Sucker Rally or Dead Cat Bounce?

[Morning Dew]

http://online.wsj.com/article/BT-CO-20110809-721856.html

"It's normal to have a bounce back after the downward moves we've had," said John Carey, portfolio manager at Pioneer Investments. "The key is whether this is a sustained recovery or just a sign of bargain hunters coming in and picking up beaten-down stocks."

http://www.insidefutures.com/article/303328/The%20Windy%20City%20Trader%208/9/11.html

So if I were to venture an opinion based on seeing this type of action many times over the years it would be this. I believe we will see a “dead cat bounce” rally”, perhaps back to 11200 for the Dow and 1175.00 for the S&P but the first rise would be a false rally. Most analysts you see on the various “entertainment” business shows are forever and a day bullish. When the market is going up it’s a good time to buy and when the market tanks, it’s a good buying opportunity. This bounce is a likely to be a sucker rally and will induce bottom pickers to jump in. Once this fizzles I would expect one more new low as these late longs exit. I would think that would be the 9800 – 10000 area for the Dow and the 10000.00 level for the S&P and about 1800 for the Nasdaq futures. That should even up the REAL value of the indexes and not the inflated values we have been seeing for the past couple of years. I would expect a few weeks of consolidation at those levels and then a slow creep back up. This would not be like the 2008/2009 rise but much slower as our economy has many problems to work out. But keep in mind we fell to 6400 for the Dow and 660.00 for the S&P at that time so they had a much bigger potential of a sharp rebound. Don’t panic. When things seem the worst, it is often near the bottom which I believe we will see within a couple of weeks of consolidation.

[jwhitesj]

1. It's interesting

I believe there is still value on almost all of the companies that were sold off yesterday. I don't see anything to suggest that stocks were in a bubble state. I expected that there would be a loss of about 1000 over the week and then a slow recovery up to about 12.5k on the dow by the end of October. I dont' see this massive sell off in relation to what happened in 2008 where there was that bubble factor.

[slackmaster]

2. Ask again in six months

Then people will be able to tell.

[spanone]

3. that was a hell of a lot more than a 'bounce back'.....we'll see

[dmallind]

4. funny. people said the same when

It went above 8000 in 2009. And 9000 and 10000 and 11000.....

[taught_me_patience]

5. When the FED promises to keep rates low for 1.5 years

It shows how weak the economy is. Expect long term slow grinding down.

[RKP5637]

8. That's what I got out of it, a statement on how horrible this economy is and

that it's going to be a long haul, and many are going to be ground away.

[Morning Dew]

9. i agree. I think it's going to be a long hard slog.

[tridim]

6. Just a stupid market in general

Worse than any casino, and far more fixed.

[abelenkpe]

7. +1 nt

[RKP5637]

10. I'm not convinced nano-trading isn't involved in some of this. Suppose I

traded the market down and back up, reaping profits on the upside by my algorithm. If these were a joined effort, the little people would sell off, and if I cut the downside just right I would make enough, and then I traded up the upside.

IMO a lot of this trading is manipulated and the SEC is powerless because the trading is so sophisticated the SEC can't keep up with it all.

It's a rigged casino game IMO. There is so much corruption in this country who can keep up with it all and spot those clean or dirty.