Recovery or Dead Cat Bounce?

[Pythagerous]

Largesse, with the market always looking ahead into the future, the question is not always what has happened in the last week, but what are people anticipating in the future.

If the market was dictated by what happened over the last week, we would all own billions.

 

[sinner]

this heady optimism is worrying.
what has changed in the last week? NOTHING


see you all at 2500

Man you gotta be watching CNBC and Bloomberg these last few nights during the NYSE.

Propaganda coming thick and fast.

Bernanke even traded his crystal ball in on 1y warranty for one that works, and now thinks we will be sweet before NYE.

EDIT:
PS heard a great statistic last night. In the US it now takes 5USD of debt to create 1USD of GDP. The most expensive ever.

 

[Glen48]

http://mises.org/multimedia/mp3/ASC2009/ASC09_Schiff.mp3
Peter Schiff.

 

[tommymac]

EDIT:
PS heard a great statistic last night. In the US it now takes 5USD of debt to create 1USD of GDP. The most expensive ever.

If that's true we're in worse trouble than I thought.

 

[goldchopper]

Man you gotta be watching CNBC and Bloomberg these last few nights during the NYSE.

Propaganda coming thick and fast.

Bernanke even traded his crystal ball in on 1y warranty for one that works, and now thinks we will be sweet before NYE.

EDIT:
PS heard a great statistic last night. In the US it now takes 5USD of debt to create 1USD of GDP. The most expensive ever.

We all have a long way to go here. Its the eternal optimism inside driving the curent rally. How can Citi be nearly bankrupt, then turn a profit. Its a nice rally because not seen one for a while, but now is the chance to buy oil and gold still. Financials may look cheap, still months and quarters of unwinding here. Centrals and govt can only do so much.

 

[Largesse]

Largesse, with the market always looking ahead into the future, the question is not always what has happened in the last week, but what are people anticipating in the future.

If the market was dictated by what happened over the last week, we would all own billions.

Pythagoras

 

[MRC & Co]

There more I think about it, the more I think that this may not neccissarily be a dead cat bounce.

After reading this thread, it would appear that 75% of the people that have commented, view this as a DCB as opposed to a recovery. If the majority of people are expecting this to be a dead cat bounce, then why is the market continuing to move upwards sharply.

The question is, who is forcing the market up. Surely it is not your average mum and dad investor, as they are too scared to invest. If it is simply traders forcing the market up, they are just shooting themselves in the foot, as it appears the majority of people arn't buying it. The more I think of it, the more I have a sneaking suspicion that this is not just a rally, established by people trying to take a quick profit.

I like the way you think.

But watch how sentiment changes though, is the media already talking about a potential low (bet at least they aren't saying, stay clear, "there is no end in sight" anymore)...........

 

[Largesse]

Man you gotta be watching CNBC and Bloomberg these last few nights during the NYSE.

Propaganda coming thick and fast.

Bernanke even traded his crystal ball in on 1y warranty for one that works, and now thinks we will be sweet before NYE.

EDIT:
PS heard a great statistic last night. In the US it now takes 5USD of debt to create 1USD of GDP. The most expensive ever.

I'm waiting for Cramer to come out with another 'BUY! BUY! BUY!/ THE REBOUND IS HERE' call.
And when he does, i will max my account shorting the **** out of everything i can get my hands on (except gold)

 

[>Apocalypto<]

There more I think about it, the more I think that this may not neccissarily be a dead cat bounce.

After reading this thread, it would appear that 75% of the people that have commented, view this as a DCB as opposed to a recovery. If the majority of people are expecting this to be a dead cat bounce, then why is the market continuing to move upwards sharply.

I would imagine that those who have panicked previously and sold, are too scared to put there toe back in the water just yet, and with the majority thinking that it is just a dead cat bounce, there wouldnt be too many others rushing to get in their.

The question is, who is forcing the market up. Surely it is not your average mum and dad investor, as they are too scared to invest. If it is simply traders forcing the market up, they are just shooting themselves in the foot, as it appears the majority of people arn't buying it. The more I think of it, the more I have a sneaking suspicion that this is not just a rally, established by people trying to take a quick profit.

yep I am thinking on the same terms, but in no way 100% on anything yet.

Even me the great USD bull is now looking to change my trading account to EURO as base. .... seriously I am going to change one and fund it slowly in euro, while I move out of USD.

Or another reason Pythagerous, it's the mass of shorts popping!

interesting times coming....

 

[Taltan]

Interesting times indeed. In 1929 the Dow dropped from 51% before rising 48%. It than proceeded to drop another 86% for a total drop of 89% (381 to 42).

Of course times have changed and I mention the above only as a warning. I think this could be a recovery and I don't have a great answer for Pythagerous.
The main problem is that it does not seem enough toxic debt has been bought to account and when the next big fish drops or needs govt assistance market sentiment will change, surely not everyone insured with AIG.

 

[Uncle Festivus]

I think the 'rally' has just about run it's course, mainly due to a huge swath of bad US fundamentals about to land which will likely set off stage 2 of the bear market to new lows.

The sub prime market is entering a new wave of resets from April onwards into 2010.

The new home construction data is a statistical anomaly that most likely will be revised down again, but in any event it will only worsen the current glut of housing that nobody wants or can afford anyway.

Unemployment still parabolic negative.

Foreign holders of US debt net sellers now.

Options expiry week, short covering, all over by Friday?

The flight out of quality has begun, the markets are behind the curve this time, sell into the rally?

Sucking the last bit of capital out of the bulls left with cash.

Then, Australia will have a real recession instead of this Rudd recession.

Other than that I'm quit bullish

 

[CanOz]

I think the 'rally' has just about run it's course, mainly due to a huge swath of bad US fundamentals about to land which will likely set off stage 2 of the bear market to new lows.

The sub prime market is entering a new wave of resets from April onwards into 2010.

The new home construction data is a statistical anomaly that most likely will be revised down again, but in any event it will only worsen the current glut of housing that nobody wants or can afford anyway.

Unemployment still parabolic negative.

Foreign holders of US debt net sellers now.

Options expiry week, short covering, all over by Friday?

The flight out of quality has begun, the markets are behind the curve this time, sell into the rally?

Sucking the last bit of capital out of the bulls left with cash.

Then, Australia will have a real recession instead of this Rudd recession.

Other than that I'm quit bullish

Hourly ES is approaching oversold, we could have a pullback tonight....is the XJO leading the S&P??? LOL! Seems that way.

CanOz

 

[doctorj]

Credit Suisse has released a note on bear market rallys today. Apparently the average rally during the 1929-1933 bear market was 30%. So far, the average rally in this bear market is 14%. We're up about 12% so far this time, so we may be due some larger bounces either this time or in the near future.

 

[Aussiejeff]

Credit Suisse has released a note on bear market rallys today. Apparently the average rally during the 1929-1933 bear market was 30%. So far, the average rally in this bear market is 14%. We're up about 12% so far this time, so we may be due some larger bounces either this time or in the near future.

A bigger Dead Cat Bounce is not hard to forecast, with BO finally tossing a Trillion to the hungry alleycats overnight. MEE-OOOWWWW!

The question is, what happens when those ravenous pussies come back, scratched and bleeding, demanding another Trillion-worth of Bailout Bikkies in 3 months time? Will there be any juice left in the shock paddles?

 

[satanoperca]

This is one bouncey cat.

S&P/ASX 200 up 2.24% to 3543.

How much higher can a dead cat bounce as this one seem very alive at the moment?

Can anyone give an incite into what is driving this run?

Cheers

 

[Grinder]

As high as the market wants it to. My guess is it's all the investors that have been out the market and now itching to get back in, based on all false hope in the US.

 

[white_goodman]

I'm waiting for Cramer to come out with another 'BUY! BUY! BUY!/ THE REBOUND IS HERE' call.
And when he does, i will max my account shorting the **** out of everything i can get my hands on (except gold)

and I'll be buying bear stearns...wait what?

 

[MRC & Co]

As high as the market wants it to. My guess is it's all the investors that have been out the market and now itching to get back in, based on all false hope in the US.

Exactly.

Will 3800s do that?

 

[dhukka]

Interesting times indeed. In 1929 the Dow dropped from 51% before rising 48%. It than proceeded to drop another 86% for a total drop of 89% (381 to 42).

Of course times have changed and I mention the above only as a warning. I think this could be a recovery and I don't have a great answer for Pythagerous.
The main problem is that it does not seem enough toxic debt has been bought to account and when the next big fish drops or needs govt assistance market sentiment will change, surely not everyone insured with AIG.

Interestingly the S&P500 is down almost the exact same amount as the Dow at the same point in the Great Depression bear market. Of course that doesn't mean it will play out the same way as it did in 1932-33 but odds are that there is a few bear market rallies left in this one yet.

Investors are still paying close to an historic average multiple for stocks as opposed to other severe economic downturns when multiples were half what they are now, re-1982-3, 1974-5, 1930's.

If Giethner can spin this public private partnership right and mtm rules are relaxed, I could see this rally lasting through till mid April when 1Q09 earnings start coming in and everyone realizes they are dismal and there is no recovery in sight.

 

[nizar]

UBS: Hedge Funds Back To Buying Stock
March 20, 2009
It’s been a long time coming, but hedge funds are betting on stocks once more.

For the first time since October, U.S. hedge funds clients of UBS were net purchasers of equities, according to a report from the bank’s chief equity strategist, David Bianco. In the four weeks through March 13, hedge funds averaged $140 million in net purchases of stock.

The most popular sectors for the new stock inflows were healthcare, consumer and industrial companies. Hedge funds have still not sweetened on financials or energy companies.

The move back into stocks comes as the Standard & Poor’s 500 Index, which hit a 12-year-low on March 9, began something of a rebound. As usual, hedge funds are somewhat ahead of the curve””if, indeed, the market rebound is for real””as most other investors remained net sellers of stock, according to UBS.

http://www.finalternatives.com/node/7317