31 replies to this topic

[Data]

"He basically makes a case the housing is approacing a turning point the the LT data is now beginning to show a light at the end of the tunnel. Some areas of the country could well bottom by the end of this year. " It's not difficult to fathom that housing activity could bottom before housing prices. That's what happened in the 90's. There were several short-term recoveries in housing before the final bottom in 1996. Once the foreclosure crisis is over, interest rates and building activity should start to recover. Higher interest rates and the supply of cheaper new homes knocked home prices down in the mid-90s.

[NAV]

Jobs have NOTHING to do with the stock market. They're always lagging anyway.

I agree.

So, while technicals lead (say, why didn't the market get creamed on Friday?), now is the time to watch out for hints of good news that folks can hang their hats on. It matters now. It won't when things are looking better.

No the technicals are not leading. At least not yet. We have a broken daily and hourly. First let's repair the hourly and then there's some hope for the ST.

Why didn't we break down on Friday ? - That does not mean anything to me other than that we have an incomplete consolidation. We have had 4 days of sideways chop to counter that one day decline of 1/20. That's hardly a picture of strength.

[ogm]

MArk, I think you're overestimating the amount of cash that is coming and the offset that outflows are having. And I also think you're overestimating the greed vs fear at this point. Huge numbers of people were burnt by the market over the past 10 year. A large number of babyboomer are approaching retirement and have just lost half of their savings in housing and stocks. I don't think they are willing to take as much risk as they used to. The "long term investing" theory is a bust. That the "stocks always go up" theory is a bust. The current generation of 35-45 year olds who are usualy the largest contributors is smaller. They don't have any savings to speak off. Coroprations are cutting 401k contributions. People are starting to feel like the whole 401k thing is a scam. The investment companies lobbied the governkment to create it to suck people into the market and people have lost a lot of money now. The whole psychology is changing. I think that the greed you're counting on will be replaced by prudence and savings for probably a whole generation. Sure the OPM managers can move this market up and down a bit for a few days. But they are also under pressure. The whole world has changed.

Edited by ogm, 26 January 2009 - 11:25 AM.

[tommyt]

Mark, traders game is all it is now...we take out SPX 940ish, then maybe it changes a bit...but more like SPX 1050-1100 before any real change. We have had a number of 10%-25% rallies from low points in this bear, no change...yet.

[OEXCHAOS]

That's an interesting theory, but I think it's wrong. I think that enough folks have lived through 1987 and 2002 who will move money out of MM's in droves when they think it's safe to. There are lots of managers who will as well. There's no other choice for them, at this point. Maybe later (probably later, imo) when rates go back up, they'll pull away. I'm not seeing happy days, but I'm seeing a lot of upside that's virtually a lock unless the legion of Bears is right. Mark

[CHAx]

A good friend of mine who buys foreclosed properties here in the Midwest.... Mostly 4 to 8 unit properties told me this last night over a few beers: 2 years ago when the banks started unloading rental properties at deep discounts I was usually the only bidder because of the sheer number of properties available. Since December I haven't had one offer accepted but interestingly.... The prices aren't rising much. He believes a bid floor now exists as inventory of foreclosed properties has been significantly reduced. He also said there is significant reduction in high quality units in foreclosure. By no means does he think the housing problems are over, but that the panic in this area of the rental market is over.

[selecto]

If I had a whole bunch of cash, and wasn't a day drader, and wanted to spend it, excuse me, invest it, here is what I would do:

First, I'd watch for the 20 to turn up. Buy a couple.
Then, I'd watch to see if the 50 turned up. Buy a couple more.
Then I'd watch to see if the 200 turned up. Buy the rest.

Ain't none of that yet.

Edited by selecto, 26 January 2009 - 11:40 AM.

[OEXCHAOS]

Selecto, we're still in a Bear Market. That's for sure, at least by most useful measures. Mark

[tommyt]

[quote name='CHAx' date='Jan 26 2009, 08:38 AM' post='429567']
A good friend of mine who buys foreclosed properties here in the Midwest.... Mostly 4 to 8 unit properties told me this last night over a few beers:

2 years ago when the banks started unloading rental properties at deep discounts I was usually the only bidder because of the sheer number of properties available. Since December I haven't had one offer accepted but interestingly.... The prices aren't rising much. He believes a bid floor now exists as inventory of foreclosed properties has been significantly reduced. He also said there is significant reduction in high quality units in foreclosure. By no means does he think the housing problems are over, but that the panic in this area of the rental market is over.


something us old folks remember...just because a mkt stops going down...doesn't mean it has to go right back up. It can be dead in a low end range for years.

[ogm]

something us old folks remember...just because a mkt stops going down...doesn't mean it has to go right back up. It can be dead in a low end range for years.

Exactly. They were showing the chart of the banking index after 1929 crash on CNBC the other day. It crashed and it stayed down... for 25 years. Didn't do a thing except for some small gyrations. A whole generation has passed before greed returned.

Edited by ogm, 26 January 2009 - 11:52 AM.