Anybody got any idea why the DOW was up 180 today, down 150 two days ago, NASDAQ up 90 today, largest 1 day gain ever! Done this quite a few times lately. Isn't this rather extreem? Could it be that GI are taking money out, and "someone" is pumping it back up? "We'll show all those dummies, no problem here!" <:)=

-- Sysman (y2kboard@yahoo.com), February 11, 1999

Answers

Lots of cash is being pumped into 401K programs through normal payroll deductions; much of this is funneled into mutual funds where the fund- managers can decide on the timing and nature of investments that they make. So it's conceivable that GI's are beginning to dump the stocks they hold in their own discretionary accounts (i.e., NOT the ones that are controlled by their employer) which causes the DJI to drop for a day or two; and then, seeing the investment opportunity, the mutual fund managers use some of the cash they have available to buy up "cheap" stocks.

It's just a theory, but I think it's plausible...

Ed

-- Ed Yourdon (ed@yourdon.com), February 11, 1999.

Thank you, SIR!

-- Sysman (y2kboard@yahoo.com), February 11, 1999.

If you read about the stockmarket crash of 1929, these wild swings are very similar. Money chases speculative stocks or jumps in and out on rumors!!! Enjoy the ride, at the end is a cliff!!1

-- Archemedes (robin@icubed.com), February 11, 1999.

Where else is the money to go? There are trillions in the markets..and the interest payable by bonds is way to low for most to stomach...the percentage that are worried is too small to move the money in a downward spiral...so the ride will continue until the "event" occurs. What is that event? could be anticipation of Y2K...or some other unforeseen occurrence. One thing for sure...there's no where else for the money to go right now...that's why the market is going up...and when the real dip occurs..it will fall too fast at first for the masses to react. and then the real dive occurs. ya think?

-- rick shade (Rickoshade@aol.com), February 11, 1999.

One of the big brockerage firms got back in the market today cant remember who maybe Goldman Sacks, the day traders followed suite. Looks like the big boys are taking terns taking profit. The 401ks and iras are pretty much locked in, looks like the babyboomers are not going to get a chance to enjoy the nest egg. My opinion, if your out stay out, if your in, get out, the market has already made its move if you missed it owell, at least you didnt loose anything. Theres too much resistance at 9800, even if the market goes to 1100 or 1200 the upside potential doesnt compare to the downside risk.

Just my opinion

-- moose (tkh@earthlink.net), February 11, 1999.

Thanks for the info Arch, like the tech heavy NASDAQ these days. How can these hot INET stocks be so over-priced? You keep hearing about all these 6 billion, stock swap deals. What's the real value of these cos, maybe 1 bil? By the way, what do you think of the Pres wanting to put Soc Sec in the market? <:)=

-- Sysman (y2kboard@yahoo.com), February 11, 1999.

People are still buying the dips. I think the market may be topping. Regardless, the time is approaching when the dip will simply continue down. My motto is be short or be out. No advice intended.

-- Mike Lang (webflier@erols.com), February 11, 1999.

As they say, volatility increases at the onset of a change in trend...

You can almost hear the tidal wave of panic coming up behind ya'... too late to run!

-- Jeremiah Jetson (laterthan@uthink.y2k), February 11, 1999.

These rapid, wide swings at the top of a run are typically considered a technical negative -- the market is said to be "out of control". The bulls can't raise it and the bears can't drop it, though both are trying mightily.

-- Nathan (nospam@all.com), February 12, 1999.

For some comparison, take a look at these New York Times headlines from the summer and early fall of 1929:

http://sac.uky.edu/~msunde00/hon202/p4/before.html

-- Kevin (mixesmusic@worldnet.att.net), February 12, 1999.

Just finished reading Galbraiths Crash of 1929, and the parallels to today's headlines are scary. The difference today is the amount of money pouring into the market from 401K managers and capital flight from other countries -- Brazil being the most recent example. As long as Wall Street is seen as the market of last resort, the bears can keep selling at peak prices and riding the waves. I remember reading that in the months just before the Crash of '87, insiders like Trump and a few others went completely liquid. anyone have hints that's happenng again now?

-- Cash (cash@andcarry.com), February 12, 1999.

Also for long view historical analysis and parallels today of other periods, 1929, south sea bubble, tulipmania, etc., see James Dale Davidson and William Rees-Mogg "Blood in the Streets", "The Great Rekoning", and the "Sovereign Individual".

-- A (A@AisA.com), February 12, 1999.

Sysman: Re a previous post of yours: I too have trouble remembering where I've been. Gonna start keepin "NotePad" open, and swiping (copy and paste) the jump line on the page into a Notepad file. You can at least use the browser "Edit...Find" feature when on a page (e.g., the main forum page -- level above this one) to find a word. (E.g., you have several posts here, and this is the first one from the top when I searched for "Sysman".)

-- vbProg (vbProg@microsoftsucks.com), February 12, 1999.

Thanks, vb. Notepad is a good idea. Just have to remember to do the paste! <:)=

-- Sysman (y2kboard@yahoo.com), February 13, 1999.

When looking at the magnitude of stock market swings, please note that the _number_ of index points is meaningless.

What counts is the percentage.

A swing of 4.5 from a value of 200 is a larger swing than a swing of 185 from a value of 9300.

The volatility recently is no worse than it has been on many previous occasions.

So why do you hear so much about the large point swings on the news?

Because the newspeople want to catch your interest. Large number swings (especially whenever they can throw in "nth-largest") are more emotionally grabbing than modest percentage swings.

-- No Spam Please (anon@ymous.com), February 13, 1999.

No Spam,

IMO, anything more than 0.5% in one day qualifies as a large swing. We've had several in the 1.5%+ range recently, in both directions. This is topping action.

-- Nathan (nospam@all.com), February 13, 1999.