OT - Dow plunges 1,175 - worst point decline in history

[54ny77]

Just turn the chart upside down. Winning!

[sitzmark]

Originally Posted by Louis

If that does happen, it will certainly be irrational negativity (to invert Alan Greenspan's famous phrase).

Maybe. 9 long years of irrational growth due to QE2 and US markets being the "safe" place to park $$. Long range P/E's have looked way overvalued to me for a long time. Have been sitting on cash waiting for this. ... of course missed a lot of run up too, but haven't lost any principal. So we wait patiently to see where a "floor" is, then start dollar costing in.

"Average people debt" is rising again and home equity ads are more prominently hitting the ad-waves. Bad sign. There has been a crisis in bad debt auto loans for the past few years. Nothing on the scale of the home mortgage crisis, but it is a drag on the system hovering below the surface. Tax relief dollars need to be spent to keep economy from slowing. National debt is scary and growing beyond GDP.

Return on "safer" investments than stock market are beginning to have a breakeven/actual return compared with inflation. For a long time, there has been zero return without risk. Low interest rates have forced older Americans to dump treasuries and other insured investment in favor of risk to get any return on retirement savings. If/as rates rise, a good share of those reserves will happily seek some modicum of "safety" outside of the stock market. There's a lot of near-term retirement savings in this mix.

[Louis]

Originally Posted by sitzmark

So we wait patiently to see where a "floor" is, then start dollar costing in.

How will you know when this happens? When it falls back down to zero? (jk)

[sitzmark]

Originally Posted by Louis

How will you know when this happens? When it falls back down to zero? (jk)

LOL. A "floor", not the floor. If 2008 replays itself (doesn't appear likely at this point), that might be a good buying point.

[Louis]

Originally Posted by sitzmark

LOL. A "floor", not the floor. If 2008 replays itself (doesn't appear likely at this point), that might be a good buying point.

Good luck. (I'm not a Chartist)

[cloudguy]

Originally Posted by rounder

We need someone like 1Centaur to explain all this stuff, at a time like this.

no thanks

[unterhausen]

the drop is because investors found out about paypal's 1099k policy.

It's been a long time since I paid any attention to the market, but it seems like the futures can drop like this and be wiped out in the first hour of trading.

[sitzmark]

Originally Posted by Louis

Good luck. (I'm not a Chartist)

Agreed - charts are charts and who really knows the forecast. I'm more interested in tracking value than price and 30+ CAPE (even 20+) is cautionary for me. That's 30+ years of inflation adjusted earnings to equal share price. It's a new era post-dot com, but still...

[oldpotatoe]

Originally Posted by Louis

It's the Dems fault because they didn't clap for him during the State of the Union address.

[Nooch]

i'm just upset I had a buy order in for aapl at a point where I thought it wouldn't get down to, and was sure hoping if it did, it would bounce right back. eh, losing money sucks, but that's the game. long term I'm sure it'll be just fine.

[huck*this]

Buy Buy Buy or do nothing and ride it out. In the grand scheme of things 1200pts loss is nothing relative to market of 26k. I wouldn't base your portfolio on a a "day" loss.

[unterhausen]

Originally Posted by unterhausen

It's been a long time since I paid any attention to the market, but it seems like the futures can drop like this and be wiped out in the first hour of trading.

guess this still happens. U.S. markets are up right now. Not sure what is going to happen the rest of the day though.

[oldpotatoe]

Originally Posted by unterhausen

guess this still happens. U.S. markets are up right now. Not sure what is going to happen the rest of the day though.

buckle yer seat belts...!!

[Tony T]

Originally Posted by unterhausen

guess this still happens. U.S. markets are up right now. Not sure what is going to happen the rest of the day though.

…and down, and up, and down again.

First hour today:

[rounder]

Originally Posted by 1centaur

Common sense says that not a lot of people have decided that the world is a much worse place today than it was a week ago. The numbers that suggest economic strength are pretty good globally at this point. So why does the market drop like this?

There is a lot of automatic trading in this world, trades that happen because of patterns or because ETFs just don't care what something is worth. Momentum begot momentum on the way up so it had to happen on the way down. Trading without human judgment begs for greater volatility than was true historically, and the historically low volatility of the last year was ALSO because a lot of trading was trend-following a good trend.

Anecdotally, actual people seem to think this is a buying opportunity. That probably means they'll start buying as soon as the out-tide looks weak. And then the automatic trading will pick up on that momentum. There will come a day when machines/ETFs/people all want to sell, and that will feel really bad, but it does not seem likely that this pattern is setting up that way today. The market used to "know" because it was the consensus of people making judgments (wisdom of crowds). We're not exactly in that world anymore.

I'm not a stock guy, professionally, so take this for what it's worth.

Thanks!

I was listening to Bloomberg on the way in this morning and they were saying something similar. The economic signs look good and a lot of the decline was due to indexed trading. They viewed it as a market correction, and that there did not seem to be much turmoil in the other investment markets.

But they said that if the time comes where the economic signs do not look good and something like this happens, then look out.