About those big one day stock market rallies
 

Wikipedia lists the 20 biggest one day rallies:

List of largest daily changes in the Dow Jones Industrial Average - Wikipedia, the free encyclopedia

17 of them occurred in the worst years of Great Depression (1929-33).

2 of them (#5 and #6) happened in October, 2008.

Lesson: These one day rallies are traps. The worst is yet to come.

You know the chart on the left that you are referring to as having 10/08 as 5 and 6 are for % gains right? I thought you were talking losses.

He is just showing that in the worst of financial times, the stock market will have the biggest swings (both UP and down). So using the Great Depression as an example, you can see how things are probably gonna get alot worse before they get better.

Yup.

Point is going long in this market is a sucker's bet.

http://img.photobucket.com/albums/v2...its_a_tarp.gif

Ah, Finally something we agree on. :)

Ah that makes sense.

This man speaks truth.

LOL when I post GET OUT I get flamed LOL.
Well at least now I have better evidence.

GET OUT!!!!

And short the damn market.

FTW:
SH, RWM, DOG, PSQ. Look how well they've done.

Isn't a massive sell off just going to cause the whole thing to completely tank though? I thought thats what happened in 1929?

It's a self fulfilling prophecy you dumb fuck.

??

Elaborate?

It might be more accurate to liken it to a non-zero-sum game, such as The Prisoner's Dilemma. (Yes, I admit it, I'm a sociology geek- I love game theory.)

All else being equal, assume that there are two possible actions: sell and short, or stay long.

If everyone (including yourself) remains long, then the market remains relatively stable.

However, if some people sell and short the market, then the market will likely decline. Those who remained long will suffer.

Therefore, because it is likely that some people will sell and short, it is in your best interest also to sell and short, because even though this will cause greater harm overall, it is likely to cause less harm to you than if you were to remain long.

Is that clearish?

Yes, but question. What would really happen if nearly everybody jumped out of the market? Is the world really that dependent on it for overall success?

JohnTitor.txt

Fuck it. For now, I'm out. Jason, if the market closes up 30% at the end of today, I will physically kill you. :D

Jason,

#1 I'm personally getting kinda tired of these "financial" BS posts so I suggest you take your opinions to a more specific forum say like Yahoo finance or elsewhere where you can have all the fun you want.

#2 Getting tired of the comparisons to 1929 and the panic mongering. Granted, anything can happen. Hell, a presidential assassination or terrorist attack in the next few months could change anything, BUT the current fundamentals versus the depression of 1929 are so different, AND there is DATA (not people/expert opinions) to back that up. What really amazes me is that when it comes to car stuff, you are very analytical with DATA vs. opinions, but when it comes to financial stuff you often solicit the opinions of so called experts and very loose data. Take this post for example, volatility does not = downturn, in fact if you look at the data, there is volatility almost before any moves both upside and downside. And financial opinions are like political spin, you can make arguments either way, BUT there are certainly reassuring data that the economy is stabilizing a bit and as said before the market moves before the economy. As an example, some of the data I am referring to are the recent stabilization of home sales in the state of CA which is often 2-3 months ahead of the rest of the nation in terms of economic cycles AND Walmart's recent quarterly results. Hell, if Walmart posted terrible results, I certainly would be much more scared than now.

Anyway, SHORT version ----> Save your financial BS for a financial forum please. Thanks.

oh noes, just moved some more cash reverses into shares....

This rally may only last a few days. For those who rode the snake down this far, now would be a good time to get out of long positions and short the market.

Read what Roubini says, one of the guys who was right lots of times, about this recession. He explains why this market has a long way down. The unraveling of the hedge funds:

FT.com / Comment / Opinion - The shadow banking system is unravelling

Don't click them. Less effort that reading or typing. In fact, ZERO effort.

Oh, and I have to point out, you said "financial BS"... and this forum's title is .... "Insert BS here" LOL.

While this is the BS section, I still think you get carried away. If anything it would be nice to see more miata specific post from you more than the political stuff. This is 'miataturbo.net'. I think 90% of your post from the last few months are extremist political or about how everything's corrupt, the sky is falling, etc.

After today's 7% drop, are you guys still gonna crucify me for trying to point out WHY one should get out of the market?

Figured that everyone would be standing on pins & needles waiting for an inevitably disappointing black Friday, so I bought about $40k worth of short funds. (still keeping a large cash reserve.) Finally made some money today for a change.

We'll see if this continues into a bona-fide death spiral, or if it's just going to be a hiccup. Never thought I'd be the one to say this, but burn, baby, burn.

Joe, I hope you are in the single bear funds (SH, RWM) .... just hold on to them. Historically the market in these conditions do wild ups and downs with an overall down trend. If I had listened to GaryNorth when he advised to buy and hold SH late last year, and in Mid September, I'd be up 30-35% by now, instead of trying to time the market.

If you want to play with the double (200%) bears, (SKF, TWM, QID), you have to be very careful.. they shoot up, then crash down even faster. The double bears have a time value loss - they creep down when the market is flat. Only use a small portion of your portfolio, and when you go in, always have an exit strategy (e.g. trailing stop loss), and then again you have to watch it like a hawk. Very stressful given how volatile this sick market is. I barely have the stomach for it.

Having said that, the rise a couple of weeks ago from 115 was predictable, and so was the rise from last Friday's <140. If you are brave, you can short these double bears when they peak. The drop from recent exponential rise to the peak at 290 was also predictable, especially with Options Expiry Friday and where the Max Pain was - market is almost always manipulated to move towards the "max pain" point when approaching Options Expiry Friday - the amazing thing last one was that it occurred in the last 45 minutes of trading on the last day!. You can google "max pain" to see what I mean. I have a friend who does serious trading and he was the one that explained this to me. He says all serious traders know about the legend of the PPT. These 2 articles show startling evidence of said manipulation. The trick for small fry like me is to understand what they tend to do and when:

http://www.webofdebt.com/articles/manipulation.php
http://www.webofdebt.com/articles/stepfordville.php