Whoo! Looks like my analysis this time was dead-on. As expected, we broke through 867, came back and tested that level for support, and now we've rallied up to 900, and now the market faces its first serious test. It doesn't look like the market is going to breach that level today, and I think late profit taking will probably bring it down a little bit. But tomorrow .... if that level is breached, the bear party MIGHT be over for real. I love the long mosquito leg on today's candle -- that's the kind of signal bulls love to see.
OK, I'm basically all in for the long term after this week of buying. All of my investment cash is in, but I feel like over the next 3-4 years I'll be happy I bought in at the current levels.
Do you all truly think the bears are over. I remember the last time the market hit 8k a couple of weeks ago. There was a huge rally too after that.
If your window is 3+ yrs down the road, most analysts think buying stocks now at 8k levels is just fine. I, like robbie, still believe there is significant downside, adjustment of earnings all around, consumer credit crisis and are patiently waiting for potential 10-15+% more. This reply was a bit non-sequitor. Yes, ETFs mean you want to invest on a broader scope, have a more risk averse, diversified portfolio but really ETFs are for individual investors who don't have time or want to do their own research. You can just as well individually invest in the stocks in an ETF's holdings at potentially less cost (ETF fees vs. transaction costs). It's good to buffer your potential gains/loss but then again there really is no reason to hold too diverse basket of stocks if your research is sound and you have found the outperforming stocks in whatever scope you're looking at.
damn my work computer for no longer supporting my trading site for whatever reason (site isn't blocked..it's just having javascript problems) wanted to get in on aapl sub 90, mgm sub 10, and some others.. oh well funny that with all this rallying, be stays at .06 it's over there
Your approach is what I'm taking with my IRA's... I'm buying on big dips, but only a little at at time. My trading account is another story... there, I play the role of the idiot.
Yeah, I'm pretty conservative. My normal contributions to 401K and IRAs will continue out of my income, but I had some side investment cash seperate from my savings/emergency cash that I've been "playing" with. I figured if there was any time to go long, its got to be pretty close, so I've been slowly distributing the money into various long term investments over the last week or two. The market might drop more in the short term, but I'm in it for the long term now. If I build up a little bit more in the coming months I might have a little bit of "play money" to try to invest in some short term stuff, but I'm not doing that anymore right now.
THIS is why I was so convinced previously that the bears had gotten too greedy, and that 8,000 was too significant a support to breach. For us to breach that 8,000 level and fall below it, it would essentially mean the destruction of whatever *real* economic growth we've had in over a decade. It would also mean the end of a growth trend that has lasted for almost three decades, and was not nearly threatened even by the crash of 1987. I'm not saying it can't happen -- I think there is a very real possibility of a contraction to that extent. But that level is too significant to be dismissed on a single major wave down, and that's likely why we saw the impulse buying today.
This trend didn't start in the 70s ... it actually started around the middle of 1982. There was no growth in the 70s, the market actually traded sideways for that entire decade.
i was going to say 82 but got lazy since it was pretty close to what it was in the 70's...either way...what was the p/e in 82 (aka before the credit bubble started exploding)?
Found the answer -- in 1982 the S&P PE Ratio was 10, which was actually lower than what it had been in the '60s (above 15) ... no thanks to the sorry economic times of the 70s. Today, it's at 11.57... even as dividend yields have continued to trend upwards. http://bp1.blogger.com/_gG9eZPKJz0w...srqB0/s1600-h/DividendYield-S&P-500-1960-.jpg
