Down goes the Dow

Hey, numbnuts wrote:

la gente está muy loca wrote:

[Tue. Dec 17, 2013] $DOWI Open: 15,884.06 High: 15,917.96 Low: 15,836.45 Close: 15,875.26 [Fri. Jan 24, 2014] $DOWI Open: 16,203.29 High: 16,203.29 Low: 15,879.11 Close: 15,879.11

K5, are going to address your lies?

Such as?

Numbnuts/agip.

Agip claimed that the Dow had lost only its gains since mid December, when in fact is has already lost all of its gains since mid November.

Now that is an example of Agip's lying.

Agip's statement was factually correct. You have been presented with substantiating evidence. It is you who are the liar.

Hey, numbnuts wrote:

Agip's statement was factually correct. You have been presented with substantiating evidence. It is you who are the liar.

Agip's statement was typically misleading and self serving.

The Dow is back to where is was in mid November. Hence it has lost all of its gains since mid November. To say it has only lost its gains since mid December is dishonest

K5 wrote:

Hey, numbnuts wrote:

Agip's statement was factually correct. You have been presented with substantiating evidence. It is you who are the liar.

Agip's statement was typically misleading and self serving.

The Dow is back to where is was in mid November. Hence it has lost all of its gains since mid November. To say it has only lost its gains since mid December is dishonest

K5. Chill. You have to understand that you are not dealing with the most self aware people on the planet

Marone wrote:

[quote]K5 wrote:

K5. Chill. You have to understand that you are not dealing with the most self aware people on the planet

Tell Agip that.

K5 wrote:

Marone wrote:

[quote]K5 wrote:

K5. Chill. You have to understand that you are not dealing with the most self aware people on the planet

Tell Agip that.

You miss the point completely. Agip and his ilk are incapable of seeing themselves clearly. No sense in wasting any effort on them. And a guy who calls himself "hey, numbnuts"? I mean, come on. You're going to try to reason with a clown like that?

I finally opened this thread and upon discovering there was no discussion of the DOW in the "Down Goes the Dow" thread, I'll start one.

The January Barometer has an excellent record of forecasting the market direction for the entire year. With only five trading days left, the Dow and the S&P 500 seem very likely to close down for the month. Both are down by more than 5%.

The January early barometer (first five trading days) was mixed with the DOW down and the S&P 500 up.

I don't know if the party is over yet, but the single biggest driving force in the market has been QE for some time now. Since QE is politics, who knows what's going to happen there.

Also, gold has made an interesting move. It's up and gold mining shares are up, but the best move has come in the junior mining stocks. The GDXJ is up 20% since December 31st.

I felt that the bottom was near in junior gold stocks so I bought MUX (McEwen Mining) in December at 1.90 and it's now at 2.63 as I type this.

Any thoughts on the market? Gold?

K5 wrote:

Hey, numbnuts wrote:

Agip's statement was factually correct. You have been presented with substantiating evidence. It is you who are the liar.

Agip's statement was typically misleading and self serving.

The Dow is back to where is was in mid November. Hence it has lost all of its gains since mid November. To say it has only lost its gains since mid December is dishonest

Talk about self-serving...you have rewritten agip's words to cover your lie.

He wrote that gains since Dec 17 have been lost. This is a fact.

Whether it's December 17th or November 17th does not matter to the larger point

1. The 'january barometer' does not have an excellent record of forecasting - it is almost worthless. If you look at the next 11 months after the stock market has a negative January...the average 11 month return is positive.

2. Markets are not down 5%, except for the emerging markets. Depending on the index, they are down 3-4%.

3. No one really knows the impact of QE on the stock market,. Impossible to quantify. But the economy has been improving by almost all measures, and the stock market it up. Those two things cannot be a coincidence.

I think this will be a slow year - probably up 5%. Because valuations are high and things aren't so good that back to back bonanzas are likely. But predictions are worthless.

agip wrote:

No one really knows the impact of QE on the stock market,. Impossible to quantify.

That is incorrect. QE or expansion of the "monetary base" will always increase the price on financial and real assets. it is artificial demand for these assets. since supply/demand curve is eco 101 you should know prices for these assets rise. it trickles down the capital structure and equity prices rise as (expected) return on equity diminishes as well. this explains p/e multiples on fast growing tech companies and multiple expansion in the markets.

gn1tmac wrote:

agip wrote:

No one really knows the impact of QE on the stock market,. Impossible to quantify.

That is incorrect. QE or expansion of the "monetary base" will always increase the price on financial and real assets. it is artificial demand for these assets. since supply/demand curve is eco 101 you should know prices for these assets rise. it trickles down the capital structure and equity prices rise as (expected) return on equity diminishes as well. this explains p/e multiples on fast growing tech companies and multiple expansion in the markets.

1. So if I found and example of qe somewhere in the world, and found the stock market falling at the same time...what you think then? What are the chances of my finding that example?

2. I really meant that the degree of impact of QE on the stock market is impossible to quantify. 100 dow points? 1000 dow points? 5000 dow points? animal spirits such as they are make it impossible to know how much QE has boosted the stock market.

3. High PE multiples on fast growing tech companies have existed from the beginning of public markets. Blaming QE for high multiples is not really fair. People will pay very high prices for growth - doesn't matter what bonds the fed reserve may or may not be buying.

My master point is that you might be being too formulaic - the titanic US economy is not a machine made of quantifiable inputs and outputs. QE is but one element.

gmt's point makes perfect sense. It is a general, but accurate point. Agip is the one that is trying to be too precise in order to appear "correct". Who cares if QE 1, 2, 3 & Op Twist have accounted for 8000 points or 6750 points on the DJIA? The basic point still stands - it is a big, if not THE big reason the market is up big. There is a reason they have been talking about phasing it out for years, yet is has mostly grown.

From 1/1920 to 10/1929; monetary base up 1%, DJIA up 329%. From 1/1970 to 12/1979; monetary base doubled, SP500 up 15.8%. From 1/1995 to 12/1999; monetary base up 44%, SP500 up 320%. From 9/2008 to 1/2014; monetary base up 440%, SP500 up 44.7%.

who are you and how do you get all this amazing data?

No sarcasm meant there - what is your work?

dumb wrote:

Whether it's December 17th or November 17th does not matter to the larger point

Sure it does.

Agip was claiming the recent losses have only wiped out earnings of the last 5.5 weeks when it has in fact wiped out all earnings of the past 10 weeks.

K5 wrote:

dumb wrote:

Whether it's December 17th or November 17th does not matter to the larger point

Sure it does.

Agip was claiming the recent losses have only wiped out earnings of the last 5.5 weeks when it has in fact wiped out all earnings of the past 10 weeks.

Ok, so what? The original point is that the recent downturn has wiped out a small time period of gains compared to the huge bull market of the last year. Whether you insist that it is 10 weeks or 5.5 weeks, both of which would be accurate statements going by the closing S&P500, does not alter the premise.

dumb wrote:

K5 wrote:

Sure it does.

Agip was claiming the recent losses have only wiped out earnings of the last 5.5 weeks when it has in fact wiped out all earnings of the past 10 weeks.

Ok, so what? The original point is that the recent downturn has wiped out a small time period of gains compared to the huge bull market of the last year. Whether you insist that it is 10 weeks or 5.5 weeks, both of which would be accurate statements going by the closing S&P500, does not alter the premise.

The fact that Agip was selling the premise that only 5.5 weeks of gains in the Dow were wiped out -- not 10 weeks (a period 80% longer than the period he notes) speaks for itself. It is a cherry picked date used to prop up a false premise. You are doing the same. Look at your language. I am "insisting" on a what -- the truth? Then you throw in comment on the S&P and last year's bull market that have nothing at all to do with the established fact the Agip was cherry picking a date to prop up his argument.