Have we finally hit the bottom?
Does this latest rally mean the market has hit its lows? And, where do we go from here?
Answers
221 points
BryanPerry answered one year ago …
Whether the market can sustain this move up is dependent upon whether Washington keeps putting out historic headlines targeting more problem areas at the expense of our grandchildren's future. If and when the parade of bailout news subsides, even for a week, I feel that the market will pull back and retest Dow 8,000, S&P 800 and Nasdaq 1,350 without too much trouble. If it holds that retest, we just might have a real bottom.
That being said, I think once the numbers are in from consumers following Black Friday, the market will take a step or two back. Our ChangeWave Alliance surveys measuring anticipated holiday spending show a steep decline in the consumer's plan for holiday purchases.
If the market turns its attention from Washington to Main Street, then a short pullback for stocks makes perfect sense.
2222 points
readytoretire answered one year ago …
And the part about where we go from here. I am afraid that we will be here for a while. There has been too much of the economy destroyed to be a quick recovery. It will take a while and I don't think it will expand as fast due to the lower leverage that will be in play going forward.
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3963 points
MNSL answered one year ago …
Some analysts and top investors believe sector oriented bull markets in the next 05 years instead of broad based bull market.
I agree with them. Even now few sectors and some stocks will outperform markets in the next four months to 12 months.
For some stocks already bottom has reached and firm base has formed for those stocks. These stocks will appreciate further irrespective of type of economy.
Prices for some stocks will stagnate and prices of some stocks in some sectors will gradually come down further. New market leaders will emerge sooner than later. They will not have any competitions.
These cash rich companies with continuous demand for their products not only will outperform market in the next 12 months but also in the next decade. In addition some companies in some countries have their own domestic market for their products and they do not want rely on exports.
Global investors will have advantage over others in the next decade thanks to present economic mess.
Now some sectors such as technology sector have become matured and have overinvested. Therefore, I do not think great returns in this sector except few viable companies .Some underinvested sectors also will outperform market in the next 18 months and next decade.
2082 points
alanj answered one year ago …
It's just too early to tell. If the DOW and S&P does not break through it's recent low with a lot of strength and or holds above it's recent low for several month's then yes I'd say we have established the bottom. But having small rallies during that time can be expected. The reason for it's current rally is the markets are simply oversold and it was ready for a rally.
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731 points
thinker70 answered one year ago …
In a word, NO, we have not hit bottom, not by a long shot.
The main reason people do not understand what is going on is because they have never studied the Federal Reserve system created in 1913! What we are experiencing is the typical implosion of any PYRAMID that requires the continuous INPUT of an exponential number of new players.
In the case, of our fractional reserve monetary system , it means that the DEBT PYRAMID has become so large that the interest, (which is bled off by the central banking system) can no longer be fully serviced so we have DELEVERAGING (forced selling) and divestature of assets bought on credit that results in lower prices, whether it be real estate, stocks, or even automobiles. The more foeclosures, calls on margin, repossesions there are, the further DOWN prices plunge and the more jobs are lost! The problem for the banks is one of liquidity AND viable collateral to lend against.
This deleveraging process is far from over, the NEXT tranche of failures will probably be the Insurance companies whose investment in stocks have fallien precipitously, to say nothing of mutual and hedge funds, and then as job losses increase, the NEXT problem area becomes the credit card industry. Unless the SYSTEM is changed to inject some HONEST MONEY with intrinsic value, (read gold and silver) the efforts of the Fed to stem the tide by simply issuing MORE of what caused the problem in the first place, will only delay the finsl deflationary blowoff.
You can no more solve this financial crisis with more credit (read DEBT) then you can sober up a falling down drunk by offering him anothr quart of whiskey!
