Equities On Verge Of Very Violent Rally

[sam76]

DJ MARKET TALK: Equities On Verge Of Very Violent Rally -Broker


0453 GMT [Dow Jones] World equity markets are "on the verge of a very violent and savage short-term bear market rally," according to Goldman Sachs JBWere. Says with DJIA down 20% in 17 days, it's one of the most extreme short-term oversold positions in 20-50 years. Cites American Association of Individual Investors data showing 70.27% of investors were bearish as of Thursday, highest reading since index creation in 1987. S&P/ASX 200 up 0.8% at 3169.7. (DWR)


20% in 17 days does seem a bit over done.

 

[prana]

I think so too, a bear market rally.

 

[Beenjammin]

Excellent! Anyone want to hypothesize on which sectors are likely to be the big movers?

 

[Stormin_Norman]

ill believe it when i see it.

 

[prana]

XEJ & XMJ

 

[IFocus]

Yes buy now I love this shredding of CNBC advice



http://leavittbrothers.com/stocks-o...g-videos/2009/03/the-daily-show-rips-cnbc.cfm

 

[GumbyLearner]

Yes buy now I love this shredding of CNBC advice



http://leavittbrothers.com/stocks-o...g-videos/2009/03/the-daily-show-rips-cnbc.cfm

Fantastic link IFocus.

ROFLMAOAPM! :blaah:

The most hilarious link provided to date.

Cheers again mate.

 

[Gundini]

Good!

I'm gunna dust off those credit cards to the max, and gear up on CFD's!

PS: Don't you kiddies try this at home.... It's only for professional idiots

 

[Stormin_Norman]

Yes buy now I love this shredding of CNBC advice



http://leavittbrothers.com/stocks-o...g-videos/2009/03/the-daily-show-rips-cnbc.cfm

i love stewart and colbert.

 

[M34N]

Yes buy now I love this shredding of CNBC advice



http://leavittbrothers.com/stocks-o...g-videos/2009/03/the-daily-show-rips-cnbc.cfm

This is so very true, just take one look at the front page of CNBC right now and you will see conflicting news headlines everywhere. It happens daily. If it wasn't for their free live quotes I would hardly ever have a use for them.

Look at this snapshot I took just now and circled all the conflicting headlines... I mean come on! "No incentives to buy stocks" and then the headline CLEARLY below that saying to "put 80% cash in stocks!" And just to confuse everyone more, "Picking a market bottom: why the pros are all wrong". :kiffer: :bong:

 

[prana]

A violent 50% rally (of the residual) after a 70% fall is still a bad investment - bear market rally. Definitely for crazies...

... or idiots

 

[sinner]

Several analysts agree

http://www.safehaven.com/article-12782.htm - Maund
http://www.gold-eagle.com/gold_digest_08/hamilton030609.html - Hamilton
http://www.safehaven.com/article-12783.htm - Lerner

Also, the only two times the DJIA has ever hit 12 year low before was in April 8, 1932, and December 6, 1974.

From http://www.safehaven.com/article-12779.htm
By Prieur du Plessis

According to Thomas Lee, US Equity Strategist at JPMorgan, retracing 12-year lows for the Dow is an incredibly rare event (see chart below). "Besides the retest of 1997 lows seen on Monday, this has only happened two other times, on April 8, 1932, and December 6, 1974," said Lee (via The Big Picture). It is noteworthy that the 12-year low in 1932 was three months before the end of the bear market and the one in 1974 was exactly the low for that bear market.

Barry Ritholtz added: "Hitting a 12-year low is by no means proof the bear market is over. And, two prior examples do not make a sufficient sample. [But] the oversold nature of the market, as well as the virtual straight down drop that brought us here, does present a real possibility of a strong market rally."

The precipitous stock market declines are reflected in the results of this week's survey of investor sentiment by the American Association of Individual Investors (AAII), courtesy of Bespoke. Investors are now at their most bearish levels since the start of the survey in 1987 with 70.27% of respondents currently in the bearish camp - a necessary prerequisite for a major market low

From the Lerner article

 

[prana]

well my reasoning is a lot simpler - selling climax.

1. People are coming to me and saying, dude did you see the market collapse yesterday.
2. OMG the Dow tanked again
3. You're crazy to consider buying equities

Together with the crazy amounts of liquidity injection, and the develeraging, and the contango, I'm positioned for oil and nickel. XAO also hitting 92 projected line. Of course, all it takes is another bank Chapter 11 to break it all. GM, AIG? Like was said, crazy punters only.

Next in my view, food and grains! But I see it being 2-5 years for me.

 

[sinner]

Next in my view, food and grains! But I see it being 2-5 years for me.

I also like food and grains (and a few other soft commods) for the long term. Good luck!

 

[nomore4s]

If we do finally break to the upside it will be pretty violent imo, alot of people will jump on thinking we have hit the bottom.

Picking when we will see this rally will be the trick.

 

[gfresh]

I would have thought before we can have a large multi-week rally, some sort of 'solution' has to be presented for the large US financials, or US employment figures would have to say they had only laid off "only 300k", rather than their "600k" recently - showing a possible slowing of the recession.. At the moment, doesn't seem to be much of that going on.

Pull up JPM for example.. something is going on there.

But if we do have a rally, I can't wait for the media headlines to explain all problems have gone away

 

[sinner]

PS I should mention I am not long any indices right now, but almost my entire long portfolio has just moved onto the ASX200 or 300 in the recent rebalancing. A couple of them were big surprises!

Bring on the survivorship bias.

 

[prana]

well all this dilution and record liquidity injection has one absolutely sure end point of dislocation - primary industry ! It's even more compelling than ever. More printing, more bank failures, more zombie -ve asset banks, more it looks right for me. Disclaimer - these are my thoughts only, no advice given here. I am personally LONG commodities/energy.

 

[sam76]

lol

good timing on this thread, hey?

question is , is it sustainable?

 

[prana]

heheh but it was financials that bounced - financials 1 prana 0 :