Dead Cat Bounce?

[4ARedOctober Super Moderator Find all posts View Profile Close 4ARedOctober]

Can you say capitulation? Yesterday was full verse and song capitulation. We will see if the dead cat bounces today and then what happens. I am dipping my toes in the water......this is a buying opportunity of a lifetime....that is if you have the time to wait it out.

It is still ugly out there.....but when its most dire....and expiration week is even more fun.

YouTube - Take the pain! Take it! Platoon!

[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

On the other hand, some say things are going to roll around near bottom until February. I've already put some money back in the market-but much less than I took out last year. I think the Dow could hit 7000 before bouncing if it hasn't already hit bottom.

[joycapecod Silver Contributor Find all posts View Profile Close joycapecod]

I put a small amount back in yesterday. I wish I could convince DH to put more in, but he was just forced to early retirement...in fact today is the "LAST DAY." He's not taking it well at all.

The next several months should be rather interesting. We've been through this before, but not at this depth if memory serves me correctly.

Joy

[dougp26364 Senior Member Find all posts View Profile Close dougp26364]

Before pronouncing that the market has hit the bottom, best to take a look at history and all the advice given back in the 1930's. Just like looking down a well the depth and where the bottom can be deceiving.

When this started to hit the fan, I thought 8,000 was probably going to be the bottom. Then the big three car makers had to open their mouths and say they needed a bailout, all but destroying consumer confidence in their ability to remain afloat and what that means for unemployment across the midwest. Next came the revelation that municipalities actively participated in a house of cards that's now blown up in their face and looks to be circling around to bite them in the hind quarters.

So what's next? Who's next? Until all the bad business practices and greed of the past several decades is fleshed out, no one really knows where the bottom is going to be. The only thing I feel certain of is we haven't been able to see it yet. With each day, another company thinks it's wise to confess it's sins for a shot at the pie known as the government bailout. Every time they do that, consumer confidence takes another hit and so does their business. Who wants to buy something from a company that might not be there tomorrow.

There will be small rallies as people jump back in, thinking we're close to the bottom. But as companies announce more losses, more layoff's are announced, more jobs disappear forever from the economy the futher into the pit we'll be thrown.

I would not be surprised to see the dow get below 6,000 by the end of the year and, I shudder to say this, but getting below 5,000 doesn't seem all that far fetched anymore.

[4ARedOctober Super Moderator Find all posts View Profile Close 4ARedOctober]

I am not pronouncing that the market has hit the bottom...A dead cat bounce is not calling the bottom...if that is what you think I am saying it is not. It is impossible to pick tops and bottoms. TA will help determine support and resistance.

The real challenge is when to get in and what to buy. I am starting to buy at these levels and leaving some powder dry for what happens near term. I am carefully picking companies that I think will be around for the long term. I reduce my cost basis by selling naked puts and then selling covered calls as it churns up and down.

The move back up, whenever it is, is usually a nice one......but hard to confirm until well underway and much of it missed.

Everyone needs to make their own decisions regarding finances and don't go by the advice of anyone here or on most message boards. We are just giving opinions. We could be wrong and we could be right or both at the same time.....decide for yourself.

I have been waiting some time for prices to come back down to reality. But this economic downturn is and will continue to be rough. I will still dollar cost average on our long term hold accounts like our 529's.

The only advice I offer anyone who asks me.....the market will go up, down, or sideways...you decide.

Before pronouncing that the market has hit the bottom, best to take a look at history and all the advice given back in the 1930's. Just like looking down a well the depth and where the bottom can be deceiving.

When this started to hit the fan, I thought 8,000 was probably going to be the bottom. Then the big three car makers had to open their mouths and say they needed a bailout, all but destroying consumer confidence in their ability to remain afloat and what that means for unemployment across the midwest. Next came the revelation that municipalities actively participated in a house of cards that's now blown up in their face and looks to be circling around to bite them in the hind quarters.

So what's next? Who's next? Until all the bad business practices and greed of the past several decades is fleshed out, no one really knows where the bottom is going to be. The only thing I feel certain of is we haven't been able to see it yet. With each day, another company thinks it's wise to confess it's sins for a shot at the pie known as the government bailout. Every time they do that, consumer confidence takes another hit and so does their business. Who wants to buy something from a company that might not be there tomorrow.

There will be small rallies as people jump back in, thinking we're close to the bottom. But as companies announce more losses, more layoff's are announced, more jobs disappear forever from the economy the futher into the pit we'll be thrown.

I would not be surprised to see the dow get below 6,000 by the end of the year and, I shudder to say this, but getting below 5,000 doesn't seem all that far fetched anymore.

[dougp26364 Senior Member Find all posts View Profile Close dougp26364]

In that case, at my age I'm getting back in by dollar cost averaging on the S&P 500. I'd been out of the Market for the last several years but started slowing reinvesting a few hundred every month for the last 11 months. So far, I'm down 47%. Great investment strategy so far hugh?

[4ARedOctober Super Moderator Find all posts View Profile Close 4ARedOctober]

Yeah it is tough. But when the market is low like this is where dollar cost averaging starts to pay off if you can stretch it out over some years. Better than throwing it all in 11 months ago. I may just up my contributions on our 529's and annuities at these levels. We are a good 15 to 20 years from retiring ourselves.

[3kids4me Super Moderator and Super Mom Find all posts View Profile Close 3kids4me]

I lost a bunch the last time this happened by staying in and waiting. I moved about a third of my 401k rollover to cash early this year, which has now become a half of what is left. I've just sold more, and I'm staying out.

My husband works for Citigroup. The stock was $50 a year ago and now it's at $5. There is just no way anyone could have predicted that.

[vintner Super Moderator Find all posts View Profile Close vintner]

We call it a frozen iguana bounce.

It is based on the cold weather they get in Florida when the iguanas will kind of freeze up, then fall out of the trees. They will get going once the weather warms up.

A frozen iguana is more entertaining to watch than a dead cat.

[4ARedOctober Super Moderator Find all posts View Profile Close 4ARedOctober]

Citi is getting hammered that is for sure. They are talking breaking it up. I have a good friend who works there.....for now he says.

I lost a bunch the last time this happened by staying in and waiting. I moved about a third of my 401k rollover to cash early this year, which has now become a half of what is left. I've just sold more, and I'm staying out.

My husband works for Citigroup. The stock was $50 a year ago and now it's at $5. There is just no way anyone could have predicted that.

[4ARedOctober Super Moderator Find all posts View Profile Close 4ARedOctober]

LOL.....this is more like a splat. Not much bounce to it. But it is expiration which hardly ever makes much sense.

We call it a frozen iguana bounce.

It is based on the cold weather they get in Florida when the iguanas will kind of freeze up, then fall out of the trees. They will get going once the weather warms up.

A frozen iguana is more entertaining to watch than a dead cat.

[4ARedOctober Super Moderator Find all posts View Profile Close 4ARedOctober]

Well the darn cat did bounce. We shall see what follow-up there is next week. Obama needs to act like he is connected and has a plan....uncertainty is our biggest hurdle now.

[dougp26364 Senior Member Find all posts View Profile Close dougp26364]

Yeah it is tough. But when the market is low like this is where dollar cost averaging starts to pay off if you can stretch it out over some years. Better than throwing it all in 11 months ago. I may just up my contributions on our 529's and annuities at these levels. We are a good 15 to 20 years from retiring ourselves.

I just increased ours another 1.5%. The market may go lower but, like you I've got another 15 to 20 years, probably more since I, oddly enough, enjoy my job. It's just the administration/management that hangs out at our hospital that I don't like.

[dougp26364 Senior Member Find all posts View Profile Close dougp26364]

Well the darn cat did bounce. We shall see what follow-up there is next week. Obama needs to act like he is connected and has a plan....uncertainty is our biggest hurdle now.

One small bounce today but there's likely to be a lot more spat's than bounces.

Surely there's a frozen iguana bounce drink out there. I guess that could be a good Friday night drink after a weeks worth of watching the stock markets version frozen iguana's hit the ground.

[dougp26364 Senior Member Find all posts View Profile Close dougp26364]

Most of the time I really don't look at my balance and, since I only started back into the market back in January, it really doesn't bother me.....much. But I just took a look at my rate of return since January and that 401K which became a 201K looks like it's now a 101K. My rate of return, even dollar cost averaging like I've been doing, is -67%.