Dead cat bounce! Beware of bear market trap ...

Last post 08-24-2008 10:30 PM by majik13. 8 replies.
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  • 07-25-2008 2:24 AM

    Dead cat bounce! Beware of bear market trap ...

    Dead cat bounce!
    Beware of bear market trap ...
    Bernanke and Paulson's smoke, mirrors and hot air are temporarily buoying markets, luring gullible investors back into stocks! Meanwhile, Merrill Lynch just disclosed it was creamed by $40 billion in investment write-downs in the second quarter — $69 billion so far this year.Citigroup has revealed a $2.5 billion loss — and a decline in total assets of a staggering $99 billion so far this year.2.2 million vacant homes for sale.Fannie Mae and Freddie Mac either hold or back $5.3 trillion of mortgage debt. That's about half the outstanding mortgages in the United States.Shares of Fannie Mae plunged 45 percent last week and are down 74 percent since the beginning of the year. Freddie Mac shares fell 47 percent last week, and have fallen 77 percent so far this year. Over the rest of this year, the economy will grow "appreciably below its trend rate" mostly because of continued weakness in housing markets, high energy prices and tight credit conditions. The employment situation has to turn around for the housing market to turn around.Yes, Washington's efforts to rescue Fannie, Freddie and other lenders have lured some investors back into stocks. But mark my words: It will be a move those investors could regret for the rest of their investing lives.Every indicator is virtually screaming that this is nothing more than a bear market trap — a dead cat bounce — and that the worst of this crisis is still ahead of us.There is no way Ford Motor should be over $2 a share and GM over $5 to $6 a share. Wachovia Bank should not be rallying. Any Comments: 

     

  • 07-25-2008 8:16 AM In reply to

    Re: Dead cat bounce! Beware of bear market trap ...

    That is why there is something called "going short" and options called "puts" to take advantage of the stocks that go down. If you are going to be in the market you have to learn these techniques as well as "buy and Hold".  And buy and hold does not mean buy and forget.

  • 07-25-2008 8:27 PM In reply to

    Re: Dead cat bounce! Beware of bear market trap ...

    I am aware of short trading and Options. I’ve been shorting now for about a week and am recovering some losses in the last two days. I have a fictitious account with CBOE where I can take advantage of options trading, unfortunately you can’t take advantage of puts and calls with Wall Street Survivor. I am doing well with my CBOE account because of the opportunity to trade options. Thanks.

  • 08-07-2008 2:00 PM In reply to

    Re: Dead cat bounce! Beware of bear market trap ...

    teamf05:
    Dead cat bounce!

     

    Love that analogy !!

    Let me expand... as rigor mortis sets in, the bounce will become progressively less "springy". That's when the cat  finally comes to rest (stinking to high heaven)

     

  • 08-07-2008 6:55 PM In reply to

    Re: Dead cat bounce! Beware of bear market trap ...

    is this a real situation

  • 08-10-2008 3:16 PM In reply to

    Re: Dead cat bounce! Beware of bear market trap ...

    A temporary recovery from a prolonged decline or bear market, after which the market continues to fall.

  • 08-13-2008 3:33 PM In reply to

    Re: Dead cat bounce! Beware of bear market trap ...

     

    Dow 11,553.56 -88.91 -0.76%
    Chart for Dow
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  • 08-21-2008 1:41 AM In reply to

    Re: Dead cat bounce! Beware of bear market trap ...

    Looks like another big down day ahead for Thursday. 

  • 08-24-2008 10:30 PM In reply to

    Re: Dead cat bounce! Beware of bear market trap ...

     There are a few unique factors taking place as we talk. 1 the upcoming elections will have a major impact on the markets. 2 The Fed is bailing every investment firm out and the taxpayer is going to be liable for years to come to the sum of trillions of dollars. 3 The war in the middle east and Afganistan and now the cold war being rekindled.

    All these factors will have a major impact on the markets for the next 2 to 5 years in a very positive way, I'm going to look for companies that supply munitions and other military hardware if McCain is elected, these companies stand to reap fortunes.

    If Obama is elected I'm going to look for companies that produce things like concrete and other building supplies for road and highway construction.

    I'm going to buy as many shares as possible in Fannie and Freddie, it won't matter who is elected the government cannot afford neither of these companies to go under.

    There is always opportunities in the stock market no matter which way the economy is headed, that's the beauty of the stock market.

    Also bio tech, medical supply and pharmaceutical companies are excellent long term investments because the population is aging and more demands will be placed on these type of industries.

    There's always some bull even in a bear market.

     

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