Posted on 06/08/2006 8:59:05 AM PDT by Sabramerican
Stock Prices Plunge Again Stock Prices Plunge Again; Dow Loses More Than 400 Over Last 4 Sessions
NEW YORK (AP) -- Stock prices are plunging again today. The Dow Jones industrial average is down 123.67 to 10,807.23 by late morning. The Dow is down almost 440 points for the week. The Nasdaq Composite is down 42.70 at 2,109.10 and the Standard & Poor's 500 index is off 15.98 to 1,240.17.
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Interest rate concerns sent stocks falling for a fourth straight session as investors continued fretting about higher lending costs choking demand and hurting the global economy.
The death of a terrorist leader in Iraq pushed down oil prices, but the pullback did little to relieve uncertainty about inflation and interest rates. Some strength in the U.S. dollar was countered by an inversion of short- and long-term bond yields.
(Excerpt) Read more at biz.yahoo.com ...
Buy some gold....LOL.......
My 2cents worth !
BUY BUY BUY BUY BUY !!!
Jim Cramer of Mad Money on CNBC had some useful information about recognizing a true rally on his show last night. Perhaps you can find a replay/transcript.
In general this is a shift from smaller cap, lower quality, to higher cap, higher quality. The Dow represents, in general, a higher cap higher quality index than the S&P 500. So yes, the S&P had also outperformed the RUT2K, although the Dow even more so.
Fuel pricing is beginning to work it's way into the aggregate economy and this too will pass...
Secondly, because of the low unemployment rate, the pressures on wages have increased dramatically and is also contributing to inflation. It goes hand in hand with growth and this too will pass...
I don't think the Fed has over reacted yet, and I don't think they will. I do think that the liberals in the market are passing a lot of gas.
Now, that was FAST!
I used to subscribe to Cramer's website (in the good old days). It was pretty helpful.
He made the call before the tank in 2000.
Major drop in Asian and other world markets. Stocks here sold to cover margin calls there.
What worries me is when wall street starts the quality talk vis a vie stocks. The old adage was "when the oil stocks rally, the rally is over". My personal observation is "when the drug stocks rally, your heading for a world of hurt." The race to quality scares me more than high oil prices. I prefer wall street watching for earnings momentum rather than safe harbors.
"On the cuff, as usual?"
Of course, same price as the advice.
Here are two blogs run by experienced traders:
http://www.billcara.com/
http://www.bigpicture.typepad.com/
Bill Cara in particular shares significant insights into market action.
There are people who make a lot of money to say why things happened in the market on any given day. They make it all up. They often ascribe sell offs and rallies to the same event.
Having said that, I'll tell you how a trader looks at it. People invest in expectation of things. If you expect the FED to stop raising interest rates and buy stocks based on that, what will you do if that happens? How will you make money?
Well,,you buy on the speculation and sell when the expected surge comes. If they stop, the meaningful (short term) investing has been done, nothing left to do but sell. If the expectations are wrong and they keep raising them,,,,same thing. You sell. Neither of those two things was good for the market short term.
Next, what investors hate more than anything else is uncertainty. Right now, there are tons of things that cause that uncomfortable feeling. Many who have been burned before move to the sidelines. And that, more than selling pressure is the current problem. It's more of a buyers boycott.
My two cents.
(Oh, and I think the "fundies" conspiracy theory is fun,, but ultimately goofy)
Maybe teach.
Socratarian method.
"In about 2-3 months people will be saying, "why did I sell in June? Why didn't I buy in June?"
I hope you're right. On the other hand, it's still possible that we could go a lot lower first.
My 40 years in the market tell me that it's a mistake to be so certain about almost anything.
No thanks. I never listen to a youngster who screams. Life is too short.
It just about has to fall that far to jettison the greedy and retain only the fearful, don'tcha know? Like somebody wrote the other day, "we ain't scared enough yet!"
Mrs. Wasp is sure delighted with her IPO called MasterCard! It's been goin up whilst everythang else is goin down the drain!!! (but even it was down a bunch today!)
"I never listen to a youngster who screams. Life is too short."
Sound thinking man.
Questions like how long is a cycle? A business cycle doesn't have a fixed length. What kind of trader did you say you were?
Cramer a youngster?
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