Wow right when I'm about to invest into some shares of conexant.

So, what does that mean (I know what a drop means, but I'm thinking more globally and more big picture)? Is this a blip or the start of a trend?

Dropped nearly 500, craziness.

So, what does that mean (I know what a drop means, but I'm thinking more globally and more big picture)? Is this a blip or the start of a trend?

 

From what I've read, probably just a little, quick self-correction. The market was out pacing the economy.

Time to buy!

Time to buy!

 

 

Yeah, but what?

Yeah, but what?

widgets. whatever the fock they are.

So, here be the question: did the entire world think that China could keep chugging along at 10% growth for the infinite future?

Jas, let's unleash the Soxtalk IPO upon the world.

So, here be the question: did the entire world think that China could keep chugging along at 10% growth for the infinite future?

Those of us that know anything, no... but we (the "free market" economies) are seeing to it that they have inflationary pressures, let's put it that way.

Lucky for me I sold my China 25 ETF a month ago.

Jas, let's unleash the Soxtalk IPO upon the world.

Ha. If you released that in Aussie Stock Exchange and said we were Exploration Miners looking for Uranium, it'd probably do pretty damn well.

 

And unfortunately the flow on effect has been felt here. My shares got HAMMERED today, but it creates a good buying oppurtunity while they're down for the moment.

I changed up my 401K a bit but I have absolutely zero holdings in individual stocks. I have some international funds that have done outstanding, and than a couple bond funds, a REIT, and than a few specific retirement funds with a target retirement of when I'm 55-60.

 

I pretty much don't pay much attention to the day to day because my thinking is very long term but I've had real nice appreciation thus far (but I'm sure somewhere along the lines there will be some bumps in the road).

China's markets holding steady right now.

China's markets holding steady right now.

Thats good news considering the tanking it took today.

But the rest of Asia dropped another 2-3% today, as are European markets at the present moment.

SELL! SELL!!! SELL IT ALL!!!!!

 

Economics 101 is now in session

 

-With China down 9%, which started this whole thing, they are afraid of inflation which is being caused by the much higher commodity prices (think energies, metals, food stuffs, etc). Being an net importer of capital good for their cheap exports, they are going to be under a HUGE crunch if prices keep going. The problem is in the US, we have known this kind of information all along, while the Fed bank has taken small incremental steps to adjust to the problem. In China there is a complete lack of independant information, and when the Chinese government let slip they were going to raise rates to stem off inflation there, everyone got scared.

 

-In the US, we the China factor, plus Greenspan speaking of possible recession in 08, plus the fact that the market really was over bought from a technical standpoint. From the start of this rally, we have had pretty much a 20% straight line increase, which is just begging for a technical correction. We hadn't even had a 2% downday on the Dow Jones in almost a year.

 

-Usually a big sell-off like that marks the end of a prolonged sell-off and idicates the beginning of the end. But since this was at the end of a rally, its harder to tell what it means. From a technical standpoint, Europes two day losses pretty much fell right in-line with our near 4% one-day declines, and China also rallied about 4% last night, which left them as about a 5% net loss (also pretty close to our net loss). In other words no one broke out any lower, which if this was the beginning of a panic (panic because of the huge sell-off at the beginning, and not a slow orderly correction, finishing with a sell off at the end) there should have been more blood in the water somewhere around the world. At worst, there should have been an inability in China to rally, signaling an absense of buyers, which didn't happen. All of that is very positive indicators.

 

-Also the Dow futures is up just under 100 points in pre-open trading. This means there are people looking for bargains, and not panicing.

 

-Personally, I think this was a long over-due correction, which when considering the rally we have had, and the bad news from around the world and US, wasn't really that bad. I think we should be all right, but the number I would keep an eye on would be 12000 in the Dow. If we breach that, the next stop is probably the old record of about 11700, which would be dangerously close to a full 10% drop (about 11500), which would be the first official bear market since the post 9-11 recession drops. If we go into that, the whole mood changes, and all bets are off.

 

Hopefully that helps. Let me know if that didn't make sense, or if anyone has questions.

Quote of the Day from our esteemed Federal Reserve Bank President Ben Bernanke

 

"The markets appear to be working well"

 

Thanks Mr Obvious you are a life saver!

Quote of the Day from our esteemed Federal Reserve Bank President Ben Bernanke

 

"The markets appear to be working well"

 

Thanks Mr Obvious you are a life saver!

Working well? After yesterday's computer issues?

Working well? After yesterday's computer issues?

 

He wasn't speaking about the computer issues at all. He was speaking about the effeciency and clarity of the marketplace.

I know nothing about our market working well.

 

I'm sure you get it, Mike.

I know nothing about our market working well.

 

I'm sure you get it, Mike.

 

Anyways, to add to one of my points on the lack of a correction.... The streak the Dow had of over 200+ days without a 2% downday was the second longest streak in the HISTORY of the Dow Jones Industrial Average. A correction was way over due.

http://biz.yahoo.com/cbsm/070301/1c4cb3d3d...233e824128.html

 

Oh no... a Cubs fan wrote this.

http://biz.yahoo.com/cbsm/070301/1c4cb3d3d...233e824128.html

 

Oh no... a Cubs fan wrote this.

 

Meh, it might well be the beginning of a sell-off by the technical signs aren't there. Yesterday they rallied back, but finished on the lows, which ususally means they are exhausting the "buy the dips" people. The market did open sharply lower, which wasn't a big surprise, but instead of sustaining the selling, the market actually rallied back pretty well, even going green for a while. It looks like we are going to finish in the high end of the range. I would bet tomorrow is a 100 point plus down day, as I doubt anyone will want to carry positions over the weekend, but barring bad news, I would bet on a rally early next week.