Many analysts predicting DOW below 10,000 this year, and no real signs of reasons for it to take off again.

Thoughts?
m


Financial Markets Plunge for Third Day

   

Well, the Dow already dipped below 10,000 not even six months ago and on a number of occasions before then. While it's still much improved over its standing two years ago, like you say these Highs represent a plateau without any expected path but a [staggering] straight line or down.



Sure, perhaps a little more from the inflation tap can literally "pump" up the average to new record highs, but based on the Fed's recent actions regarding interest rate hikes, I believe that particular jig is up.

A large portion of total corporate earnings in the US are derived from the financial services sector, so I would expect that a lot more market manipulation will be required hereafter to prop up the Dow above 10,000 as long as possible (a vast infusion of Social Security money would help, FYI...). It will dip below 10,000 here and there, it may even SPIKE below 10,000 on occasion -- be it in the next few months, weeks or days from now. But you can definitely bet your behind that the Dow will mysteriously climb back to more respectable levels each and every time (and despite conventional wisdom). That is, of course, until the whole jig is up or some unforeseen event siphons off the money supply

The article states that US consumers are growing more cautious, and I'm guessing that some investors are too. And honestly, who could blame them?

And that's my two cents.... -_-'

   

I love your responses, 64, thx. The thing I don't like is that over 4yrs the line is "flat". bruuuuuuuuutal.

I have a feeling that it is only a matter of time until the blind enthusiasm in American markets will realize that the deficit in the US and declining dollar is a bad thing.

Scary times, methinks.

m

   

Very scary times indeed. Sometimes I wish they could just quit the charade and get it over with (I'm just tired of seeing the fervor leading up to 1929 repeat itself). But then I also wonder if I shouldn't be more careful of what I wish for. Even if our protectionist measures now would get us through the thick of financial hardships (following a crash), what kind of world will await us on the other side?

BTW, thank you Mukluk. I'm glad that someone confirmed that my responses are in some way, shape or form lovable. I've always worried that since I don't know squat about anything other than coins, people would see right through the layers of improvisation. ^___^'

   

I know I conjectured that the Dow could dip below 10,000 within even a few days, but this is crazy.... @_@'


(In case image doesn't show, Dow average on Wednesday, 4/20/05 is down 115.05 points at 10,012.36.)

And for that matter, I wonder if this NYSE-Archipelago merger announcement (which seemingly came out of nowhere) is part of that market manipulation (more like desperate ploy now) that I regretfully conjectured might follow a sharp drop below 10,000 (or whatever psychological barrier may be on the horizon).

Methinks I better shut up before insanity ensues prematurely.... ^___^'

   

I have never understood economics but it does seem obvious that this is why the current administration has ignored warnings about dangers of tax cuts during war time. Private retirement accounts, which will provide billions to investment institutions, are a done deal then?

   

Hello Chigeeng.

Wolfowitz being head of the World Bank sorta/kinda/somewhat seemed like a done deal and it ended up being so. After pouring so much time and money into this Privatized Social Security scheme, it will probably be a done deal anyway whether the idea is sold to the public or not. The sensational publicity will just give the mainstream an excuse to "naturalize" the decision-making process, not unlike how the Presidential Campaign between Bush and Kerry was described consistently as "neck to neck" to make a Bush win sound as unsurprising as possible. [And hey it worked -- all recount efforts held afterwards were virtually ignored.]

I have my doubts whether this scheme will help the market in the long run -- even if you bail out a whole lot of water from a sinking ship, it doesn't change the fact that it's still sinking. But at least its confirmation that Social Security withholdings are essentially just another tax on the paychecks of Americans -- the money derived is being used NOW (at least since the 1990's) and will likely not be returned to them in the future.

That being said, I wonder what fate will befall bloated ol' Medicare.... X_x

   

Shoot, just realized the daily Dow chart image about didn't even show up! \_/
Ah well, if you follow the market daily it's just redundant information.

WELL NOW, wasn't that awwwwwwesome shootback expected? ^_^
Guess there wasn't any need to wait till the 10,000 mark was breached -- we now offically have a 200 point buffer brought about by a generous portion of Fed Reserve comments (and some rather short-term memory), several slices of that NYSE-Archipelago news, and a generous seasoning of overly-optimistic language (the market is "oversold") and "unexpectedly strong" earnings. Now we're cookin' with fiy'a, cause in that kind of environment you can sneeze and set off a Bull rally. ^_^

Aaah, but don't mind me -- I'm just a pessimistic Bug. -v-
Either way, it's gotta be admitted that crisis was averted for another day. It'll probably stay in this range tomorrow and play around with negative territories again next week.

But I did promise to shut up, so I will.
For now. -v-'

   

Coming this week guys, it's going to happen.

m

   

Meh, just a number. It will be around that number now and again. The problem we are beginning to see is slumpflation, prices going up and the economy stagnating. The measurement of that will be on the faces of the people when they see their paycheck and compare it to the cost of living.

   

Just a number indeed. But so is the Nasdaq, and inflation, and GDP, and the deficit, and the currency, etc etc. When all signs point in the same direction, do you still doubt your compass? This is kind of like doubting 20 compasses, isn't it?

I am personally very wary of American investments right now. I am in an investment club down here and all they seem to want to buy is Starbucks and XMRadio. Sheesh.

Talk to Americans in my area and they are still convinced that everything is just ticking along as planned....am I just being alarmist?

m

   

Your going slightly mad. S'ok we all are to some degree. The US is in serious trouble yes, but it thrives on that at the same time as it creates investment. One mans loss is another mans gain sort of thing. The forecast is more of the same, you will note it is a bit jumpy but it won't nose dive for the near future and if it does we all go with it. In 10 years the story will be much different but for now I would bet on banks and gas companies making a killing.