment banks are congenitally greedy and corrupt. They
can permanently destroy the economy.

Certainly the congenitally incompetent people of Zimbabwe have
permanently destroyed the Rhodesian economy. I look for a long decline
like Rome. It will be sawtoothed just like it was on the climb but
America as we knew it is rotting.

.

It depends on where you're standing.

"My god we hit 11,600 in
1998. You think that this market is worth less than it was then? You
think that p/e multiples across the board are supposed to stay this
low? This is obviously rational marketmaking right? Or maybe its the
market being irrational, and we just have to wait it out... cause
over
the long term markets go up."

I applaud this comment.  Very good balance with the big picture view
here.  Too many people around here get caught up on the day to day
trading.  They start to say crazy things like "DOW to be 10,500 next
week"!  Already, at this price, the DOW is flat for almost a decade
(Jan 2000 we were 11,700 - 8 years).

And the dollar is worth less than it was in 2000.
So what does that put the value of the market today?

Not sure that you can compare the US to Zimbabwe though. Obviously
there is corruption in both countries, but the US is essentially run
by profit-hungry big business. Zimbabwe is run by a single inept,
power-hungry politician. The former wants to prosper financially
(which will in turn allow consumers to prosper too), the latter is
only concerned with self-preservation at the expense of all else. Very
different goals and very different outcomes.

When has capitalism ever permanently collapsed? There have been
downtrends, but never terminal ones.

Damn didnt even think of that, what is the USD worth compared to 2000
USD? We might be trading at 1996 levels with currency drop factored
in... The market value of the companies most hurt by the crisis
continue to drop, they become a smaller % of the overall stock market.
Thus if they drop more it effects the market less. Meanwhile the
multinational monsters like IBM, HP, etc are invading every world
market, they are becoming a bigger % of the market cap of the markets.
So as they grow it has an accelerated effect on the overall market. We
are bottoming out... the bad companies are smaller now then in Jan
when we hit 11,600s the day the fed cut 75 basis points. The strong
companies have bigger market caps. The market is re-weighting it self
like after every single crash. As we go forward the stronger and now
majority of the Market cap companies will grow with the world economy
not just the US.

btw Rome/US might be burning, but everyone forgets the biggest detail
in this forest...

The DOW is NOT American anymore, The biggest 100 companies on the Dow,
ar any of them just domestic? Any one of them have 0% overseas sales?
They dont care about the US, they care about profit, thus they are all
over the world, dont tell me just cause we are in an American decline
the markets have to decline! How insular that thinking is, how
arrogant are you to assume that a housing crisis in the US will
somehow cripple the world in todays global economy. In the past it did
cause we had most of the money, the dollar was stronger, thus we were
a bigger % of global consumption. We are not as important as we once
were, when I retire in 20 years I will assume that Indian + China will
be bigger than the US economy. That doesnt even consider the rest of
the economys like Europe. So in 20 years we will be less than a third
of the world economy if that... Europe w/ Russia will be bigger, Asia
w/ Japan and Aust/NZ (excluding India and China) will be bigger, Latin
America + Africa and the Middle East will be close... honestly we cant
keep up with the globe and our companies know this, they have
diversified even if the average american refuses too.

As long as there is global growth the US stock markets will along side
it, full of international monsters that will eat up the third world
like western Europe did during colonial times. Chavez might think he
is big sh*t, but if you endanger the biggest companies in world, you
hurt their bottom lines... oh man. A number of them are bigger than
the Venz's whole economy. They will move away, leave your economy to
decline (ie Cuba), you might become a better humanitary state, but you
really think IBM cares about your standard of living unless you use it
to consume? The NYSE is an international held public company now, the
global markets will begin to merge and this is the dark before that
dawn.

Wall street screwed the world, as a result the world is going to want
market integration so that Europe can prosecute the firms in NYC if
the US doesnt. Companies will diversify and global growth will
continue. Publicly traded companies are organisms that grow. If the
environment changes they suffer in the short term, but they adapt, and
after the resolution of this environmental(in terms of the financial/
housing crisis) occurs, you better believe that these organisms will
just continue to grow throughout the world. Go ahead and short, you
could make money in the short term. But you better pick stocks and not
the market as a whole, you might never seen the mid 11000s again.

If you dont know the past, you are doomed to make the same mistakes,
again and again. Just buy slowly during the panics, and sell slowly
during the bubbles, but never think that a housing collapse and
financial market collapse will kill the multinational companies. The
shorts are getting greedy, they have made a killing and now we
developing a reverse bubble... when are they going to take their
profits, when are they going to panic, or let me guess the market is
going to 10 bucks... gotta cover sometime!

RGA

The Dow is not American? Well, that's news to me... And as for
relative historic values of markets, I'm not sure how this information
is useful- certainly, I would think, not to indicate that a market is
oversold...?

http://www.resourceinvestor.com/pebble.asp?relid=43782

Hey RGA: The dollar index was over 100 in
the year 2000. Today the index is at 73.2.
So, to find out what the value of the Dow is
against the current dollar index take todays
price 11825 (or what ever it is) multiply by .732
(thats the %) and you get 8656. That's the dollars
worth of the dow compared to year 2000.

RGA,

I don't post very often, but I had to comment on what you wrote - I
COMPLETELY AGREE! - We are now a global economy and I think the market
is undervalued. Overseas investors will put their money here because
in the long-term they will make money.  This is just like every other
time the market was overheated and we shook out the problems and
started moving forward again.  I can't time the market, but I do know
that we will start to grow again.

MRS

"We are now a global economy"

?

The world was a "global" economy in the iron age and before.

September or October 2008 DJI Futures 10280 . it will go back to what
it was in 2004. correction of 4 or more??

please quit saying stupid stuff, 10280. It maybe possible but who
cares? it will be good time to invest then. Right now stay away from
buying on this market. it took years for this mess to pile up. It will
take time for it to go down. wait until next year or 2010. I feel bad
for the people who are about to retired. Credit Crunch is next.

Diarrhea time...LOL

So.... Look at some historical charts, this is very typical and can
go
on easily for another decade. Also to answer your question... YES I
think this market is worth less because all the companies that are
operating in this market are in a far riskier environment due the
financial crisis, housing market collapse, and current commodities
bubble and future shortages. I still think the low is between 2-5
years out. It will take at least that long for the financial system
to
figure out a way to function again, housing to start to stabilize,
and
for possible solutions to begin to be implemented to address the
energy and commodities shortages the world is facing. Once those
problems or at least 2/3 of them are addressed then the environment
will be conducive for broad growth and a new bull market can initiate.

2-5 years is what I'm thinking too.  This is going to be a very
painful time much like the 70's and 80's.  America is going to need to
change the way it does business or else.

LOL, what industries do you see expanding? The CEO of DOW, a non-
Amreican, was on Bloomberg today saying he is closing down U.S. plants
and moving them to the Middle East and Asia as fast as he can.

The current false economy is based on:
1. Welfare
2. Services
3. Retailing of imported products
4. Financial manipulation

Thats the whole point, DOW will increase prices and reduce costs, by
moving production to cheaper regions. Thus Dow will make more next
year than this year... If most of the large companies find ways to
improve their profitablity, their stock goes UP. You buy the stocks
that dropped with the market, but are profitable and continue to be
so. The devaluation of the dollar has already increased exports and
will continue to do so, thus companies will have higher demands for
their products. Maybe the market will drop to 11500, however the
stocks I am in are up since March when the dow was here last. So as
long as you choose the right stocks, the market dropping is a good
thing. You get good companies at a discount and when the market comes
back, guess what? Your stocks do as well! Commodity, fertilizer, even
Walmart have been performing well. These companies trade on the US
exchanges.  Fact is if any of us knew what was coming in the next week
or next couple months we would be millionaires already, I do
appreciate the opinions that are backed up with logic and fact whether
or not I disagree with the conclusion, so I hope the debate continues
for the benefit of us all. The biggest thing to remember is that if
someone figured out the whole market thing, they wouldnt tell anyone,
they would trade off their system and keep quiet so that it can
continue to be used. So we all might be near the answer, but none of
us know for sure...

RGA

"
The current false economy is based on:
1. Welfare
2. Services
3. Retailing of imported products
4. Financial manipulation
"

Oilwildcat said it very well

the DOW is actually worth somewhere in 5000-6000 'priced' in 1998 DOW
points (as the USD's value dropped by more than half, or we've seen a
doubling of the money supply PLUS since 1998).

We've been in a 10 year recession and nobody gets it!

wrong on using the Index.  the index only rates its relative value to
other currencies.  if all dropped at the same percentage rate, none
would have gained or lost anything on their indexes.

you need to look at commodity prices for that, gold, silver, food,
oil, wheat, etc. and average them, it's by more than half the USD has
dropped!