Down goes the Dow

Typical Wall Street behavior. Always guessing.

Typical poster, always critical, little of substance to say.

Throw some stones or bricks....

http://davidstockmanscontracorner.com/why-dip-buyers-will-get-clobbered-the-us-economy-isnt-doing-just-fine/

Here's another one for the bullish case (mind you, I'm long and short). Hartford Funds has published an analysis of “stock market returns after significant oil price declines.” They looked at 4 large oil price declines in the last 30 years. The average stock market increase after the oil decline was 27%

I don't have a problem with negative views being presented. I do have a problem with negative views from people with poor track records (Shiff, Stockman, Huffman, etc.). I'm sure Bill Fleckenstein has managed to make money, or at least not lose money in the last few years. But I also don't want a one sided argument where less experienced people may believe the entire trend is down and sell when they shouldn't. We have a normal correction--that's it at this point. I also didn't mention the reason I went long-short last summer (more than 70% of stocks above the 200 day MA, which is a pretty decent indicator of a short/intermediate term overbought market) for the same reason.

Here's another one for the bullish side from a pretty well-known Forbes contributor:

http://www.forbes.com/sites/billconerly/2016/01/25/stock-and-commodity-prices-dont-forecast-recession/#7cdf3a6a3fa3

Ghost of Igloi wrote:

Throw some stones or bricks....

http://davidstockmanscontracorner.com/why-dip-buyers-will-get-clobbered-the-us-economy-isnt-doing-just-fine/

Serious question: has Stockman ever been right?

The name is John Hussman:

http://www.hussmanfunds.com/wmc/wmc160125.htm

Igy

POTO,

So far he has been right on dip buyers.

Off to spin class, and she does not like people to be late.

Igy

I'm not sure he has been right. Those who bought earlier last week and sold on Friday made some coin.

Have a good sweat.

[quote]Pointing Out the Obvious wrote:

I'm not sure he has been right. Those who bought earlier last week and sold on Friday made some coin.

But that would be timing the market and we are not supposed to try to do that.

As great as anybody's in the business, apparently, and hardly cause for disparagement.

coach d: "We have a normal correction--that's it at this point."

I agree with this assessment. I do believe that the overall "depth" of the correction is greater than the indexes indicate, which is why I was asking Igy earlier, at what point does the P/E become attractive? Of course it will depend on earnings, etc., and at some point, the gargantuan problems like debt will sink the economy---------but when?

If I believed that the business environment was sufficiently stable, I would be very tempted to buy in now, or soon; however, I do not so believe.

I still think that things will have stabilized at 16-17k, at least until the US elections. I am also still on the cusp of buying gold, it has also shown some stability at or near current levels.

interesting piece on the oil drops eventually becoming big gains. the problem is that I bet if you measured after big price GAINS in oil you would ALSO have a nice rise in the stock market, because the stock market usually goes up.

But yeah - I could see us a year from now saying 'what short sighted idiots we were, not seeing that dirt cheap oil would be a stimulus to the economy and negative tax on the consumer.' So maybe.

I'm not so sure this is a normal bear market, It is by the SP500 yes, but by other indices things are much worse. Small caps are down by 23% for ex. That's a huge number in a non-recessionary economy. Sure small caps have a higher beta than the SP500 but still - 23%.

That -23% is what I meant by the "depth" of the correction. Quite, quite deep IMO.

This oil price stuff, what an absolute heap of rubbish. Don't you remember when everybody used to say that a drop in the price of oil would send economies skyrocketing? This was the standard mantra, in fact.

But, whoops! No, that's not what we meant, in fact we meant the exact opposite! What a bunch of garbage.

Everything is interlinked. Not only can you not isolate any one factor successfully, it also must be considered exactly HOW that factor came to be.

These pronouncements of a huge rise after oil are all internally inconsistent.

Also, IMO it highlights the "markets as proxy for the economy" issue.

Well, this early posting was nice. I have a whole day of meeeeeeetings to attend, some better than others. I hope to check in this evening for the Tuesday post-mortem.

To All,

I think there is value to posting links to different points of view. My links have a negative slant that supports my opinion of where the market may be headed. Others have posted opinions that are Bullish and supplied links or data to support their view of the market's direction. One point that should be considered, at the top of a market the Bullish view will appear correct, and at a market bottom a Bearish view will do the same.

Igy

to be fair, maser, things have changed re; the relation of the US economy to oil

we, and all industrialized economies, are far less affected by the price of oil than we used to be when drops in oil were thought to be wildly positive. Oil was $140 a barrel and it didn't seem to hurt us much. So the inverse is that $30 oil might not help us much either.

Also, the US has become a massive oil producer so we have some interest in a high price of oil. Althouigh that is complicated because we don't export oil and the strong dollar. But I still think we get some benefit in some sectors of the economy from a higher price.

Plus Canada and mexico also have oil bizness, so all of north america gets some benefit from high oil.

I think I understand the Mas. Oil prices haven't decreased due to a drop in demand during high prices, therefore no great increase should be expected when the price drops. Not much elasticity, and any savings to be had probably go to pay off debt.

Ghost of Igloi wrote:

So much for Friday's rally.

so much for Monday's slide

Chinese shares are down 25% YTD but if you look at the stocks' P/E ratio that's still a lot higher than US DOW or S&P 500 stocks. Even higher than most NASDAQ stocks (except Amazon).