nornerator

As some of you are aware of, the DJIA (Dow Jones Industrial Average) fell 297.81points or (-3.79%) to the value of 7552.6. The DJIA is typically a good indicator of the market as a whole.

The lowest closing value the DJIA has had since the big crash in October was 7552.29 on November 20th.

As we all know, the stock market has very little to do with reality and is mostly controlled by psychology and the Plunge Protection Team (set up by Ronald Reagan).

On November 21st the price shot up to 8046, presumably many many people bought a lot of stock on this day because they considered 7552.29 to be a bargain. Now it is likely that these people had already lost money in the market after the big crash and were hoping to make up for it by re-investing when they thought the price was below the "bottom"

It is likely that these people who have already lost considerable amounts of money do not want to risk losing more. If this is the case it would make sense for them to SELL their stock when it approaches the price they bought it at if they think the market is going to continue to go down.

If 7552.29 was the price they bought it at
And 7552.60 is the price it is right now

I can see tomorrow going two ways in the stock market.

1) People think the stock is oversold and a bargain so they buy it up and the price jumps up a couple hundred points
2) The people who brought it up on November 21st jump ship and the stock market falls a couple hundred points.

If scenario 2 happens the stock market may continue to plummet for several days until people feel it is a bargain again.

Lets wait and see shall we?

ColdSlaw7

Obama = Jimmy Carter 2.0

But seriously, psychology has a lot to do with the economy, believe it or not. Since Democrats have been talking down the economy for...well, I guess since late 2007, people have steadily been more and more scared and less prone to spend their money. They took what was in reality becoming a recession, and inflated it simply by using a common political scare tactic. Talking down the economy is the best way to get elected, though.

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FunkySkunky

Psychology does have a lot to do with the economy, though the real scare came from the sub-prime crisis/crash of October. The media just turned it into a frenzy without much help from politicians. In fact, virtually every person on Capital Hill thinks it's "good" to spend money to "stimulate" the economy when in reality the problem is that we have already overspent. Politicians would continue to borrow to spend indefinitely if we let them. Fortunately, the world is probably smarter than that and will eventually refuse to buy our debt. Eventually the balancing act comes to an end, and it will be a spectacular domino effect. The sooner the better, otherwise a long, drawn-out depression will spark revolution in this country, along with many others.

As for the short term market outlook: I think the next few weeks hold a new established bottom for the main market indicators like the DJIA and S&P 500. I think the Dow will likely touch numbers in the 6200 to 6500 range. The S&P might fare better, only for representing a wider swath of the market, holding up at 600 to 650. I think it's only the beginning though. This stimulus could boost the short term and rally the market indicators for a couple months but the ensuing inflationary consequences won't be worth putting that much cash into the system for short term benefit.

We can't spend our way out of a spending problem. We can't continue to consume 75 percent of the planet's natural resources while the rest of the world scrapes by on our scraps. Unfortunately, asking us to stop consuming is like asking an alcoholic to quit cold turkey in a bar. The world is our bar and all of our friends continue to buy us drinks as we stumble into the bathroom, already drunk as fuck. The United States has an addiction and is being enabled by other countries and sooner or later it will catch up to us. Either our friends are going to ask where their drinks and money are, or we're going to get alcohol poisoning; we can reciprocate and choose to foot the bill now, or die from our drug of choice. It's that simple.

"I think you've had enough, buddy..."

"I'll tell you when I've had enough!!"

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FakeBoobsRule

Nornerator,

I made some moves at the end of the market today. I won't say if I went long or short until this week plays out and maybe I can say I made something on a short term investment.
Hopefully it'll end with a

There's a lot of truth to that. They should be realistic but not so the end is near.

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Vapist

I would have to disagree. George Bush wrecked our economy. Obama is trying to fix it. Good luck to him.

marcusJay

The seeds for this economic crisis began during Jimmy Carters administration with a little piece of crappy legislation called the Community Reinvestment Act which required lenders to loan money to people in economically distressed areas. People who can't afford to buy a house shouldn't be given a loan because they can't afford it, its that simple. The bankers knew that but the politicians didn't.

FunkySkunky

Do you even know what Bush did as far as the economy is concerned? Do you know that what Bush did is virtually identical to what Obama just did? Did you know that Bush's "stimulus plan" totaled 200 Billion Dollars? But more importantly, do you know that Obama's stimulus plan is worth almost 800 Billion (without accounting for interest and future inflation)? By the way, about 10 months after Bush's stimulus, the market showed it's true form and dropped 35 percent on average... what do you think Obama's stimulus plan (about 4 times the size) will accomplish? My guess is some pretty staggering inflation and perhaps a run on the bond market... and don't tell me it's not impossible.

Anyway, Obama and Bush: They are the same person. They always will be, as long as we are suckered into accepting the lesser of two evils to become president. Technically, there were probably more than a million people eligible to become President of United States of America in 2008 and EVERY single news source that covered "Decision 08" told us that there were two presidential candidates: a Democrat and a Republican. The only reason one of two men actually did win is because we were convinced that there were just two candidates and that one of these candidates was the right choice for the majority of Americans. This leaves most of America to make a simple distinction between being Republican and being Democrat. Realistically speaking these two political entities have the same goals; that is to control the Congress and the executive office. Democrats and Republicans are just about the same thing at this point, they want the same things just in different degrees of intensity. Obama will bring no change, in fact he will do the same things that Bush did, EXCEPT BIGGER. And he has already proven this. In three weeks, he has already spent a trillion taxpayer dollars, enabled by a dem controlled congress, he has authorized up to 17,000 more troops to be deployed to Afghanistan (don't believe me? More Than 17,000 Troops Headed to Afghanistan - Presidential Politics | Political News - FOXNews.com)

At any rate, Obama will prove to be quite a dictator I think. His own personal ideas have already slipped through Congress twice because he uses fear ("An economic crisis could turn into catastrophe... if we don't pass this bill.") and he uses broad, sweeping language to sound optimistic about the "solution" ("We need bold, swift action..."). Get a grip man, Obama and his administration are about to make the problems of GWB look like child's play.

greenmonster2420

Do you know what happens when there are more than two major parties? The winner doesn't even have a majority of the population's vote. This allows extremists to take over. Maybe you could see the election of 1933 in German history, my friend. The Nazi's took power with 30% of the vote.

And further more, Bush and Obama are nothing alike. First, Bush is incompetent and had no idea what was going on. At least when Obama speaks to the nation he addresses the problems and articulates an action.

Did you really think this would be fixed in a month? Give the man a break. ALL the problems we have right now are left from the Bush administration, you cannot deny that.

I'm just happy we are presented with a chance to change, unite, and possibly be respected around the world. Of course there will always be haters, but Obama has brought millions of Americans together for a common cause.

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FunkySkunky

First, there have been many elections in which the popular vote and the result did not match. Simply having a president in office does not necessarily mean that the majority of Americans wanted him, it just means that he won more power based on the electoral college. Therefore, it is viable and, in my opinion, desirable, to have NO PARTY distinctions at all.

Second, Obama actually does articulate well and he does know what's going on... but according to his track record (which is virtually non-existent) he doesn't seem prone to make any real "changes". Just one example of his previous endeavors would be a housing and employment overhaul of a downtrodden neighborhood in the suburbs of Chicago; After two years of effort, nothing was accomplished and those streets lay impoverished to this day. Along with that, he voted an astounding 130 times as "present" on the floor of the Senate. Voting "present" assumes neutrality and requires neither speaking, nor even making a decision on the topic at hand. If you want "change" it doesn't seem that Obama has been up to the task from the start of his political career. What makes you think the hardest job in the world is going to do to this man? I think it's going to wear him out.

I didn't ever say it would be fixed in a month, though I do think I used proper judgement in putting this "stimulus" bill under the microscope. As being his first "major legislative victory" (as hailed by virtually every media source I can find), it doesn't seem to be the "change we can believe in" at all. In fact, like I already said, this stimulus is EXACTLY what Bush did last year, except Obama multiplied it four-fold. Change? Or more spending for government power?

And as for the language that Obama uses like "hope", "change" and "unity", words that you used also... what does that really mean? WHAT change? WHY hope? and WHO exactly are we uniting with? It's all empty rhetoric. Words attached to emotion to evoke a response. Emptier than the words of Adolf Hitler himself. Speaking of which, I am surprised that you used the election of 1933 as a foothold against my argument, since we all know that Hitler was beloved by the people of Germany (especially the youth, mind you) for some time before he revealed his sinister intentions. The Nazis, as you have mentioned, "came to power" through an electoral process. Makes you wonder what we have voted for in this country, doesn't it?

Additionally, the state of this country looks virtually identical to that of Germany in 1933: Germany just lost a war for which they were required to pay massive debts (we're running a deficit to fund Iraq/Afghanistan. Though our situation is worse since we already owe the world trillions), they were a country in economic turmoil (as are we) and they were on the cusp of an historic election, the results of which would determine the fate of most of the world (sound familiar?). Germany expected Adolf Hitler to be the "saving grace" of the people and it looks like we have allowed Obama's cult of personality to seep into our very psyches, as Hitler's invaded the minds of Germany pre-World War II. Now what can Obama do with this persona that he has evoked? Just about fucking anything. "YES WE CAN" is starting to sound a whole lot more like "HEIL HITLER", don't you think?

greenmonster2420

I love when the stock market plummets. I'm in to make a few grand by next week.