# Market Bottom?



## The Rabbi (May 26, 2010)

Where is the bottom on the current market?  With so much uncertainty out there it doesn't make sense to be in anything but cash right now.  The downside potential is enormous, with sovereign debt default, municipal defaults, and bad gov't policy just around the corner.
Prices on stocks have come down but I am thinking they will need to go further to make up for all the risks.
Any thoughts?


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## tommywho70x (May 26, 2010)

get a real job?


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## The Rabbi (May 26, 2010)

tommywho70x said:


> get a real job?



Leave the grownups to talk amongst themselves, OK?


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## Toro (May 26, 2010)

Don't know.  Risk assets aren't cheap enough to be at a true bottom.

My thesis is that we are going to trade in a range for some time, perhaps several years.  Maybe that range is 900-1200 on the SP500, I don't know.  But I don't think that the market is going to hit new highs anytime soon.

But maybe I'm wrong.


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## william the wie (May 26, 2010)

The only rule of thumb that is surefire is 1 oz of gold = DJIA is a bottom or close enough for government work. However bottoms are often formed without getting that low. Therefore I am a huge fan of black swan strategies, asset allocation and hedging. I have June and Dec 120 straddles plus 105 June xsp straddles I am waiting to unwind some commercial property I have interest in and my wife is over invested in bonds. My other assets, if any, I would prefer not to mention but I have no debts. I will be unsurprised by a Dow 3K-20K by the end of this year hence the straddles.


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## hvactec (May 27, 2010)

This market looks like it's rigged to me.
It just don't make sense at all


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## tommywho70x (May 27, 2010)

hvactec said:


> This market looks like it's rigged to me.
> It just don't make sense at all



best to let the grownups get suckered into that fraud and us immature types stick to tangibles.


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## Terral (May 27, 2010)

Hi Rabbi:



The Rabbi said:


> Where is the bottom on the current market?



There is no bottom to the Housing Market, which means there is no bottom to the other markets. Period. The fundamentals ARE BROKEN, because the Consumer/Tax Bases are eroding right before your very eyes. The primary causes of the coming Economic Collapse are:

1. Worker Displacement of American Workers 'out' of the local job markets caused by:
2. NAFTA Offshoring of the manufacturing base.
3. 23 Guest Worker Programs.
4. 20 to 30 MILLION Illegal Alien Foreign Nationals.
5. Outsourcing of service sector JOBS to other nations like India.
6. Walmart Global Conglomerate-like Companies that import Chinese goods and put U.S. 'Mom & Pop' companies out of business. 
7. ObamaCare driving Health Care costs 'up' to create 'hiring freeze' for struggling U.S. Companies.



The Rabbi said:


> With so much uncertainty out there it doesn't make sense to be in anything but cash right now.



All the fiat currencies are losing value against gold!!!! Five ounces of gold were required to buy the S&P in 2000. However, today the entire S&P can be bought for less than one ounce of gold! The U.S. Dollar is worthless, but the other currencies just happen to be losing value faster than the greenback. I would buy food stocks, guns, ammo, survival goods and 'then' gold ... 



The Rabbi said:


> The downside potential is enormous, with sovereign debt default, municipal defaults, and bad gov't policy just around the corner.



Bad Govt Policy has been around for decades! The true national debt is far beyond 100 Trillion Dollars right now! 



The Rabbi said:


> Prices on stocks have come down but I am thinking they will need to go further to make up for all the risks.
> Any thoughts?



The stock markets will crash in the day that STUPID day traders wake up and realize that the U.S. Dollar is WORTHLESS. Right now the entire system is running on mere confidence that is dwindling. The markets only tell us if the STUPID day traders are believing Obama's LIES. Eventually the Las Vegas-like Charade will collapse when Obama's house of cards comes tumbling down ...

GL,

Terral


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## boedicca (May 27, 2010)

The market is being supported at higher levels than it deserves because interest rates are virtually 0%.   This encourages riskier investments to have a chance to make something - which is exactly in the interests of big money that is busy extracting whatever wealth has been accumulated by the middle class.

Once the middle class is driven to a further state of fear and panic, watch for the Feds to drop the Guaranteed Retirement Act into the mix in order to nationalize the remaining assets in 401Ks to offset some of their spending binge.


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## william the wie (May 27, 2010)

I don't really have anything useful to add on the bond thread but I would like to point out that innovation/growth is funded by junk bonds. If junk bonds (BB+ and lower) are not doing well then neither is the economy or the capital markets.


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## Toro (May 27, 2010)

Hey, Rabbi made a post questioning that the bottom was in, and guess what - it was the bottom!  At least in the near-term.  Maybe we'll fall back down to lower lows.  In fact, I'm expecting it.  But for now, Rabbi called the bottom, even if he didn't mean it.

Well done, Rabbi!


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## The Rabbi (May 27, 2010)

Toro said:


> Hey, Rabbi made a post questioning that the bottom was in, and guess what - it was the bottom!  At least in the near-term.  Maybe we'll fall back down to lower lows.  In fact, I'm expecting it.  But for now, Rabbi called the bottom, even if he didn't mean it.
> 
> Well done, Rabbi!



Pshah.  That was the bottom.  For the week.  What we saw today was a lot of short covering with the market oversold ahead of a long weekend/shortened trading Friday.
No, I expect next week to get uglier.  THere is no reason to own stocks now. Now compelling story that I can see that would justify higher valuations.  But there is plenty to justify lower ones.


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## saveliberty (May 27, 2010)

MADRID - Spain's governing Socialists have won approval for a 15 billion euro ($US18.4 billion) austerity package by a single vote, but the narrowness of the victory raised doubts over the government's ability to steer the country through an economic crisis. 

The razor-thin majority piled pressure on Prime Minister Jose Luis Rodriguez Zapatero, who has been forced to ditch his party's traditional alliances in pushing through spending cuts and labour reforms as markets fret Spain could suffer a similar crisis to Greece but on a larger scale. 

The prime minister called off a scheduled trip to Brazil on Thursday, *as an end-May deadline loomed for an agreement with unions and business on wide-ranging labour reforms *- a key policy demand by international markets. 

Unions met Thursday and warned that they would call a general strike if the government goes ahead with changes to labour market rules without their consent, saying there were still big differences with business on the reform. 

*They said agreement may not come before the end-May deadline set by the government. A regular Europe-wide meeting of unions is scheduled to take place in Brussels on June 1*.

Spain's parliament backs austerity | News | Business Spectator

A missed deadline here will be the reason for a tough week ahead.


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## Toro (Jun 7, 2010)

The answer to the OP is "no" at least not yet.

It was pretty clear around noon that the market was going to go lower when it couldn't hold the lows on Friday.  We had to rally and hold the gains today but we couldn't do it, so they sold stocks hard into the close.  

There is a lot of technical damage in the market and I think there is more downside to come.


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## The Rabbi (Jun 7, 2010)

I agree completely. Lots of reasons to sell, few reasons to buy.


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## saveliberty (Jun 7, 2010)

The big question:  When will the small investors inject new money into the market?

At this point it is just one big retreat.  My upside has to be much better than the down before I'll budge.  I'm thinking that is around 8800.


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## william the wie (Jun 7, 2010)

saveliberty said:


> The big question:  When will the small investors inject new money into the market?
> 
> At this point it is just one big retreat.  My upside has to be much better than the down before I'll budge.  I'm thinking that is around 8800.


 That big question has a lot of little questions inside of it:

At this point a Gold bull market in the euro is causing a real shortage to develop in anti-inflation investments and driving up the costs of US imports. So why buy equities?

More people are running out of UE bennies and going homeless. How can they add to consumption?

More state and local governments are teetering on the edge of insolvency/bankruptcy every week. The muni-treasury hedge of a few months back has destroyed a huge chunk of the nation's private capital so where will the capital come from?

More information about missteps by the current administration's economic team going as far back as to when they were part of the Clinton economic team liquidating Long Term Capital Management keeps dribbling out. Two memoirs of former Bear Strearns CEOs are supposed to come out later this year. So, if evidence is presented that most of the current administration's economic team knew in 1998 that a real estate meltdown was building and did nothing ("House of Cards" William Cohan) and that is what is going to be claimed who will trust this administration not to screw the pooch again? Bear Stearns stayed out of the LTCM bailout entirely and Lehman contributed only a third as much other participants. How come Geithner and Summers didn't figure out that Bear and Lehman were sending out signals of pending insolvency? A totally unfair question I will grant you but it will be asked.

With that much bad news in the pipeline who, besides insiders, has enough information to take unhedged long positions? Where is a surefire bottom above 1200 DJIA? Why is anyone going to buy into all of the recovery hype?


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## Mini 14 (Jun 8, 2010)

What makes no sense to me are the metals. How often over the past year have we seen one of the metals rising while all the others fall? Just last week gold rose $8 one day while silver and platinum fell. 

It tells me there are a LOT of people in the markets who don't know what they are doing, and that makes it dangerous even for those who do.

But the world is driving the metals as well. As the dollar continues to weaken, even copper is becoming a sound investment. 

How soon before the government again calls in all the metals, and makes it "illegal" for citizens to possess?


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## The Rabbi (Jun 8, 2010)

Mini 14 said:


> What makes no sense to me are the metals. How often over the past year have we seen one of the metals rising while all the others fall? Just last week gold rose $8 one day while silver and platinum fell.
> 
> It tells me there are a LOT of people in the markets who don't know what they are doing, and that makes it dangerous even for those who do.
> 
> ...



The dollar has been strengthening.  Silver and platinum are industrial metals and the expectation is there will be less production overall in the coming year.


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## Douger (Jun 8, 2010)

If you are in a position to do it get the hell away from the dollar and Euro.
I made a nice sum when I went from the dollar to the euro at 117 and bailed when it reached it's artificial 143.
Now I only have Can$, Aus$, Chilean peso, Hon. Lempira and Br. Real.....and a few Cordobas and Colones in my shirt pocket for fun tymez.


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## Care4all (Jun 8, 2010)

silly question i suppose but are there choices in most people's 401k's to choose an investment that is not invested in the stock market?  like, can you purchase certificate of deposits, that are safe, with 401k money/company match money?


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## saveliberty (Jun 8, 2010)

william the wie said:


> saveliberty said:
> 
> 
> > The big question:  When will the small investors inject new money into the market?
> ...



The Wall Streeters will not let the market fall too far.  It isn't in their best interests.  The market is totally rigged at this point.  Misleading corporate and government reporting and on and on....


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## The Rabbi (Jun 8, 2010)

Care4all said:


> silly question i suppose but are there choices in most people's 401k's to choose an investment that is not invested in the stock market?  like, can you purchase certificate of deposits, that are safe, with 401k money/company match money?



Not silly at all.
You can use your 401k to invest in a very wide range of things.  That includes gold and real estate, as well as CDs and bonds.


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## william the wie (Jun 8, 2010)

The Rabbi said:


> Care4all said:
> 
> 
> > silly question i suppose but are there choices in most people's 401k's to choose an investment that is not invested in the stock market?  like, can you purchase certificate of deposits, that are safe, with 401k money/company match money?
> ...


Well it depends on the company plan, the less options the less it costs the company to offer the plan.


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## Baruch Menachem (Jun 8, 2010)

Don't see a bottom for quite a while yet.

Well, unless Manifold or VanYank post.

We still have way too high unemployment, taxes are going up, the states and the federal government are not letting go of silly spending, obligations and entitlements are not being tamed.

In order for the market to recover, the government needs to address the fundamental problems they are causing.    Instead of fixing issues, they are compounding them

Now it the time to prepare for storms for a long time


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## Paulie (Jun 8, 2010)

saveliberty said:


> william the wie said:
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> 
> > saveliberty said:
> ...


Bullshit.

The "wall streeters" also make their money on shorts.  The market can rise or fall and the "wall streeters" will be just fine.


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## saveliberty (Jun 8, 2010)

Paulie said:


> saveliberty said:
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> > william the wie said:
> ...



They make money on the volitility, so a continued drop of the down to 1200 DJIA nature would not be helpful.  Big slide followed by a nice jump works much better.


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## Paulie (Jun 9, 2010)

saveliberty said:


> Paulie said:
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> > saveliberty said:
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You don't understand how the markets work apparently.  If you have heavy short positions, nothing could be better for your upside than a continued drop in the markets.


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## saveliberty (Jun 9, 2010)

Paulie said:


> saveliberty said:
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> > Paulie said:
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I understand markets well enough to know that I can make much more money on the swings than just a massive short.


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## Paulie (Jun 9, 2010)

saveliberty said:


> Paulie said:
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> 
> > saveliberty said:
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That may very well be the case, for you.  I'm simply commenting on the fact that you said a drop would not be helpful, when in fact it would be for those who are short.


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## peter (Jun 9, 2010)

The Rabbi said:


> Where is the bottom on the current market?  With so much uncertainty out there it doesn't make sense to be in anything but cash right now.  The downside potential is enormous, with sovereign debt default, municipal defaults, and bad gov't policy just around the corner.
> Prices on stocks have come down but I am thinking they will need to go further to make up for all the risks.
> Any thoughts?



I guess you'll miss the bottom even if you try hard. Current market can be in "little correction", which was obvious, when Dow hit 11,000. I expect Dow to rise "sometimes in the near future" and dollar to strenghten against euro.


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## The Rabbi (Jun 9, 2010)

peter said:


> The Rabbi said:
> 
> 
> > Where is the bottom on the current market?  With so much uncertainty out there it doesn't make sense to be in anything but cash right now.  The downside potential is enormous, with sovereign debt default, municipal defaults, and bad gov't policy just around the corner.
> ...



I expect I will sleep with super models.
What makes you think this?


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## peter (Jun 9, 2010)

The Rabbi said:


> peter said:
> 
> 
> > The Rabbi said:
> ...



I guess you will be lucky 

Anyway, sometimes market HAS to go up. Now, tomorow, next month ...


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## Toro (Jun 9, 2010)

Today's action was a great illustration of bear market action.

We opened strong and sold into the close to take us negative for the day.  This tells me there is more downside to come.

We have had many days like today over the past month.


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## The Rabbi (Jun 9, 2010)

Toro said:


> Today's action was a great illustration of bear market action.
> 
> We opened strong and sold into the close to take us negative for the day.  This tells me there is more downside to come.
> 
> We have had many days like today over the past month.



Yes.  Maybe short covering in the morning followed by fundamentals. Who knows?  I know there is no reason to buy and every reason to sell right now.


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## Neubarth (Jun 10, 2010)

The Rabbi said:


> Toro said:
> 
> 
> > Today's action was a great illustration of bear market action.
> ...


Oh Learned Man of the Sacred Scrolls, I feel that the powers that be will try to put in a bottom here just to lure more fools into the market.  We could very easily see a 1000 point improvement over the next few weeks.  But then what?

China now claims that their exports soared fifty percent in a month.  Though I doubt that is accurate, I will accept it for the time being.  They have lied tremendously in the past as anybody who has followed their machinations in the market knows.

The US economy has shown improvement, but we are still not generating enough jobs to make up for the young people and immigrants who are entering the job market. The DOL, of course, just like always will continue to deny that they are there.

So what do we have?  It still looks like a half empty glass to me.


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## saveliberty (Jun 10, 2010)

You can buy on a Friday...as long as you dump it on Monday the last couple of weeks.


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## Neubarth (Jun 10, 2010)

Toro said:


> Today's action was a great illustration of bear market action.
> 
> We opened strong and sold into the close to take us negative for the day.  This tells me there is more downside to come.
> 
> We have had many days like today over the past month.


The selling late in the day is characteristic of the Goldman Sachs Machine Trading program.  IF Goldman is satisfied that they have lowered the market as far as they can, then and only then will we see a rally.  

GS has been having trouble with their downward movement program that I told you a month ago appeared to be in progress.  They may give us a sucker rally of up to 1000 points in the near future.


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## Terral (Jun 10, 2010)

Hi Rabbi:



The Rabbi said:


> *Market Bottom? *Where is the bottom on the current market?  With so much uncertainty out there it doesn't make sense to be in anything but cash right now.  The downside potential is enormous, with sovereign debt default, municipal defaults, and bad gov't policy just around the corner.
> 
> Prices on stocks have come down but I am thinking they will need to go further to make up for all the risks.
> Any thoughts?



No!!! There is "NO" Market Bottom! Say that to yourself 1000 times and then believe it! Why is there "NO" Market Bottom? Thank you for asking:

1. There is no bottom in the Housing Market, because:

a. Too many Illegal Aliens have taken too many JOBS from real American Workers, which has destroyed the Consumer Base and the local Tax Base. That is why "Demand Destruction" is running rampant throughout the U.S. Economy, which is the ONLY reason that inflation has been kept in relative check amid all the printing of dollars.

b. Too many Guest Worker Programs (23) have displaced too many U.S. Workers from the job market, which means fewer and fewer buyers to make offers on your house.

c. NAFTA Offshoring of the manufacturing base has shipped FAR too many JOBS overseas, which means fewer buyers to make offers on your house that has gone into foreclosure ...

d. Too many foreclosures in the neighborhood has kicked the bottom out of the housing market and there is no end in sight.

2. The U.S. Dollar is toast. The only reason that the worthless U.S. Dollar has apparent strength cuckoo is because the Euro and Pound are decreasing in value at an accelerated rate. Eventually the idiots buying worthless dollar will realize the game is crooked and the USA will go the way of Greece and other foolish countries that refuse to rein in spending. Yes. Stock prices can go up, but in worthless dollars. You could buy the entire S&P Index for five ounces of gold in 2000, but today the S&P is worth 'less' than a single ounce of gold. Do the math ...

The markets are being propped up today by all of the Stimulus Bailout Money and the Banks are borrowing money from the FED Window at near zero percent to invest in the crooked stock markets. The current GDP figures include bank profits from gaming the system, when in reality the US Economy imploded in March of 2009; after being wired for implosion on September 18, 2008 (Paulson + Bernanke 3-page memo/template to Congress). The stock markets are held up by confidence and LIES and the entire system will CRASH when idiot day traders wake up and smell the coffee ...

GL,

Terral


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## Modbert (Jun 10, 2010)

Stock Advice from Terral? Guess he's branching out.


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## william the wie (Jun 10, 2010)

Modbert said:


> Stock Advice from Terral? Guess he's branching out.


 I just wonder if he realized this was a stock market thread


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## Argene (Jun 10, 2010)

The Rabbi said:


> Toro said:
> 
> 
> > Today's action was a great illustration of bear market action.
> ...



Some guy said that we might see a 1000 point rally, and you say that there is every reason to sell right now.  So, which one of you two is the most correct? I think people who come right out and say how much it is going to move are the most brave, but they can also be foolish.  Is there anybody else that brave?


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## Argene (Jun 10, 2010)

Terral said:


> Hi Rabbi:
> 
> 
> No!!! There is "NO" Market Bottom! Say that to yourself 1000 times and then believe it! Why is there "NO" Market Bottom? Thank you for asking:
> ...



Looks like you were wrong today.  Better luck tomorrow.


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## The Rabbi (Jun 11, 2010)

Argene said:


> The Rabbi said:
> 
> 
> > Toro said:
> ...



I am correct.  Why will we see a 1k point rally? We might see 500 in short covering and some short term buying but the truth is the economy is not getting better and there are scary events like soveriegn debt default and municipal debt default waiting around the corner.


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## saveliberty (Jun 11, 2010)

Decreased consumer spending numbers bode poorly for any sort of near term DJIA increase of a 1k nature.  I saw it coming last month and see it again this month so far.


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## foggedinn (Jun 11, 2010)

Electric utilities. Dull, boring, heavily regulated, and they always seem to make money.  It's worked for me.  Try ticker SO.


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## Toro (Jun 12, 2010)

Argene said:


> The Rabbi said:
> 
> 
> > Toro said:
> ...



I've worked in the investment business for nearly 20 years and I rarely ever make such prognostications.  It has been my experience that "brave" and "foolhardy" are interchangeable when making predictions.

As for the recent market action, it is acting schizophrenic.  Almost all the relevant action is in the last hour or two.  Friday was no exception.  A program came into the market in the last 30 minutes and drove the indices higher into the close.  There is a near-term bottom with some foundation.  Plus, sentiment is bearish right now.  That could give stocks some near-term some support.

My guess is that we have a bit more upside, but that's all it is, a guess.  I have no idea what is going to happen next week.


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