Dow Jones Below 8000?

[Guest adp]

Why do you always presume that something that goes against your view is manipulation?

In the last 7 working days the Dow had fallen from 9,400 to under 8,000 for a brief time. That's a pretty big fall. There was also an 800pt fall before the Dow even opened a few days ago. Remember they switched off the futures trading for a while?

Just under 8,000 was the support level a few weeks ago when the Dow fell. Today was a re-test. When it became apparent that was going to hold, there was a surge of buying. In turn this would have triggered lots of forced buying to cover shorts and also stops. This is normal in a bear market. It doesn't mean everything is better or that we have reached a bottom, it just happens.

Out of interest, what do you regard as manipulation anyway?

Well there was a lot of politics around today too. The hedgies actually came out surprisingly well on their grilling today so love may be restored there. Also it looks as if some plan outside of the TARP will be cooked up for the auto makers and Paulson has been spinning his TERP/TARP about face faster than a top today so some may have bought it. All relatively good news in a market clutching at straws in a rushing torrent. The big thing IMO is the volumes of trades look pretty reduced. Many who can have taken their marbles and gone home for the interim.

[Confounded]

Why do you always presume that something that goes against your view is manipulation?

In the last 7 working days the Dow had fallen from 9,400 to under 8,000 for a brief time. That's a pretty big fall. There was also an 800pt fall before the Dow even opened a few days ago. Remember they switched off the futures trading for a while?

Just under 8,000 was the support level a few weeks ago when the Dow fell. Today was a re-test. When it became apparent that was going to hold, there was a surge of buying. In turn this would have triggered lots of forced buying to cover shorts and also stops. This is normal in a bear market. It doesn't mean everything is better or that we have reached a bottom, it just happens.

Out of interest, what do you regard as manipulation anyway?

In the last 7 working days the Dow had fallen from 9,400 to under 8,000 for a brief time. That's a pretty big fall.

Tonight it stands at 8835, that puts us slightly over 500 points down form the recent peaks and just a fraction of the bounce we saw today. Today the bond market showed it's first signs of calling an end to the whole bailout mess. The equity market was reacting to this news and the "support" level did indeed become a support level, one that would have been shattered was it not for the intervention, given the volume of shorts this made the bounce we saw today.

As I have pointed out before the SM's are a barometer of the economy, if they fall further can you see there being enough confidence to offload the bonds secure the bailout funds? This is why they absolutely have support the markets, you have to look at the bigger picture this is not about the market presenting fantastic bargains based on fictitious earnings this is about the survival of the system!

Out of interest, what do you regard as manipulation anyway?

The most notable manipulation is on days like today where the news is dire, like the days when the futures stopped out and every man and his dog was calling crash but the markets actually railed massively like today. Just little anomalies like that.

[RufflesTheGuineaPig]

How low will it go?

And how come the FTSE is doing better these days, aren't we supposed to be in worse shape?

And the prize for the biggest FAIL of the day goes to...

[blankster]

What makes me suspicious of manipulation is not one single big rise or fall, but the fact these violent swings keep happening. The Dow and FTSE in themselves are just indexes, so there's not much point in trying to manipulate them. But to me it indicates that there might be big co-ordinated swoops on selected companies to drive up their shares and then co-ordinated profit-takes.

But also, violent fluctuations in the markets are supposed to be a precursor of a bear market / crash. We've already got the bear market and have had several small crashes!

[the end is a bit nigher]

Tonight it stands at 8835, that puts us slightly over 500 points down form the recent peaks and just a fraction of the bounce we saw today.

Yesterday it stood at 8284 at close and traded a lot lower than that overnight, over 1,000 pts down from recent peaks.

The most notable manipulation is on days like today where the news is dire, like the days when the futures stopped out and every man and his dog was calling crash but the markets actually railed massively like today. Just little anomalies like that.

What dire news was there today? The SM tested recent lows which held, hence the bounce.

Who is doing this supposed manipulation? What are they buying and what with? And how come no-one is noticing it? What form does this manipulation take?

[the end is a bit nigher]

What makes me suspicious of manipulation is not one single big rise or fall, but the fact these violent swings keep happening. The Dow and FTSE in themselves are just indexes, so there's not much point in trying to manipulate them. But to me it indicates that there might be big co-ordinated swoops on selected companies to drive up their shares and then co-ordinated profit-takes.

But also, violent fluctuations in the markets are supposed to be a precursor of a bear market / crash. We've already got the bear market and have had several small crashes!

I don't think you realise the volume of trading in the US markets and how much of an effort it would take to shift the price of a specific stock without an awful lot of traders becoming involved. There needs to be a reason for this to happen.

Violent fluctuations are not supposed to be the precursor of a crash. They usually indicate the point at which markets make a turn, either up or down.

[R K]

What makes me suspicious of manipulation is not one single big rise or fall, but the fact these violent swings keep happening. The Dow and FTSE in themselves are just indexes, so there's not much point in trying to manipulate them. But to me it indicates that there might be big co-ordinated swoops on selected companies to drive up their shares and then co-ordinated profit-takes.

But also, violent fluctuations in the markets are supposed to be a precursor of a bear market / crash. We've already got the bear market and have had several small crashes!

Welcome to the layer cake son!

[evictee]

How low will it go?

And how come the FTSE is doing better these days, aren't we supposed to be in worse shape?

Because it's measured in pounds.

[Converted Lurker]

God you lot love to see the sh!t hitting the fan! Quite funny when it doesnt go your way - ie down, it MUST be manipuation! lol

And yes im a bear, I just dont take the pleasure some here seem to in others misfortune..

Not sure what you mean by others misfortune....however, moving on.. most of those who comment on these subjects can profit whether the markets go up or down. When you get the dow moving down 400 to finish up 500+ on the day it's *odd*. Those swings could simply be a consequence of volatility driven by fear and/or uncertainty...whatever...most here are simply attempting to figure out how to profit from it. FWIW I had a hunch/took a bet the DOW would finish up today, but had a stop once it reached 200 positive on the day. Fortunately I 'bought' when it went positive in the afternoon, but a swing of 400 down would have been a stop loss too big for me (and most) normally, and that's very fukcin annoying when it happens...

Edited November 13, 2008 by Converted Lurker

[deflation]

Newsnight just said the DOW closed 4 pts down?! They must use the same data that's frozen on the BBC business page. The graph is right.

[ChumpusRex]

What makes me suspicious of manipulation is not one single big rise or fall, but the fact these violent swings keep happening. The Dow and FTSE in themselves are just indexes, so there's not much point in trying to manipulate them. But to me it indicates that there might be big co-ordinated swoops on selected companies to drive up their shares and then co-ordinated profit-takes.

But also, violent fluctuations in the markets are supposed to be a precursor of a bear market / crash. We've already got the bear market and have had several small crashes!

You don't necessarily have to have manipulation. It's a well known, and very popular investing tactic, to buy when the price falls to an historic low, from which it subsequently rose - and to fall when it reaches an historic high from which it subsequently fell. So called, 'buy the dips' and 'sell the peaks'. It's easy, computers can do it, even inexperienced traders do it.

The result is just the sort of thing you saw today. The dow at 8000 is a recent and a long historical dip - there are a huge number of people waiting to buy at that level - no surprise then, that it ignites a buying spree.

Don't forget that volume has been very light recently - a lot of the day traders and hedge funds have been scared off, and are trying to conserve capital rather than gamble. This is a common thing to see in bear markets - the result is that the price moves get much more dramatic, as it takes less buying or selling to move the price.

Technical analysis of stocks may well be some pseudo-scientific mumbo-jumbo, but the point is that the market is like a herd of animals. Enough people follow technical analysis that they can move the markets, and make the predictions of TA self fulfilling.

[Timelash]

In his latest YouTube message, posted a couple of days ago, Market Ticker guy Karl Denninger says that if support holds, he expects a rally that will rip your face off. For a while, anyway.

Edited November 13, 2008 by Timelash

[Converted Lurker]

In his latest YouTube message, posted a couple of days ago, Market Ticker guy Karl Denninger says that if support holds, he expects a rally that will rip your face off. For a while, anyway.

was that it today then?

[A.steve]

Violent fluctuations are not supposed to be the precursor of a crash. They usually indicate the point at which markets make a turn, either up or down.

Please can you give an example of one time in history where extreme volatility was an immediate precursor to increasing prices.

[pppeter]

How many of these "Black *day" threads have there been? We've lost 40% and nobody's got the day right yet. I hope nobody is trading this (but if you are making money, please let me know how).

[Killer Bunny]

Triple bottom. Buyers lined up at the Oct 10th mkt low. Just use any bounce to sell, and any move towards that low to take profits.

Disagree 100%. This is a bear mkt rally, as I have said 20 times in the last few weeks. The market will rise 30-50% from its lows of October within a few months.

[leedsproperty]

Disagree 100%. This is a bear mkt rally, as I have said 20 times in the last few weeks. The market will rise 30-50% from its lows of October within a few months.

Why do you think this?

I recall the 30% prediction but not the 50%

FTSE 100 low - 3852.59 + 30% = 5008.37. Curent price around 4150 so is it really worth taking the risk on your constantly changing predictions? Have you put YOUR money where your mouth is?

[Killer Bunny]

Why do you think this?

I recall the 30% prediction but not the 50%

FTSE 100 low - 3852.59 + 30% = 5008.37. Curent price around 4150 so is it really worth taking the risk on your constantly changing predictions? Have you put YOUR money where your mouth is?

I both love and hate HPCers. The latter when they distort what I have forecast. I have consistently said 30-50% from the lows. AGree or disagree but don't distort the message. Also, to accuse me of making 'constantly changing predictions' is not on.

I have stated repeatedly my reasons.

In the light of everyone saying sell at these levels I am putting my view to ensure someone who understands markets is getting a hearing. Do what you want with your money.

[domo]

Its bear market volitility.

here

Edited November 14, 2008 by domo

[Bruce Banner]

Why do you think this?

I recall the 30% prediction but not the 50%

FTSE 100 low - 3852.59 + 30% = 5008.37. Curent price around 4150 so is it really worth taking the risk on your constantly changing predictions? Have you put YOUR money where your mouth is?

http://www.housepricecrash.co.uk/forum/ind...l=ftse&st=0

[Killer Bunny]

What's your point?

[Taylorrian]

Disagree 100%. This is a bear mkt rally, as I have said 20 times in the last few weeks. The market will rise 30-50% from its lows of October within a few months.

How many times has the Dow hit 8000 and rallied. 3? Hence triple bottom.

30-50% upside lol.

FP can you post some of your predictions, i am in the mood for a laugh.

[Bruce Banner]

What's your point?

It was just a search showing your FTSE predictions as there seems to be some disagreement as to what was really said.

http://www.housepricecrash.co.uk/forum/ind...l=ftse&st=0

[Te Mata]

I wouldn't give FP too hard a time. You have to have a view you can trade to. Sure you can disagree and state your own view as well.

But is there anything really wrong with changing your prediction as facts come to light? (Not saying FP did or didn't) Can government action change the dynamics and hence the prediction? Can Citi go broke and change the dynamics and hence the prediction? GM, Ford anyone? Of course.

The really really important thing is what you do when you are right and when you are wrong. Cut losers and let winners run and all those market cliches/truisms. I trade for a living and have done so since 2001. I get it wrong at least 50% of the time, but it doesn't matter. Mathematical expectancy is more important which takes into account the size of the wins and losses as well as the number.

There is no shame in this game in getting it wrong. The shame is in getting it wrong and not covering your @ss.

I happen to disagree with FPs view as well, but, if he's right and I'm wrong, I'll catch some of the ride anyway, because a trader/investor is a professional bandwagon jumper.

Be profitable, rather than right.

£0.02

[R K]

I wouldn't give FP too hard a time. You have to have a view you can trade to. Sure you can disagree and state your own view as well.

But is there anything really wrong with changing your prediction as facts come to light? (Not saying FP did or didn't) Can government action change the dynamics and hence the prediction? Can Citi go broke and change the dynamics and hence the prediction? GM, Ford anyone? Of course.

The really really important thing is what you do when you are right and when you are wrong. Cut losers and let winners run and all those market cliches/truisms. I trade for a living and have done so since 2001. I get it wrong at least 50% of the time, but it doesn't matter. Mathematical expectancy is more important which takes into account the size of the wins and losses as well as the number.

There is no shame in this game in getting it wrong. The shame is in getting it wrong and not covering your @ss.

I happen to disagree with FPs view as well, but, if he's right and I'm wrong, I'll catch some of the ride anyway, because a trader/investor is a professional bandwagon jumper.

Be profitable, rather than right.

£0.02

Excellent post.

It's not the view, it's what you do with it. What makes me smile is when people suggest there are less than at least two possible outcomes from any position. Anyone who claims there is only one possible outcome deserves ridicule imho.

Edit: Including myself, for the sake of clarity

Edited November 14, 2008 by RK has gone