Author Topic: DOW broke 17,000  (Read 107280 times)

Max

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Re: DOW broke 17,000
« Reply #120 on: December 11, 2014, 01:56:04 PM »
True, but many of the above you listed weren't really a factor in trade volumes a couple decades earlier.

Oh I'm not saying that at all. I'm just point out the main factors and that being said some of the old tech models don't jive well with them.

Offline Cedar

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Re: DOW broke 17,000
« Reply #121 on: December 12, 2014, 08:23:17 AM »
Pre-market was -69 when  I looked about 6pm last night, so I was not surprised when it dropped like a rock at bell this morning.

Down -124 to 7,469.25 by 10 am

Oil drops below $60

Cedar

Offline Prodigy

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Re: DOW broke 17,000
« Reply #122 on: December 12, 2014, 08:31:22 AM »
Can you do a quick run down on what that is?

Cedar

I would sum it up briefly by saying it measures volatility in the market.  Lots of new highs with simultaneous new lows within a certain percentage of all the publicly traded securities, among some other factors, can be a sign of an unhealthy market.  It's not a basket you put all your eggs into, but rather it's just another one of those potential signs of bad things coming.

We're up to 8 H.O.'s out of the last 9 trading days, and by the time today is over it'll probably be 9/10.  This is unprecedented in the last 25 years, so who knows what it means.  Maybe a small correction is coming, or maybe a huge one is.  Whatever it is, though, probably won't be good.  The "when" is also anyones guess.

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Re: DOW broke 17,000
« Reply #123 on: December 12, 2014, 08:35:40 AM »

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Re: DOW broke 17,000
« Reply #124 on: December 12, 2014, 09:14:53 AM »
10:00 am  -124.00
11:00 am  -181.48
11:00 am  -182.64
11:02 am  -188.02
11:03 am  -191.12
11:26 am  -202.41
11:27 am  -207.57
11:29 am  -214.69
11:29 am  -217.19
11:31 am  -218.09




http://www.cnbc.com/id/102263988#.
http://www.bbc.com/news/business-30445420

Cedar
« Last Edit: December 12, 2014, 09:32:11 AM by Cedar »

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Re: DOW broke 17,000
« Reply #125 on: December 12, 2014, 11:55:45 AM »
12:09pm  -225.80
12:07pm  -231.06
12:08pm  -233.68
12:14pm  -235.64

Was up to 17,991.19 today so far.

Low today today so far, 7 days later
17,357.30 Lost 634 points in 7 days

Cedar

Offline Josh the Aspie

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Re: DOW broke 17,000
« Reply #126 on: December 12, 2014, 12:01:07 PM »
I'm glad I've been focusing my own investments in the direction of taking care of things in my personal life, and making sure debts are paid off.

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Re: DOW broke 17,000
« Reply #127 on: December 12, 2014, 12:12:53 PM »
My mom keeps pressuring me to putting my savings into stocks... even as of last night when she called. I told her I wanted to buy 7 acres as an investment I have had my eye on.. and she is like "The stocks are so much better".. I am like... Nooooo... I still have the land and it is usable if land tanks.. She is like "You have 100 acres!", I am like.. "Maybe SP would like 7 acres of her own one day? And it has 15 yr old trees on it.. when she is old enough, it might do some good towards her college." (I knew that would get mom to shush).

Cedar

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Re: DOW broke 17,000
« Reply #128 on: December 12, 2014, 01:28:19 PM »
Selling slammed stocks on Friday as the deepening rout in oil took a heavier toll on investors' confidence. European stocks cratered, with major benchmarks losing 2.5% or more. As of 2:16 p.m. ET, the Dow Jones industrial average, S&P 500 and Nasdaq are lower. The Dow is falling the most -- off 1.1%, or about 200 points.  In Europe, benchmarks in Britain, Germany and France -- the FTSE, DAX and CAC 40, respectively -- hurtled down 2.5% or a little more.

http://www.usatoday.com/story/money/markets/2014/12/12/stocks-friday/20295995/

Cedar

Max

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Re: DOW broke 17,000
« Reply #129 on: December 12, 2014, 01:29:37 PM »
My mom keeps pressuring me to putting my savings into stocks... even as of last night when she called. I told her I wanted to buy 7 acres as an investment I have had my eye on.. and she is like "The stocks are so much better".. I am like... Nooooo... I still have the land and it is usable if land tanks.. She is like "You have 100 acres!", I am like.. "Maybe SP would like 7 acres of her own one day? And it has 15 yr old trees on it.. when she is old enough, it might do some good towards her college." (I knew that would get mom to shush).

Cedar

Good for you Cedar. Land is something most people want but few people have. Now if we could just make property taxes illegal nationwide...........

Offline Prodigy

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Re: DOW broke 17,000
« Reply #130 on: December 12, 2014, 01:32:55 PM »
My mom keeps pressuring me to putting my savings into stocks... even as of last night when she called. I told her I wanted to buy 7 acres as an investment I have had my eye on.. and she is like "The stocks are so much better".. I am like... Nooooo... I still have the land and it is usable if land tanks.. She is like "You have 100 acres!", I am like.. "Maybe SP would like 7 acres of her own one day? And it has 15 yr old trees on it.. when she is old enough, it might do some good towards her college." (I knew that would get mom to shush).

Cedar

Generally you can't go wrong investing in land, assuming you aren't taking on debt+interest rate to do it.


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Re: DOW broke 17,000
« Reply #131 on: December 12, 2014, 01:43:27 PM »
3:39pm -268.22
3:40pm -276.47
3:41pm -280.54
3:42pm -283.05
3:47pm -289.21
3:53pm -294.77
3:53pm -300.48
3:59pm -306.07
4:01pm -308.06
4:03pm -309.15
4:04pm -312.04  (isn't it supposed to have the bell ring at 4? or is this residual stuff?)
4:08pm -315.51


Looks like pre-market is -253.00 already for Monday? I will look again tonight.

Cedar
« Last Edit: December 12, 2014, 02:15:15 PM by Cedar »

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Re: DOW broke 17,000
« Reply #132 on: December 12, 2014, 01:44:20 PM »
Generally you can't go wrong investing in land, assuming you aren't taking on debt+interest rate to do it.

I always pay cash. Except 2 houses ago, I was $0 down, and made double payments.

Cedar

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Re: DOW broke 17,000
« Reply #133 on: December 15, 2014, 10:10:03 AM »
11:33am -140.29
11:56am -159.91

Went down to 17,115.28 today. A week ago was almost to 18,000.



See Russia's Ruble went down 8% today?

Cedar

Max

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Re: DOW broke 17,000
« Reply #134 on: December 15, 2014, 10:29:20 AM »
11:33am -140.29
11:56am -159.91

Went down to 17,115.28 today. A week ago was almost to 18,000.
See Russia's Ruble went down 8% today?

Cedar

"Dec 12 (Reuters) - Banks are responding to tumbling crude prices by trimming the value of oil reserves tied to credit lines, possibly causing a cash crunch for some highly-leveraged U.S. exploration and production firms.
With U.S. crude production still rising and the oil cartel OPEC showing no willingness to cut output to curb global oversupply, there is little to suggest that prices will rebound soon from a 40 percent slide since June
Lower reserve valuations would reduce the amount of credit available. When banks next reassess loans, which they typically do twice a year in October and April, smaller publicly traded oil companies with heavy debt and largely used up credit lines could see some financing dry up.
"They may be able to refinance debt. But I don't think anybody is going to be able to add on significantly more debt," said Christian Ledoux, a senior portfolio manager at San Antonio-based South Texas Money Management."

http://www.reuters.com/article/2014/12/15/oil-prices-credit-idUSL1N0TW20020141215

This could end badly. Very badly.

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Re: DOW broke 17,000
« Reply #135 on: December 15, 2014, 11:56:43 AM »
Oil sinks below $57 as stocks dive into red.  European markets were hammered.
http://www.usatoday.com/story/money/markets/2014/12/15/stocks-monday/20423839/

Cedar

Offline FreeLancer

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Re: DOW broke 17,000
« Reply #136 on: December 15, 2014, 02:25:03 PM »
This could end badly. Very badly.

I guess that all depends on what the definition of "end" is, and how far off in the future it occurs.

Offline David in MN

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Re: DOW broke 17,000
« Reply #137 on: December 15, 2014, 02:34:59 PM »
This could end badly. Very badly.

Not if you're covering shorts right now after selling off last month.  ;D All cash shortly and looking to buy those worthless oil stocks.

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Re: DOW broke 17,000
« Reply #138 on: December 16, 2014, 04:44:12 PM »
Down  -111.97 today, finished at 17,068.87. Drop blamed on oil and ruble.

Cedar

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Re: DOW broke 17,000
« Reply #139 on: December 17, 2014, 04:24:10 PM »
+320.30 today at the peak, closed at 17,356.87.

Cedar

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Re: DOW broke 17,000
« Reply #140 on: December 18, 2014, 02:36:59 PM »
+421.28 Closing 17,778.15

Today's excuse is, ""The reality is markets were hit with we're not sure what's happening and why, as oil has been acting as something akin to a global interest rate. The good news is the Fed is aware of what is going on, and they want to be friendly, so people are hopefully in better cheer," said Jack Caffrey, equity portfolio manager at J.P. Morgan. Investors applauded the Federal Reserve's pledge that it would be patient in increasing interest rates. "

Cedar

Offline Prodigy

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Re: DOW broke 17,000
« Reply #141 on: December 18, 2014, 03:32:13 PM »
Half of yesterdays buying were shorts covering.  Always ironic when a large portion of an upward swing is from pessimistic people assuming the market is going down.

Haven't looked into what the situation was today.  The Fed is stepping in hard, lately - that much is certain.

Offline bigbear

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Re: DOW broke 17,000
« Reply #142 on: December 18, 2014, 07:40:53 PM »
"Dec 12 (Reuters) - Banks are responding to tumbling crude prices by trimming the value of oil reserves tied to credit lines, possibly causing a cash crunch for some highly-leveraged U.S. exploration and production firms.
...
Lower reserve valuations would reduce the amount of credit available. When banks next reassess loans, which they typically do twice a year in October and April, smaller publicly traded oil companies with heavy debt and largely used up credit lines could see some financing dry up.

So highly leveraged firms will either go bankrupt or be targets of buyouts. 

Offline CharlesH

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Re: DOW broke 17,000
« Reply #143 on: December 18, 2014, 07:56:55 PM »
Not if you're covering shorts right now after selling off last month.  ;D All cash shortly and looking to buy those worthless oil stocks.
 
  What does it mean to cover shorts?  Is that a gamble on the market going up or down?

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Re: DOW broke 17,000
« Reply #144 on: December 18, 2014, 08:12:47 PM »
The Feds have their foot smashed on the gas pedal till the engine blows up.

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Re: DOW broke 17,000
« Reply #145 on: December 18, 2014, 08:15:14 PM »
3:39pm -268.22
3:40pm -276.47
3:41pm -280.54
3:42pm -283.05
3:47pm -289.21
3:53pm -294.77
3:53pm -300.48
3:59pm -306.07
4:01pm -308.06
4:03pm -309.15
4:04pm -312.04  (isn't it supposed to have the bell ring at 4? or is this residual stuff?)
4:08pm -315.51


Looks like pre-market is -253.00 already for Monday? I will look again tonight.

Cedar

  I know it's weird I've seen go late also, they must have a little leeway somehow.

Offline Josh the Aspie

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Re: DOW broke 17,000
« Reply #146 on: December 18, 2014, 10:49:46 PM »
 
  What does it mean to cover shorts?  Is that a gamble on the market going up or down?

To "short" is to bet on the market going down.  To do so, you borrow a share from a trading company that owns that share, with the agreement to provide them with another share.  You then sell that share.

To "cover" the short is to buy the corresponding share that you will use to pay back your trading company.

So if the value of a stock is $1000, but I predict it will go down, I will borrow a stock (not paying for it), and sell the stock for $1000.
When the market is at $800, I may then buy another stock, and use that to pay back the loan, thus covering my debt, and making $200.
If, however, after selling at $1000, if the price goes up to $1100, and the term of the loan expires, I must buy one at $1100, thus loosing $100.

In my understanding, "naked" shorts are where someone sells a stock they don't actually have (even a borrowed stock), with the intent of buying one later.  These "Naked" shorts, when possible, can be used as an attack on the share value of a company, to bankrupt the company, and negatively affect the economy to which it belongs.  This is part of why naked shorts are so often illegal or highly restricted... besides the inherently fraudulent nature of the transaction.
« Last Edit: December 18, 2014, 11:10:15 PM by Josh the Aspie »

Offline CharlesH

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Re: DOW broke 17,000
« Reply #147 on: December 18, 2014, 11:06:22 PM »
Thanks Josh,  so if I am covering shorts then I am buying the shares that I will use to return the ones I borrowed to sell?  That would appear to be a move made when you think the shares are about as low as they will go, right?  That would explain the upward move the last few days.  It would also make sense that people with shorts would interpret the Feds announcement that they are in no hurry to raise interest rates as putting an effective floor on te market drop.

Offline Josh the Aspie

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Re: DOW broke 17,000
« Reply #148 on: December 18, 2014, 11:18:36 PM »
Buying to cover would happen any time you think it is most advantageous to you.  This could be "before the price goes any higher" during a price increase, to cut your losses, or when you don't want to loose the gains you've made, and you think there's a large enough risk of that.

Keep in mind that this is the time of year that the "fiscal year" ends.  As a result, some companies may have covered stock to shore up year-end numbers in their own companies (be they mutual fund managers, or companies that hold stock in other companies).

Also, yes.  For whatever reason, the market seems addicted to low fed interest rates, so the fed choosing to stake it's position as "gradual" rather than go right into an increase may have caused some rebound.

I don't fully understand why the market is addicted to the low interest rates, but I have some suspicions.  One of which is that, the higher inflation goes, the more people would rather have money in stock than cash (thus driving up the market).  Also, a low interest rate reduces the risks of debt-based investment (which is a strategy I'd never consider using myself).

Also, any company with debt will have a more expensive time borrowing, which may affect the price of their stocks if they are currently debt dependent.

So while removing the artificially depressed interest rates, and reducing inflation would be a good thing for the economy as a whole, the stock market addiction to both complicates things.

Offline CharlesH

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Re: DOW broke 17,000
« Reply #149 on: December 18, 2014, 11:38:55 PM »
I think part of the love affair with low rates is that it increases the opportunity cost of not being in stocks.  When rates are essentially zero there is little to gain from bonds and cash, so the big players will seek return from stocks.  Some of that money that would be loaned out as debt also ends up in real estate I'm sure, and other commodities.  But stocks are a real easy place to put cheap money.