Dow
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Started by cliff-e - Feb. 9, 2018, 8:48 a.m.

A lotta buzz about the Dow officially? being in correction territory at 10% retracement. 

However if we apply Fibonacci retracement levels of 23.6%, 38.2%, 50%, 61.8% respectively we see that we could have a few more points to bark off of the Dow yet. my .02

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Re: Dow
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By TimNew - Feb. 9, 2018, 8:57 a.m.
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Definitely more downside than I originally anticipated.   Got the bruises to prove it... Still long, got longer this am. Dollar cost averaging?  <G>.  I'm still a long term investor.


With inflation finally being a factor, Bonds are more attractive and money is moving from Equities to Bonds.


I still believe the main driver here is an over reaction to what the Fed may do, but as far and fast as equities have moved,  that's to be expected. Fundamentals have mot changed and they are strong.  


I've been wrong before, (recently), but I think we are at or near the bottom.

Re: Dow
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By Julie_Hardy_Moderator - Feb. 9, 2018, 10:55 a.m.
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Where' my Dow 20,000 hat? Gonna need that soon.

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By TimNew - Feb. 9, 2018, 11:28 a.m.
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AT this point,  I can't discount anything..  But I would think at 20K, even you'd be a buyer  :-)

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By Julie_Hardy_Moderator - Feb. 9, 2018, 11:36 a.m.
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I would buy Facebook and Netflix if they got anywhere near levels of four years ago. Those are not going away. Amazon as well.


I still think the Dow could, with a few shocks to the market, fall to 12,000. Probably wishful thinking but you never know in the world we live in today.

By cutworm - Feb. 9, 2018, 12:20 p.m.
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you don't think that nflx at a pe of 200 is to high? AMZN at pe of 239

By TimNew - Feb. 9, 2018, 12:26 p.m.
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Back in the 90's,  I started ignoring PE's  A mistake I have not made since.

By Julie_Hardy_Moderator - Feb. 9, 2018, 12:52 p.m.
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Some things defy normal metrics. By the way, where are the Antitrust people? Amazon is trying to be everything to all people--and might pull it off.

Netflix is more like a utility now. And Facebook...the biggest intel gathering platform in history--partially got start-up funding by InQtel a known company of the CIA. No, FB is not going away ever.


By TimNew - Feb. 9, 2018, 1:14 p.m.
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Amazon is getting huge,  but the SEC only gets interested when there is too little competition. At least that's the alleged function.   Of course,  lobbyists can override that.   The point is,  Amazon has plenty of competition. Their just doing better.


Amazon is one thing..  Overpriced by basic PE standards,  but the potential is massive and so are they.


Facebook and Netflix could be replaced with a slightly better idea in a heartbeat.  

Re: Dow
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By Richard - Feb. 9, 2018, 11:01 a.m.
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The big surprise will be with this Government Shut Down. is that going to happen and send the DOW down yet again? I guess for Traders like me, who think everything is being played out like watching a movie, I say this Gov shut down will happen because it fit in with there overall scheme and both sides may be playing the game.

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By TimNew - Feb. 9, 2018, 9:06 p.m.
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"I guess for Traders like me, who think everything is being played out like watching a movie, I say this Gov shut down will happen because it fit in with there overall scheme and both sides may be playing the game."


How exciting.  Like a movie huh?   Can you tell me where the DOW will be in a week?    TIA  :-)

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By Richard - Feb. 10, 2018, 9:06 a.m.
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Like any movie that you go see in the theaters, I do not know the exact ending of this and can not tell you the exact place the DOW will be in a week from now. I do know that IF this is scripted by the US Government, then I would want to see what happens with this Government shut down that is coming and just maybe they are going to make it a much bigger deal then most are figuring so that they can give the news people something to talk about why the FED and Goldman push the markets around some more. 

I also know that the Fed controls M2 and I also know that M2 has an enormous influence on the economy and markets and I finally know that M2 growth rates are extremely low (depending which MA you use. The 13 week MA is very low, while the 52 week is trending down but not at extremes yet)

By TimNew - Feb. 10, 2018, 10:09 p.m.
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So in your movie,  you get to say " I knew that was gonna happen"...


That's very useful  :-)

Re: Dow
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By cfdr - Feb. 10, 2018, 12:30 p.m.
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As I've said before, I do not think this market is doing anything much different than it has done since 1950.  It is still on an exponential path.

Also, from previous cycles, and this is a very persistent cycle, 2018 is the perfect year for a corrective cycle low.  It is in phase with almost every cycle low prior to 2006 - when the corrective move was anemic - and led to 2009, IMHO.  This appears to be a cycle with a strong driving force, and I strongly suspect it is driven by the Fed not wanting to irritate the politicians during a presidential election year.

2018 is the perfect year, IMHO.  I think it is known at the Fed that, if a corrective cycle low cannot be triggered this year, it will get more and more dangerous as time goes by.  I think by now they are well aware that a healthy market required regular corrective cycle lows.  Doesn't it seem like they are trying to trigger a correction, but they are very cautious about it?

Now, what would constitute a "healthy" corrective low?  Certainly not a spike down with an immediate recovery.  To be effective, it needs to make people who wish to "buy the dip" lose enthusiasm (to say the least).  This requires both price and time.  Look at all of the previous cycle lows - I have them labeled on a couple of charts (on a log scale).  They are the third and fourth charts on this page:

https://tinyurl.com/y7h4fw75

Notice how the corrective lows are months long prior to 1987.  That low was a year late.  The low attempted to form in 1986, when it was due, but the market was too bullish, and it rallied and crashed in 1987.  Then, Alan Greenspan "saved" us.  In 1990, however, the cycle came back perfectly in phase again.  2018 would again put this cycle back in phase - and I wonder if the Fed is attempting to force this to happen (but very cautiously?).

Now, I have been worried about a phase reversal here in 2018 - if this cycle low could not happen.  So, *if* we can get a *good* cycle low, this market should again be a healthy market - at least for a little longer.  If we see a blow-off to a top when a low should be expected (now?), it would be a very bad sign, IMHO.

So, I'm happy seeing this market action, and I'm hoping it will continue for some time - but not collapse, of course.

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By Richard - Feb. 10, 2018, 2:07 p.m.
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I agree with everything that cfdr stated and think we need more to go, at least in time, before this is over or else a bigger correction will be ahead of us.

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By TimNew - Feb. 10, 2018, 9:24 p.m.
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As long as you ignore the fundamentals,  you are both exactly right...