They might be slightly connected on daily fluctuations but over 20 years they have been completely different markets. US market is definitely overvalued and has been for years - I don't know when the correction will happen - you might be right and it will happen now.
Be prepared for a 500+ point rally tonight....followed by a 250-....then up another 300+.....ETC....... the bottom is probably here already.
US Dollar Index is coiled ready for a big move north in the medium term, which should drag stocks even lower. Been knocking on the 100 door for sometime now...
I agree. Initially that would probably be true. Long term, however, will see the implosion of Euro bonds and the rush to safety...ie U.S. stockmarket....this will be the only game in town. There will be no choice for fund managers. Overseas capital will fly to the U.S. because it will be the only place to get capital gain and currency gain in the one hit. After several years of this, those that buy on fundamentals will finally realise that 'dividends' are irrelevant. We will see the u.s. dollar skyrocket as the rush for the currency will drive it to new highs. The dollar and dow will rise together, contrary to what people believe 'should' happen.
I think your longer term will happen much sooner than you expect. Normally, a currency move like the one we are experiencing would take several years. China's mishandling of their economy is speeding things up and I think everything will happen much quicker this time. Since I earn in USDs, I hope your longer term scenario is correct.
Hey....I was using the scale of 'long term' that my kids use.................'ages ago' means last week....a 'long time' is about a month
the Dow 500 + did not quite go to plan but I might nail the 250 - , Could be time to give up my day job and start trading
All the prognosticators who say the US dollar is going way up are going to be wrong possibly. We've been hearing for months and months that the interest rate hike was dollar positive, but nobody told that to the dollar and it still is below 100, as it's been for a long time. Since I am out of all stocks I don't mind watching the stock market get whacked. All the old retired guys at the gym are crying that their retirement money is evaporating. I guess nobody told them stocks don't "always" go up like many in the US with short memories seem to think. Hopefully the fed gets scared as the stock market drops and they reverse course on the interest rates or go negative interest rates, that should be good for PM's but who knows anymore? Jim
Capital is like water, it will always flow to the lowest point. In the crisis that we are facing, trillions upon trillions of dollars will be looking for shelter from the storm. No other markets are capable of absorbing this kind of capital like the u.s. dollar and u.s. stockmarket. The meltdown in the bond market as the reality of bankrupt nations will be the height of the storm. Considering world bond markets are many, many times bigger than all world stock markets, any shift from bonds to stocks will send stocks to all time highs. Stock market corrections are a normal feature and that is all we are seeing now.
The run up in the US stock market after the 2008 crash till recently was built upon intervention by the US Fed (QE 1, 2, 3, etc) and lowering interest rates to zero, basically corralling sheep into the stock market because it was all that was left to get a return. The US economy never really recovered all it lost and probably never will. The Fed liked to tout the unemployment rate last year but that is bogus because once you are off unemployment benefits you don't get counted anymore as "unemployed" even if you don't have a job. I don't think we will see the stock market kick a$$ again in the US unless the Fed give more goodies to Wallstreet, like more QE, dropping interest rates to zero or negative, etc. But I am not making any predictions. Just my opinion. Jim
The tsunami of cash is not from within, it is coming from outside the U.S.. Domestic issues will be overridden. Your economy will be tanking and the stockmarket will rise. People will scratch their heads and question how could it be.
DOW down more than 500pts before rallying into the close. (you got a 500 day tolly!) SPX regaining that 1865 support level.
Spoke too soon - SPX not closing above support.. I'm still short for what "may" be the best money making opportunity of this decade! Remains to be seen...
I think you can take comfort in the fact that I am one of the worst at picking the direction of the stock market.
...and yet the ASX is rallying today. Very difficult to pick these short term market moves. Surely a decent relief rally is due, even if the long term trend is down.
