DOW & NASDAQ in record territory again!

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What happened to the crash? With three days to go, you'd think the herd would be bailing out. Will they really wait till Friday to bail out?

-- (Here@today.com), December 28, 1999

Answers

Yes.

-- (gone@tomorrow.com), December 28, 1999.

Maybe.

-- (TrollPatrol@sheesh.now), December 28, 1999.

No crash Friday either. In fact, Friday will most likely be a record day on the Nasdaq and on the Dow. I'm sorry to say that the best way to predict what is going to happen is to predict in the opposite direction of what you hear from the gloomiest members of the forum.

-- rcwhite (cw5410@netscape.net), December 28, 1999.

If one is to believe the mass-media (and most do, which is why I so despise mass-media's "spin" and "lies by omission"), Y2K is now less of a problem then originally thought. This would be considered good news on Wall Street.

If indeed Y2K is still the threat we think it is (most of us, anyway), it is still hard to blame folks for being deceived by the mass-media. While subtle, it is one of the most powerful influences in history.

-- Anonymous999 (Anonymous999@Anonymous999.xxx), December 28, 1999.


More losing stocks on both the NYSE and NASDAQ at this time. This market is in far worse shape than October of 1929.

12:23 EST

Ray

-- Ray (ray@totacc.com), December 28, 1999.



Ray, that is what I thought too. More losers than winners. It's really deceiving.

-- (Here@today.com), December 28, 1999.

The higher they fly, the farther they will fall. Every bull market is followed by a bear market and the bigger the bull, the bigger the bear.

-- cody (cody@y2ksurvive.com), December 28, 1999.

Ray, others

No offense, but you don't seem to understand what the advance/decline ratio means.. DON'T look for the state of the economy in the ADVANCE/DECLINE line.

Many companies like Lockheed Martin (Very big, very rich company) have simply stopped growing. They have succeeded in their market place and can grow no more. The stock for a company like this does not rocket up, even though the company is sound.

That advance/decline info does not mean a thing!

There have always been a smaller pool of winning, growing companies than companies that just sit there and exist. The trick is to have your money in the growing companies.

Bryce

-- Bryce (bryce@nospam.com), December 28, 1999.


Ray: Please explain your post, "more losers than winners". IF this is so, then why is the market at record highs? I'm not doubting you, I just don't understand. I, too, thought the market would come tumbling down this week but, at this rate, I don't see that happening.

-- Familyman (prepare@home.com), December 28, 1999.

Bryce: yes, but you are overlooking the fact that the run up is almost purely speculative. The more air in the balloon, the more noise it makes when it finally pops.

-- a (a@a.a), December 28, 1999.


Bryce, SSSHHHH,your giving up the secret! This is great,huh? Up about $4100.00 today so far. Will be cashing out shortly. player.

-- player (in@damaket.com), December 28, 1999.

Family Man: I think the confusion here is that you are mistaking the performance of the Dow Jones Industrial Average, which is, literally, the average of a few stocks picked from the thousands that are traded on the markets, with the overall market of those thousands of stocks. The Dow (and the NASDAQ, SP etc) all measure performance of only a few stocks, which are (supposedly) an indicator of the overall performance of the market. If some of those stocks are performing amazingly well, the Dow will rise, even if the others are not doing much or even dropping slightly in price.(Ever wonder why the Dow suddenly dropped several big names just recently, and replaced them with higher-tech stocks? Think about why someone might want the market to be seen as continually rising.) Thus, even though stocks like Microsoft are doing well, and the Dow keeps climbing, it as essentially ceased to be an accurate picture of the market. The vast majority of stocks are not measured in any of the indices, and have been dropping in price steadily for at least a year. You don't see this, because the news only reports the indices' numbers, since they are an easy way for the layman to see what the market "did" that day. I read somewhere once that not even the real insiders who have been onthe market floor for years really understand how the stock market functions. So there is no way the news would try to explain to the average viewer all the factors that acted on the market in any given day. They just give the nice, neat index numbers, and the average viewer sucks it up as gospel, even though the index numbers in no way reflect the actual value of the market. Right now, especially, with the .com stocks doing such ridiculous things, it is easy for the talking heads to say the market is strong. But if you look at how stocks that represent real economic presences are doing, things look much less rosy. Caterpillar, for instance, is a stock that truly represents how the world is doing. If there aren't any big projects that year, Cat won't sell as many machines. Their business represents billions of dollars of real assets that you can stub your toe on if you kick them. They haven't done so well this year. Internet stocks have no true value, and no hope of profit anytime soon. They are hyped as the next big thing, and thousands of people who want to discover the next Microsoft have jumped all over them hoping that years down the road their investment will pay off. Thus, the price of these stocks balloons as capital flows in. The only ones who will get rich are the owners, who if they are smart will exercise their stock options, and bank their millions away now. Then, in a little while, when everyone realizes that they aren't going to become instant milionaires, they will move away from the stocks and their price will stabilize. This assumes the bubble doesn't pop sooner. Sorry for the ramble. I think the answer to your q is in here somewhere.

Jes' Thinkin'...

PS I in no way claim to be a financial expert, and everything I just said may be totally off-base. FWIW

-- Little Pig (littlepig@brickhouse.com), December 28, 1999.


Little Pig,

I don't really agree with your statement about the Dow being that much out of wack.

It was right to add Microsoft to the Dow and remove Chevron (I think?). High techs belong in the dow, as they are the things that are driving the economy. Ignoring them in any index would be wrong in my opinion.

If you want a broader index that covers more companies, try the S&P 500 or the Russel 2000.

-- Bryce (bryce@nospam.com), December 28, 1999.


A soft landing looks out of the question at this point (Y2K aside). By my math, the market would have to trade sideways during another decade of prosperity to bring the market to reasonable valuations. Ain't gonna happen. It's painful for us who are capitalists and benefitted from the bull market to leave so much on the table. However, if you ever reach a point where you don't have what it takes to leave money on the table, you are facing an addiction. Next year will be going "cold turkey".

BTW, did anybody catch those three older gentlemen on Cavuto (Volcker (SP?), the ex-CEO of Goldman Sachs, and a third prominent looking guy whose name eludes me) They all agreed the market was nuts. One guy (I think it was Volcker), when asked to predict the dominant event in the year 2000, said that it would be the political and monetary disaster resulting from a market crash. These old guys have been around the block a few times.

-- Dave (aaa@aaa.com), December 28, 1999.


A very weak A/D line and weak new highs/new lows over an extended period of time always signal a bear market. However, these are not precise timimg tools and the conditions can prevail for many months before the bear market begins. These indicators are now the weakest they have ever been. It is only a matter of time until the bear market begins. In my opinion, it is only a matter of days.

-- Dave (dannco@hotmail.com), December 28, 1999.


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