How on Earth are equities performing this well when housing numbers are crap, unemployment is crap, food prices are going up and our medicare system is royally f'ed? I enjoyed being on the long side for the main part of oct-jan rally. Now, I realize it's a momentum game and all but at what point does reality set in? I just recently became short, and I will probably double positon in next week or two. I just don't see how this can be but I guess there is a disconnect between wall street and reality. God Bless all.
The printing machine is on 24/7. Dollars are worth less and less, so why would people want to be in paper money? Commodities are not the only place where things are considered assets. The Dow and SPX (general market- having a share of companies) are assets too. Diversifying out of the crappy dollar into assets (the market being one of them) makes sense to me. JMHO.
and then what happens when corporate profits crash because these so called cash rich companies can't pass on the costs?
i tell you what..we have hyperinflation and massive deflation collapse at the same time
All the answers here are wrong. The correct answer is that equities aren't going up. They're going down. It's just that the dollar is going down just a little faster. Hence the constant low volume meltup.
I will make it simple. SDS is a ETF based on a short position of stocks. U.S companies made massvie cuts in the last 2 years. Wages were frozen,plants were shut, contracts were renegoiated. Many buisnesses simply do not exist today. Look at the consolidation that is still happpening in the banking sector.
Charles Darwin's "Survival of the Fittest" applies to this picture.
Corporate profits are rising. SDS is based on the performance of U.S stocks.
Take a few seconds and look at a 3 mo,6mo,1 year and 2 year chart of SDS.
SDS is betting that the U.S corporations will lose money. As the economy slowly improves it only adds more risk to a SDS investment.(gamble)
Bottom line U.S stocks are firming.
The SDSers will now fight tommarrow's press concening the market rally today.This will only add more fuel to the stock fire.~md
The market is looking backwards now it seems. These earnings are compared to a dismal Q4 in '09. I doubt Q4 '11 earnings improve over Q4 '10. Reality time. But the market does tend to overshoot in each direction.
That video is all you need to know. By the way, I have been an idiot since September. I don't get it either, but if the fed buys assets everyday, then the market rises. 1300 is the "Fed" level. High of day of last meeting, as long as we are above 1300, no reason to short. Fed is still buying enough assets. Sell all breaks below the "Fed" level. It will crack someday, but could be 1st quarter 2012.
GREAT STUFF gvoor, good stuff, that video mantra has made me some dough, too bad it aint worth anything:)...
rally, do we kiss 1315?? do we bust it?? QE3 on the way, and market LUVS QE, so carefull..
jus back up ur longs with some hedgies/puts whatever...inflation plays all good...
Haha that was pretty good, and sadly very true as reality plays ZERO hand in this market. Luckily I haven't been too stubborn and actually participated in much of this rally. I figured a pullback to at least 1250 was coming in but apparently that isn't going to happen. We'll see, my job isn't a "desk" job so it's really hard to monitor the market like I would want to. (today killed me) Best of luck.