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My Analysis of the DOW

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john_1
Super Contributor
The bull trend which has been in place for over 4 years was first violated on the 24 June and went on to make a low on the 15 July...Since then we have continually flirted with this level( the long term support)breaking above it 8 times. So what does this mean...there are 2 different ways to interpret this data. One bullish. That all the bad news is already priced in and that we are building a base on the long term trend line from which we will eventually rally and go on to new highs...the other is that the market is using this time and each rally as an opportunity to off load stocks at good prices. This will leave the market without an underpin and the worst is still to come. The question one has to ask at this time is Lehman the last of the failures or the first of a new round of failures as the financial crisis deepens.. If this is the case then we are standing on the brink of a very serious problem and the bear market is truly about to begin.
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9 REPLIES 9
grandmaster
Frequent Contributor
Still not convinced that the strong second quarter growth was nothing more than a mirage? Here's something that may change your mind: A report released by the Mortgage Bankers Association today shows that a record 1.249 million homes were in foreclosure during the second quarter. In addition, from the end of March to June 30, 2.9 million homeowners were delinquent on their mortgage payments - up 25% from the same time period last year. Our friends at Strategic Investment warn that there is an even bigger property bust on the horizon - in commercial property. The bust could be worse for banks, stocks and the U.S. economy as a whole than the current residential debacle...an almost unbelievable notion. Bloomberg says that the United States could see the worst drop in commercial property since the 2001 recession and Morgan Stanley is calling for a 15% drop over the next 2 years.
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Not applicable
John...there is a third scenario which I favour...that is that we churn around these levels in a sideways market characterized by high levels of volatility....
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john_1
Super Contributor
The curn is either a period of acumulation or a periodd of distribution.. the question is which on.
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Not applicable
If all the banks in the US are doing so bad, even going bankrupt, surely the SA bank shares should start doing well. Banks in US are going bankrupt SA banks are bringing out positive results, yet both banking shares going down????
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Brazen
Super Contributor
Thing that was putting some kind of floor under everything was the element of doubt. No one knew how wide or how deep it all went. Now with Lehman and Merrill there's a bit of light cast into the dark. And the monster in the corner ain't so invisible, and he sure ain't pretty.
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john_1
Super Contributor
The fact the Merill has gone is much bigger news and shows the severity..I recon AIG is going to go Belly next..any bets
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Brazen
Super Contributor
No bet, cos what all the others have shown is that once they start asking for help it's all over.
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john_1
Super Contributor
No Suprise..The DOW has made a new intra day low (overnight on the Asian reaction) so a close tonight at or below these levels will suggest the bearish option plays its self out..The result a massive selling of all quality assets, oil, gold, copper platinum, to cover the losses in the banking sector. This is not in my opinion the time to be buying.
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schizo
Frequent Contributor
alot of economic data coming out today
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