Hey, What happened? I thought the sky was falling, but instead there was a rally. Just thought I'd see if anybody else noticed the rally.

-- jqpublic (jqpublic@usa.com), October 18, 1999

Answers

I noticed it, was just about to report the DJIA ended at

10116.59 +96.88 (+ 0.97%)

-- Preparing (preparing@home.com), October 18, 1999.

Hmmm... ready to go to 13000, maybe...

-- Typhonblue (typhonblue@hotmail.com), October 18, 1999.

My ticker is showing the DOW at +80 at the market close. The NASDAQs took a hit, S+P up a bit, NYSE down a bit. Over all, a slight decrease in wealth. But close enough to level to make me think that Wednesday will be another drop if the markets follow the pattern of the last three weeks.

I guess that a gradual deflation of a bubble is better than a crash.

Why do we follow the DOW if it's only thirty stocks? Is it because they are the most valuable? The DOW seems to be valued at about 5 times the worth of the NASDAQs.

Keep your...

-- eyes_open (best@wishes.not), October 18, 1999.

NASDAQ: -42.42 (-1.55%)

Some rally! <:)=

-- Sysman (y2kboard@yahoo.com), October 18, 1999.

Why can't BOTH sides here admit that they have no idea what is going to happen DAY to DAY in the market in the short term.

Does EITHER side think that the people who have BILLIONS in the market are just going to let it go down without a fight? They have resources that are beyond what most of us can understand. If you were in their shoes would you just sit by and let the market tank overnight?

Did you pay attention to the MARKET today not just DJIA. It was a very bloody day, certainly not something to set up as an exaple of a "good" day. The big picture is red.

With todays rules it it highly unlikely that the market will crash in a day or two. It could take weeks or months (I could make an argument it is well on it way, but there is always the outside chance that it is a normal correction).

Both sides do nothing but lose credibility when you make predictions that fall short. Why not admit you just don't know and enjoy the ride.

-- John Beck (eurisko111@aol.com), October 18, 1999.

I admit it! I don't know what's going to happen and neither do you and you are delusional if you THINK you do. The stocks are like pulling that handle on the slot machine. You know as much about what will happen on the stock market as you know about where those @#*!&^$ wheels on the slots will stop!!! (Think 777) Truth hurts... I know.

-- Diane (DDEsq2002@juno.com), October 18, 1999.

Yes, it was a 'bloody day" today. Lots of red, lots of changes, I bet it was chaotic on the floor

I don't own any stocks, I don't know what it will do, but watching it do it is as fun as watching my chickens......

I *fervently* hope we don't see a big crash. Let's just let the bubble fizzle a little flatter.

-- mushroom (mushroom_bs_too_long@yahoo.com), October 18, 1999.

What happened today did not look like a rally. It looked like a stubborn fight to keep things level with a bump at the end of the day that corresponded to a drop in gold. What does it mean, hell, I am a computer geek not a financial wizard. I can read the graphs and make observations about what I see. I can not tell you what it means. Perhaps it means that someone dumped A BUNCH of gold at about 15:45 and bought a bunch of stock. That is what it looked like but I suppose many other things would have the same effect.

Another thing that happened today and has been happening for nearly a month, technology stocks are falling notably faster than the rest of the market. Perhaps people's faith in technology has been strained by sky high marketing promises that did not pan out.

For sure, nobody can predict where we will be tomorrow. Some things do seem to have an impact. It appears to me more or less in this order, what the FED does, what Greenspan says, what the leading people in any industry say, what the day trader's software tells them to do, superstition.

In looking at the graphs I also saw a strong positive correlation between the price of gold all day and the value of the market. I don't really understand this but I am totally stupid when it comes to the market. Either people bought gold when the market was going up or they sold gold when it was going down (which seems counter-intuitive to me). At the end of the day though (the last hour and a half of trading) gold went down and the value of the market went up.

For my money, of which there is very little, my guess is that someone wanted to open tomorrow with the market in a better position than it did today. A message was sent to the masses.

Just an opinion and practically worthless from the perspective of experience in the field (nil).

-- Michael Erskine (osiris@urbanna.net), October 18, 1999.

New highs for the day 13

New lows for the day 512.

On volume of less then 600 MM shares. Do you see whats happening here? Its called the Plunge Protection Team (PPT) They buy a few of the Dow 30 stocks at the end of trading as 512 stocks today have new lows and ...whammy....we have a wonderful climb for the day when the herd comes home and turns on the TV.

Heck, before long the PPT will be majorityshareholders of the Dow if there not already.

CPI numbers come out tomorrow. Lets see if they will have the same effect as the PPI numbers did Friday.

Good Luck,

Mike

-- flierdude (nospam@Today.com), October 18, 1999.

Nope. Not tomorrow either. Benign cpi numbers. Add another 100. Sorry, so sorry. Let the good times roll! J. Battapaglia is my financial hero.

-- jq public (jqpublic@usa.com), October 18, 1999.

PPT = Plunge Protection Team, aka, CPT = Crash Protection Team, consists of Mr. Peter Fisher, Trading Strategist of the NY FED. He has a team who occupy an office in the NYSE building with a glass window overlooking the trading floor. They have constant contact with their floor sources and execute most of the "stabilizing" trades through Goldman Sachs. As I understand it, it's is legal under an Executive Order established after the 1987 crash. However, KIM, no one knows what they do, what positions they take or the strategy, whether VST, ST, or, I doubt, IT, trades, because the FED has never been audited and there's no law that requires them to report their market activities. As we have , no doubt seen posted here and other places, the FED isn't owned or controlled by the US Gov't so they do what they please, to suit the needs of the FED's owners.

-- flierdude (nospam@spam.none), October 18, 1999.

PPT:

A version of this existed in 1929 as well, as the market was tumbling, banks got together and bought stock simply to "show confidence in the market"

this prolonged the inevitable for a week or so.

-- plonk! (realaddress@hotmail.com), October 18, 1999.

What makes anyone think that the CPI numbers are accurate and true? Numbers can be manipulated as we all know.

-- don't believe (don'tbelieve@don'tbelievee.xcom), October 18, 1999.

The whole "gain" came in the last 45 minutes.....each time the DOW dropped towards the "magic" -1.25% point, it bounced back up (for 45 minutes) then slipped down again.

Sure, the average (as pointed out above) ended up a little positive TODAY - but look at the year-to-date figures: now, both the Dow and S&P are only a 2-3% higher than they were on January 1 - they've nearly wiped out all gains in the whole year.

Since July - there has been slow, steady drop of over 16% in the S&P. This drop has proceded simply, steadily, and over the entire period - it's a broad "hump" in the curve, not a small blip.

In the past 6 days, there has been an increasingly fast drop of 6.4% - not slowed at all by today's 45 minute bounce between 3:00 PM and 4:00PM ......

You figure it out - there won't be a profit at all (from January) in two-three days ....then look at the headlines. If they print them at all.

-- Robert A. Cook, PE (Marietta, GA) (cook.r@csaatl.com), October 18, 1999.

Based on my reading the volatility is due to American inflation which ought not have happened with a global economy. There had been a push by Clinton some time back to expand into South America and everyone had a fit feeling patriotically threatened. In short, the pieces to prevent this volatility may not have lain correctly.

-- Paula (chowbabe@pacbell.net), October 18, 1999.

J.P. Morgan was the leader of that 1929 "PPT".

The stock that rallied the Dow today was (you guessed it) Am erican Express helped out. Dow went up, but overall market was down, and declines beat advances 2-to-1.

Tomorrow we get Consumer Price Index numbers, which are expected to be around 0.4%; anything much above that means inflation is rearing its ugly head. And speaking of inflation, Mr. Greenspan is giving a speech somewhere tomorrow, which no doubt also makes the market nervous.

-- Mac (sneak@lurk.hid), October 18, 1999.

Got a bit too cute with ye olde HTML there - had a link to J.P. Morgan and Co., but it got munched. Suffice it to say that JPM helped the Dow regain its footing today.

-- Mac (sneak@lurk.hid), October 18, 1999.

For more info on PPT, try this link....

http://www.washingtonpost.com/wp-srv/business/daily/feb/26/plunge.htm

-- games (plunge@protect.team), October 18, 1999.

It's called a "short covering rally." A lot of near-term "short- traders" took some profits today when Europe didn't follow through. Lack of follow through signalled to most local traders that there would be no instant fresh rounds of shorting from Europeans, thus, when in momentum stalls, take profits and relax and reassess.

Tomorrow's another day. Oscillators are still wide open yet for further declines to come. I figured the fundamental frenzy was not quite over and it wasn't ... it dropped down, I think about -50 or so on DJIA but whipsawed back and forth with a lot of daytrading shorts trying to knock things down further. Still, I had figured there'd be enough shorting strength to take it down -150 or more before turning back. Everyone must still be worn out from last week.

If CPI is benign, and I suspect it will be PC-sanitized to some extent...then yes, we could see 100 point upswing... that would likely complete the bounce needed for the downswing to resume. But then, what do I know...commodities were my specialty not stocks.

On Gold, Markets kept the charting from somehow showing bearish or bullishness. I didn't figure it could/would get so quiet. Gold is losing more of its luster with such narrowness...but the technicals still have not turned bearish again... Gold could still go either way from here in choppy trading. Same for crude oil too.

Meanwhile, I'm not going out on limbs much anymore. Somebody keeps sawing them off! If it's not those darn bears its the bulls.

-- Dick Moody (dickmoody@yahoo.com), October 18, 1999.

It was VERY obvious to me today in the last couple of hours before close that the DOW in particular was being manipulated to avoid falling below the dreaded and psychologically symbolic 10,000 level. No doubt the Feds had informed the head of the NYSE to use federal funds to support the 30 industrials should they fall below 10,000. Everytime it started edging down into the 9990's it would within minutes spring back up 30 or 40 points. It doesn't make any difference because sooner or later, just as we must obey the laws of physics, we will also have to obey the basic laws of economics. You can't fool mother nature forever.

-- @ (@@@.@), October 18, 1999.

I don't know squat about the market but I was listening to a few of the yuppies on CNBC after the market closed. One of them said banks were buying large chunks of their own stock and could not understand why they would do this before the CPI came out. Comments?

-- (smiley@themet.com), October 18, 1999.

@: You don't have to fool mother nature forever, just the people until around 1/1/00.

-- King of Spain (madrid@aol.cum), October 18, 1999.

Yep KOS, I hear that. If they can manage to prevent a collapse for that long that will be quite a neat trick, I'll be suprised. Of course I am still amazed that so many people are still DGIs and don't even think they need to prepare. It has got to be the phenomena that was brought up on another thread... "cognitive dissonance" was it?

What is happening on the market now is actually what most of us expected, as was discussed on the forum several months ago. They are just playing the market out as long as possible so that the big money players can milk it for all that it's worth before the bottom falls out.

-- @ (@@@.@), October 18, 1999.

Greenspan and Gold On October 14, 1999 Fed Chairman Greenspan delivered an extraordinary warning to bankers about the need to prepare for a finanicial crisis, market crashes and panic. The Fed Chairman's speech, "Measuring Financial Risk in the Twenty-first Century", was extraordinary in several ways :

1) The Fed Chairman sounded the alarm about a real possibility for a collapse of the financial markets. Unlike other Fed-speak, Greenspan's speech was unambiguous...his message clear. 2) The Fed Chairman pointed out that such a collapse can occur anytime...without advance notice (hint, hint...nudge,nudge). Clearly, Greenspan is warning these bankers that the potential for collapse "anytime", includes the coming weeks or months . 3) The Fed Chairman is talking openly about potential "panic" in the markets. 4) The Fed Chairman warns about "a bursting bubble" in the tradition of "Dutch tulip bulbs or Russian equities." 5) The Fed Chairman tells bankers they need to prepare for a systematic failure, across all markets, affecting "even a seemingly well-diversified portfolio."

It is extraordinary for the Fed Chairman to clearly and unambiguosly warn about market crashes, financial collapse and panic. It is extraordinary for the Fed Chairman so publicly to warn banks about the need to prepare for a finanicial crisis, market crash and panic.

What has prompted the Fed Chairman's blunt warning and urgent call for action?

First, the bankers and other financial institutions have not taken sufficient action based on Greenspan's previous warnings. As Greenspan states , "I have called attention to this risk-management challenge in a different context when discussing the roots of the international financial crises of the past two and a half years. My focus has been on the perils of risk management when periodic crises--read sharply rising risk premiums--undermine risk-management structures that fail to address them." At the time of the LTCM debacle, Greenspan issued some warning about risky financial shenanigans, including derivative trading. Greenspan warned that failure of the relatively small LTCM could lead to failure of much larger financial systems. However, after the LTCM crisis, many banks and "risk-management structures" have failed to address Greenspan's warnings.

Secondly, a new crisis, much larger than LTCM, looms before the Fed Chairman. A clue as to nature of this crisis can be found in what Greenspan, on October 14, 1999, tells the bankers to do:

"At a minimum, risk managers need to stress test the assumptions underlying their models and set aside somewhat higher contingency resources--reserves or capital--to cover the losses that will inevitably emerge from time to time when investors suffer a loss of confidence. These reserves will appear almost all the time to be a suboptimal use of capital. So do fire insurance premiums. "

The Fed Chairman wants the bankers and other "risk managers" to "stress test" their assumptions and models. Where have the words "stress test" been used in the past couple of weeks, just before Greenspan uses the same words. Ashanti Goldfields recently suffered a large drop in its stock price despite the sharp rise in gold prices. The drop in Ashanti's stock is due to Ashanti's hedging program. Recent reports indicate someone from Ashanti said that Ashanti had "stess tested" it's hedging program for a $50 rise in gold but not for a $70 rise in gold. Recent reports indicate others invloved in shorting gold or hedging had not "stress tested" their strategy. The bullion bankers are vulnerable to billion dollar losses due to rising gold prices.

The recent run-up in gold prices has caught bullion bakers, derivatives speculators, and other gold shorts in an historic squeeze of monumental proportions. The Fed Chairman, privy to specific information he can not divulge, probably sees a clear risk for financial collapse larger than the LTCM debacle...a collapse which even the Fed with all its tools can not prevent.

While he does not want to divulge company-specific horror stories, the Fed Chairman probably feels compelled to at least warn the general public in some way. And that is a reasonable explanation for his October 14 speech, publicly admonishing the bankers to reduce risk and increase reserves. Greenspan may also be thinking about his "legacy". If the financial markets collapse and some banks fail, the Fed Chairman would be able to say that he warned the banks and the public.

The media justs reports on the effects, but not the content (stark warning) of the October 14 speech. Read Greenspan's blockbuster for yourself. The text of the Oct 14 speech is at:

http://www.bog.frb.fed.us/boarddocs/speeches/1999/19991014.htm

-- nospam (no@spam.spam), October 18, 1999.

DOW +187.43 10392.36 1.84%
NASDAQ +99.94 2788.12 3.72%
S&P 500 +28.12 1289.44 2.23%
BOND 7/32 97 3/16 6.33%
Wednesday's market close

-- Ashton & Leska in Cascadia (allaha@earthlink.net), October 20, 1999.

Set back a little bit and look at a graph of the WHOLE YEAR.

Look at little further back than today's closing prices: the market is only back close to what is was last Thursday: before Friday and Monday's drops. That's not a "rally."

Rigth now - it is only a few percentage over what it was the first week in January, close to what it was in the beginning of April.

Anybody who bought stocks in July has lost (as of now) about 16% of his money. I applaud those who in July, had the foresight to listen and transfer their funds a that time. Perhaps further losses will avoided through the rest of this year - but I am not optimistic. Too many people will follow the "heard."

We don't know where things are going, but the only people who made money this year are those who are getting commissions by getting other people to buy and sell stocks..........

-- Robert A. Cook, PE (Marietta, GA) (cook.r@csaatl.com), October 20, 1999.

Robert:

Isn't also possible that those who made the right picks made money also? Not that these were easy calls, true. But *some* stocks are way above their January levels.

-- Flint (flintc@mindspring.com), October 20, 1999.

Ah - good point, kind sir.

However, let it be noted that the only people who actually "make" money are those who sell their stocks (by definition, a one-time event) at a relative "higher point" in the individual stock price compared to whenit was bought. To avoid taxes (the only other person assured of a profit), almost all of these "sellers" turn the money into a different stock: unless the selling individual safeguards his earnings, it remains only "paper profits."

Thus, the seller made a profit - but ONLY because a second person (or group) thinks the stock will go even higher. The broker, of course, has made 4 sales/buys: the original "buy" to the original owner, the sale from the original owner, the buy of the new owner, and the "replacement buy" of the original owner.

The IRS gets its 38% (?) in the taxes on the broker's commissions, the captical gains on the original owner (1/3 of short-term profits I think, 1/5 of long-term profits), and the (future) capital gains of the new owner.

And the whole Ponzi scheme is based on the "hope" of the new owner to see even higher prices somewhat later and sell to a "newer" buyer. The real value of the company reprpesented by the "stock" is lost in hopes of short-term greed.

IF everybody concerned were truly looking very long term, and would intend to keep their investments steady for 10-25 years based on future sales, increased revenue over the long term, etc. - all the things NOT being mentioned in the financial press that "analyze" the latest quarterly statement, then y2k would not be a threat to the market. People would realize that the possible recession/depression/bump-in-the road impact of y2k would be recovered from and long-term investments reamin valuable.

But, they won't do this. Instead they would tend to follow the "heard" - as today, when one statement from IBM threw a 200 point drop in the Dow average. For no valid reason at all.

-- Robert A. Cook, PE (Marietta, GA) (cook.r@csaatl.com), October 21, 1999.