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Thread: Why Is DOW Holding Up So Well Compared To Foreign Indexes?

  1. #1

    Why Is DOW Holding Up So Well Compared To Foreign Indexes?

    Nikkei was down 6%, Hang Seng lost over 12%, and the Dow is unchanged? The DOW also held up much better than overseas markets on Friday as well.

    WTF?



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  3. #2
    Could it be 'manipulation'?

  4. #3
    Maybe it has to do with the upcoming interest rate cuts that we "absolutely need" (as if lower interest rates will solve anything and as if all the economic problems were caused by interest rates being "far too high") in order to "end this recession" and "get consumers spending" (as if more consumer spending will solve anything) and "get banks to lend and people to take out loans" (as if forcing people to take out loans they don't need will solve anything).

    It might also have to do with OPEC production cuts, which supposedly "help oil company stocks".

  5. #4
    *waits for conspiracy theories*

    You know somewhere inbetween they're trying to make more money before they make a one world Government, or hey I know a better one - PPT is doing it.

    I swear evil people...our market needs to collapse so my gold will lead me to power!...




    *sarcasm*...but that is probably what most people want to hear around here
    Privatize the profits, socialize the losses. - Government at its best.

  6. #5
    Foreign Markets have been a lot more honest with the earnings and projections. The Dow seems to be reliant upon misinformation. For example, earlier this year, they spread the doom and gloom and forecast ridiculously low earnings. This causes the stock price to go down below what they should. Once the earnings come out and the "losses" aren't as bad as they thought they would be, you get a huge rally and they proclaim the market is no on the upswing. They've been doing this ever since the Dow hit 14k. The Dow is poised to drop to around 5k. But Americans have been clinging to the notion that it will return to 14k soon. Meanwhile, the world doesn't try to lie to themselves so they sleep better at night.

  7. #6
    Quote Originally Posted by icon124 View Post
    *waits for conspiracy theories*

    You know somewhere inbetween they're trying to make more money before they make a one world Government, or hey I know a better one - PPT is doing it.

    I swear evil people...our market needs to collapse so my gold will lead me to power!...




    *sarcasm*...but that is probably what most people want to hear around here
    Oh come on, the glass is one quarter full.

  8. #7
    The market anticipates a rate cut. I believe one of the asian markets ended up last night due to a rate cut as well.

  9. #8
    Our PPT is better than their PPT!
    When all else fails,
    there's always
    www.escapeartist.com



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  11. #9
    Watch for the indexes' p/e ratio to hit ~5 before rebounding. DJIA prediction before rebound: 3500!
    Last edited by ImpeachKingGeorgeII; 10-27-2008 at 11:33 AM.

  12. #10
    Thursday is the day to watch. This is when the Fed is expected to cut rates and Q3 GDP stats are released. Anything goes, I have no idea what could happen. Many predicted a crash on Friday but that was just another bad day for the dow. Today the dow is up 100 currently.
    Eliminate interference in your life

  13. #11
    Quote Originally Posted by icon124 View Post
    *waits for conspiracy theories*

    You know somewhere inbetween they're trying to make more money before they make a one world Government, or hey I know a better one - PPT is doing it.

    I swear evil people...our market needs to collapse so my gold will lead me to power!...




    *sarcasm*...but that is probably what most people want to hear around here
    You bet that's what I want to hear. When the government is buying stock, captialism is hanging on by a thread. I don't come here for rosey forecasts. I want to hear doom and gloom, because that's what it is.

  14. #12
    There has been a delay in some of the impacts of the financial situation hitting countries outside the US. Some of them are just beginning to release information about how hard they are being hit while the US stock market has already taken a larger drop and more of the bad news is currently priced into it. This will make the US market slightly more attractive so money leaving the Asian markets may be coming here- slowing the US decline for now. Just my theory.

  15. #13
    Dow fading. Now 41. It could not hold the gain. Not good. Will need to see what happens into the close.

    It does not look like people are falling for the buy, buy, buy routine.

    If it tanks at the end, it will likely spread across foreign markets again tonight.

  16. #14
    It now appears they are in default. They did not pay within the 7 days. Big numbers out there.

    http://www.bloomberg.com/apps/news?p...mw&refer=japan

  17. #15
    Quote Originally Posted by rockjoa View Post
    Thursday is the day to watch. This is when the Fed is expected to cut rates and Q3 GDP stats are released. Anything goes, I have no idea what could happen. Many predicted a crash on Friday but that was just another bad day for the dow. Today the dow is up 100 currently.
    I agree with this post. As to Thursday, I would expect at least a 300 point drop. Every time the bernanke speaks the market seems to get closer to a bloody death.

  18. #16
    Fed meets Tues. and Wed. We should know about any rate cut Wed. afternoon.

    Tomorrow might also be a very volatile day, as it is the last day for trades that need to take place in Oct. to settle before the end of the month.



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  20. #17
    I've been trying to follow this situation closely as well. I've also listened and read a lot of Peter Schiff's opinions on getting out of the US dollar. I tend to agree with his long-term prospects for the US dollar but I'm still having a hard time pulling the trigger on reallocating my investments out of my domestic funds and into foreign funds since the foreign funds have dropped the most during this crisis, especially the emerging markets which have dropped off a cliff.

    Right now I'm 75%/25% between US/Foreign (20% developed, 5% emerging). I've lost about 40% this year with that allocation. Schiff has been recommending to get of the US funds for awhile now. I'd be down over 50-60% if I allocated the entire amount to foreign funds a year or so ago. I just wonder when, and if, the foreign markets are going to start going back up while the US markets lag behind. Or, when and if I should reallocate to 100% foreign. I'm not sure I want to reallocate to some of these countries that are on the verge of bankruptcy themselves.

    For those who still have some money in the market, how are your investments allocated?

  21. #18
    Quote Originally Posted by icon124 View Post
    I swear evil people...our market needs to collapse so my gold will lead me to power!...
    I just don't get this logic.

    How could anybody be lead to power if they had gold? It isn't like the gold is going to get more valuable than it already is. It's more like the gold would hold it's value while the fiat currencies turn to firewood.

  22. #19
    I'd guess that the rate cut has already been priced into the market.

  23. #20
    Quote Originally Posted by smsnead2 View Post
    I've been trying to follow this situation closely as well. I've also listened and read a lot of Peter Schiff's opinions on getting out of the US dollar. I tend to agree with his long-term prospects for the US dollar but I'm still having a hard time pulling the trigger on reallocating my investments out of my domestic funds and into foreign funds since the foreign funds have dropped the most during this crisis, especially the emerging markets which have dropped off a cliff.

    Right now I'm 75%/25% between US/Foreign (20% developed, 5% emerging). I've lost about 40% this year with that allocation. Schiff has been recommending to get of the US funds for awhile now. I'd be down over 50-60% if I allocated the entire amount to foreign funds a year or so ago. I just wonder when, and if, the foreign markets are going to start going back up while the US markets lag behind. Or, when and if I should reallocate to 100% foreign. I'm not sure I want to reallocate to some of these countries that are on the verge of bankruptcy themselves.

    For those who still have some money in the market, how are your investments allocated?

    I don't have any allocation recommendations but I am not pulling my money out of domestic stocks because that would guarantee that I lose money on them. I do not need the money today and can afford to try to wait for them to go back up again. If you get out now, when do you make the decision to go back in- after they have already made a lot of gains off the low? That puts you at risk of buying back in nearer a peak and missing a lot of the run up. I cannot time the market- nobody can. You may change where you put new money- but for myself I am not taking old money out. Foreign investment includes currency risk- if the dollar goes up against the currency then the value of foreign investments goes down. You could avoid that by investing in US trading companies with foreign exposure but the economic situation seems to be hitting much of the rest of the world as well. Just my own perspective- not intended as investment advice. Take any investment advice with a grain of salt.

  24. #21
    Quote Originally Posted by Zippyjuan View Post
    I don't have any allocation recommendations but I am not pulling my money out of domestic stocks because that would guarantee that I lose money on them. I do not need the money today and can afford to try to wait for them to go back up again. If you get out now, when do you make the decision to go back in- after they have already made a lot of gains off the low? That puts you at risk of buying back in nearer a peak and missing a lot of the run up. I cannot time the market- nobody can. You may change where you put new money- but for myself I am not taking old money out. Foreign investment includes currency risk- if the dollar goes up against the currency then the value of foreign investments goes down. You could avoid that by investing in US trading companies with foreign exposure but the economic situation seems to be hitting much of the rest of the world as well. Just my own perspective- not intended as investment advice. Take any investment advice with a grain of salt.
    Thanks Zippyjuan. I would view a reallocation from domestic to foreign funds as being sort of a "sell low, buy lower" strategy. If you listen to Schiff, the currency risk is the primary reason to get out of the domestic markets. The US dollar has been rising; but how long will that last? It just seems that with the foreign markets reaching lower levels and the current strength of the US dollar, that the likely pendulum swing is for the foreign markets to rebound faster against an inevitable decline in the strength of the US dollar. I just don't know when or if to switch strategies.

    Who knows. Maybe the foreign markets will struggle just as much, if not more, than the domestic markets for the forseeable future.

  25. #22
    Rate cuts haven't triggered the rallys they usually do lately. Neither did the bailout.

    TBH in the medium and long run I think they are losing their control over the markets. They can make small jumps one way or the other in the very short term, but even that is getting weaker.

    A bunch of companies with dimininishing earnings, a bunch of unpaid debt, and big layoffs are not going to hold thier market value forever.

  26. #23
    The Fed Funds rate really doesn't mean much now anyway. It's just a target that they try to maintain by buying and selling bonds on the open market. And they haven't been able to keep the effective rate anywhere near the target since early September. It was actually 0.95% on Friday, even though the target is 1.5% right now. http://www.newyorkfed.org/charts/ff/

    The rate cuts are only psychological at this point, and it's gotten to where they only make things worse whenever they try to use their psychological tricks to influence the market. It think it just sends a signal that things are really bad if they have to keep cutting rates.

    The Discount Rate might have more of a direct effect on things, but ultimately, it doesn't matter how much money banks borrow from the Fed if they're just sitting on it anyway.
    “Eternal vigilance is the price of liberty; power is ever stealing from the many to the few.” --Wendell Phillips



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