Dow Down Below 12000

[Dark_Horse_Rider]

Way down down down

[Bigvick]

It rebounded(at the the time of this post the dow is up), The only reason it tanked was because of the jobs report..

[WilliamC]

I'll be cashing out a retirement account in a stock fund next week.

Putting the money into precious metals.

Should have done it last summer when I first started thinking about it.

[billjarrett]

I'll be cashing out a retirement account in a stock fund next week.

Putting the money into precious metals.

Should have done it last summer when I first started thinking about it.

Wish I had that option. My cashing out of 401k would be a pretty big tax hit, and we aren't offered any kind of commodities fund in it. I took everything out of stocks in December near the high (about a week before it peaked, but still a good place to do it) and moved 90% of it into money market, general account, and bonds. Kept 10% out as my "play money" and have it invested in international in emerging markets. So far, I'm only down about $400-500 for the last 3 months which is better than most people have right now.

[Truth Warrior]

What is the next major support level below 12,000?

[IChooseLiberty]

Wish I had that option. My cashing out of 401k would be a pretty big tax hit, and we aren't offered any kind of commodities fund in it. I took everything out of stocks in December near the high (about a week before it peaked, but still a good place to do it) and moved 90% of it into money market, general account, and bonds. Kept 10% out as my "play money" and have it invested in international in emerging markets. So far, I'm only down about $400-500 for the last 3 months which is better than most people have right now.

I'm in the same boat and luckily saw the writing in the sand back at the peak.

However, we do have an option :)

I'm going to open a personal IRA. I'll rollover funds from my 401k to my IRA because they have MUCH better funds to invest in during a bear market/dying currency.

The IRA I'm looking at has some awesome funds performing exceptionally well.

Some fund classes I'm looking to invest in:

International Bond Funds performing ~10% (bonds based on foreign currencies)
Treasury Inflation Protected Security Funds performing ~9%
Gold-Oriented Funds performing ~20% (invests in gold mining/production)

I'm also interested in the RICI (Roger's International Commodity Index) which has been performing very well over the last 8 years @ ~12%

[Cleaner44]

I have been making money using inverse funds. They go up as the market goes down. This is part of my plan for a while as I expect the market to decline for at least 1 year and likely much longer. If you can shift money from a 401k into an IRA you will have many more options to invest in.

http://www.profunds.com/

[WilliamC]

Wish I had that option. My cashing out of 401k would be a pretty big tax hit, and we aren't offered any kind of commodities fund in it. I took everything out of stocks in December near the high (about a week before it peaked, but still a good place to do it) and moved 90% of it into money market, general account, and bonds. Kept 10% out as my "play money" and have it invested in international in emerging markets. So far, I'm only down about $400-500 for the last 3 months which is better than most people have right now.

I'm going to take the penalty and tax hit but I don't care.

Had I done this last August when I first had the chance I'd have already recouped my losses.

I don't see things getting any better for stocks or any worse for metals over the next few years, and I want my money where I can use it if needed, not tied up for the next 25 years in a retirement account that probably won't exist when I'm retirement age.

[Acala]

I bailed out of my IRAs also. First my Roth, since only the (minimal) gains would be taxed on top of the ten percent penalty. I figured that since we are losing ten percent annually to inflation (at leaste), I might as well lose ten percent and get my money back in the bargain. I converted my traditional IRA to gold bullion.

Later, I bailed out of the traditional IRA because I am afraid that the government will confiscate those assets. Besides, I don't trust that those jokers really hold the coins for me and I would never be able to get them out as gold. They require you to convert to FRN toilet paper first and that could be a disaster at some point if, for example, the government pegs the crappy dollar to gold by force. I will take a tax hit there, but better that than lose it all.

I still have a pension plan I can't get to, so I am not ALL out. I figure the pension plan will be worthless.

[bluemarkets]

What is the next major support level below 12,000?

it's the low made back in January 11500 ... if that breaks who knows where the next stop will be. Most likely 10,000 will have a lot of buyers waiting.

if we can close several days under 12000, pretty significant, as that was a minor support area...


about IRA's, you can roll those over into a self-directed one and buy precious metals, foreign currencies, whatever, just dont buy equities, at least not US for the time being.

[Indy Vidual]

What is the next major support level below 12,000?

~7,800 :eek:
(Post 911)
The other numbers are more 'minor.'

[kyleAF]

Remember that a sizable portion of the increases in the stock market values have been false increases.... Inflation, over-leveraging, etc. And it's all just digital capital that is exchanged. Get your digital capital into safer media before this one goes Dodo.

It is clear that our actual net WEALTH in this country has not been increasing at all for decades!! One can't be wealthy while one is in debt up to one's ears... (duh!) :rolleyes: What's true for a household is true for a country... despite Joe Economist spinning otherwise.

[DrCap]

The PPT seemed to be asleep this afternoon as they forgot to step in and save the day... I'm sitting on the sidelines as much as I can for this game, maybe I'll play next season but for now I'm out.

[buffalokid777]

I'll be cashing out a retirement account in a stock fund next week.

Putting the money into precious metals.

Should have done it last summer when I first started thinking about it.

better late than never...

I recommended to one of my friends they cash out their 401K two and a half years ago and put it in precious metals......

their 401K was worth $16,000 then, $19,000 now....if they followed my advice, their 401K would be worth nearly $35,000......oh well.....my advice was right....the loss is theirs........I was smart enough to take advantage of the advice I gave them......

[OptionsTrader]

Some food for thought, a chart of the S&P priced in oil:

A 52% drop in 15 months

There willl come a time when it will be obvious that we were oversold, but to pick that bottom is a difficult and dangerous task that should be avoided.

FYI, there are many rumors of a 50 basis point (0.5%) cut in the fed funds target rate in March, taking the target from 3% to 2.5%. FWIW.

http://i28.tinypic.com/f1b3th.png

Fed funds target:

http://i29.tinypic.com/2irs16x.jpg

[jonahtrainer]

There willl come a time when it will be obvious that we were oversold, but to pick that bottom is a difficult and dangerous task that should be avoided.

Picking a bottom is easy. Gold, and oil because of the r-squared relationship, is just as effective at communicating value (http://www.runtogold.com) today as it was 10, 100 or 500 years ago. Just look at the chart with its historic resistance levels, add in a little bit for extra volatility from the amplified signals that result from central banking. Presto, .25-3 ounces for the DOW is the bottom.

http://www.runtogold.com/Run_To_Gold/Run_To_Gold_files/turk_chart1.jpg

http://www.runtogold.com/Run_To_Gold/Run_To_Gold_files/alert_2008-01-02c.png

[OptionsTrader]

Picking a bottom is easy
Foolish statement. But good luck with that.

[jonahtrainer]

Foolish statement. But good luck with that.

If by luck you mean success or failure apparently brought by chance rather than through one's own actions then I think you are sadly mistaken. The longer one is in the markets and the more money they make the more it appears luck has nothing to do with success or failure.

Gold has to go to at least $1,650 to balance the US's balance sheet. The value of the US$ is to be calculated in the same way as the value of a common share of stock.

One outward signal of decline, that is beginning to bloom recently, are declining corporate profits that will balloon the federal (as well as state and local) budget deficit. With the trade deficit this will increase the current account deficit as capital flees the US. If the US seeks financing within then interest rates must rise (to keep the US$ equal) contracting business activity, earnings and the DOW. As Bernie has only been lowering rates this is accelerating the cycle. What a vicious cycle. As the US$ falls gold rises and the net effect will be a decrease in the DOW/GOLD ratio.

When looking at a multi-decade chart the trend is your friend. Even the most basic technical analysis will suffice. That chart is from Oct 2007. Imagine an account controlled by someone who just wanted to risk about $5k to continue riding the trend. With $10k cash and going short 4 YM and long 1 ZG and rolling these over until today about 5 months later the account is worth $45k.

Luck, sure ..... maybe for daytraders (which is extremely fun by the way).

[AceNZ]

There willl come a time when it will be obvious that we were oversold, but to pick that bottom is a difficult and dangerous task that should be avoided.

I would suggest that if you're a long-term investor, then there's no need to pick the exact bottom. Just getting close will be good enough. If you're a trader, though, as your alias implies, then I completely agree with you.



FYI, there are many rumors of a 50 basis point (0.5%) cut in the fed funds target rate in March, taking the target from 3% to 2.5%. FWIW.

Based on Fed Funds futures, there is currently a probability of around 55% for 50 basis point rate cut vs. about 45% for something more than that (75 or 100 points).


http://www.clevelandfed.org/research/Policy/fedfunds/2008%5CMarch%5C6%5Cimage1.gif

[jclay2]

I think Fed head Bernanke, aka the great beard of wisdom, is fixed on having high inflation and a recession. I bet the dow is going to test low 11,000's soon.

[RSLudlum]

I hate to take this thread on a tangent but i remember hearing Schiff talking about gold vs. the dow (here ~10min mark (http://media.libsyn.com/media/mickelson/mickelson-2008-01-28.mp3)) and I was downright confused about what he was talking about buying the dow in terms of Gold. Can anyone explain this and how it applies now?

[AceNZ]

I hate to take this thread on a tangent but i remember hearing Schiff talking about gold vs. the dow (here ~10min mark (http://media.libsyn.com/media/mickelson/mickelson-2008-01-28.mp3)) and I was downright confused about what he was talking about buying the dow in terms of Gold. Can anyone explain this and how it applies now?

I haven't listen to that particular clip, but I know that Schiff often talks about how many ounces of gold it takes to buy the Dow.

If you take the Dow Jones Industrial Average and divide it by the current price of gold, you come up with a ratio (currently about 12.2:1). What Schiff is saying is that ratio is trending down, and has historically been as low as 1:1. In other words, the price of gold has been equal to the DJIA -- and that's likely to happen again.


http://ns9.12titans.net/gold-stock-sm.jpg