Market Watch 7/29/02 (Dow +447.49, NASDAQ +73.10, SPC +46.12)

Yahoo ^ | 7/29/02 | me

[mrs9x]

Stock market has opened higher...DOW is up 171 as we speak...

[mrs9x]

Maybe this is an extended rally that will carry over into November.

[Dales]

Hey now, you broke protocol. These market watch threads only go up when the market is tanking. </sarcasm>

It'll be interesting to see if this rally continues, or if it is a bear trap. I personally believe the former.

[Mo1]

Well it's a little early to tell about November .. but it is a nice start for the morning

[Dales]

My prediction made last Wednesday after closing is looking pretty good so far.

[Principled]

Maybe this is an extended rally that will carry over into November.

I do expect the market will be close to 9500 by November.

Wishful thinking - and likely.

[alisasny]

I think the market will be over 10,000 by election day despite the demorats best attempts to subvert the growth.

[Wyatt's Torch]

I think the market will be over 10,000 by election day despite the demorats best attempts to subvert the growth.

Why?

[PhiKapMom]

Wish you were an analyst on TV to encourage investor confidence! Some of the analysts are wearing a woe is me look and the market is going up! That speaks volumes IMO!

[Dales]

I made a similar prediction about 10 days or so ago.

It looks to me like the market had overcorrected. For some reason, it appears to me that we have entered a period of excessive volitility that has earmarks of emotionalism. The bubble was a symptom. The bloodletting was a symptom. It seems to me that once there is a rally (and we may be in it now), the same emotionalism is likely to make it faster than we might anticipate (another overreaction, if you will). But in any case, it looks to me like if you extend the best-fit line of this graph, it indicates we should be around 10,000.

[mwl1]

CNBC reporting major upswing in corporate buy-backs of their own stock. This is very good fuel for an extended rally.

[Wyatt's Torch]

But in any case, it looks to me like if you extend the best-fit line of this graph, it indicates we should be around 10,000.

Ahhhh, if only markets followed regression lines. I read your prediction. I made one too in the middle of June that the DJIA would drop to 7,500, NASD to 1,200, and S&P to 800 then we would hit a trading range for a year or so. Your volatility theory looks good now. I just want to know what, fundamentally, would be the reason for the markets to increase 21% in the next 3 months? What changed since last week (other than a resurgence in the dollar and a collapse in gold - both of which are signs of resumed deflation).

[mrs9x]

DOW is up over 300 as of 10:35 this morning...maybe we can move up over 500 points again!

[Wyatt's Torch]

CNBC reporting major upswing in corporate buy-backs of their own stock. This is very good fuel for an extended rally.

But entirely not the basis for an extended rally in the actual economy.

[Dales]

The basis for me thinking there was an overcorrection was that the earnings yields for equities were lower than that of government bonds.

The guess (and it was just that, and I am not claiming otherwise) about where it would end up by November was a gut feel based on my belief that the influx of people "new" to the market is leading to a more emotion-based wave than has been prevelant in the past.

And 10,000 seemed a better guess when I made it because the market was not down nearly as low as it would get when I made that prediction. Caveat lector :-)

[Wyatt's Torch]

I still want to know WHY? What fundamentally changed since last week? If anyone can answer this, I'll leave it alone.

[mrs9x]

I think it is because there are some good buys out there right now, and in addition, the "panic mode" that people were in over the past two weeks is over. Finally, the dollar has become stronger and international investors are moving back into the US over European and Asian stocks.

[Wyatt's Torch]

The basis for me thinking there was an overcorrection was that the earnings yields for equities were lower than that of government bonds.

You mean this? (Did we trade posts on this? I have with several others)

[Dales]

Yes.

[SauronOfMordor]

One of two things: either insiders know something good is about to happen, or the Fed is manipulating the market, trying to goose it higher so the institutionals have a chance to cash out before it crashes again.

[Miss Marple]

I will take a stab at it. Most people in the stock market are in there for retirement, either through privately managed IRA's or pensions. A great many are in mutual funds.

Some fund managers had to pull money for nervous nellies who were cashing out. They are gone. Therefore, fund managers are taking cash and selecting stocks that are looking like bargains.

Also, private investors may have pulled money out, but where are they going to put it...in BANKS? Heck, right now I would be worried about having my money in Citibank, plus they pay really low interest.

I would guess a lot of people pulled their money out, looked around, and decided to go back into the market instead.