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post #1 of 17 (permalink) Old 07-23-2009, 07:18 PM Thread Starter
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Dow Closes above 9k

Looks like the Dow has closed above 9k for the first time this year and for the first time since last Nov. Is it just me or does anyone else feel that all this talk about Health Care has captured the attention of our Liberal News Stations and they have less time to drum up bad news to beat the economy into the ground. It seems like since Health Care has been in the spot light over the last week the Dow is up almost 800 points. Watch tomorrow it takes a noise dive back to 8500 lol. It seems like the 8500 mark has been the hump that the Dow can't gain enough traction to get over for the past month or so.

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post #2 of 17 (permalink) Old 07-23-2009, 07:25 PM
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Originally Posted by FreightTrain View Post
Looks like the Dow has closed above 9k for the first time this year and for the first time since last Nov. Is it just me or does anyone else feel that all this talk about Health Care has captured the attention of our Liberal News Stations and they have less time to drum up bad news to beat the economy into the ground. It seems like since Health Care has been in the spot light over the last week the Dow is up almost 800 points. Watch tomorrow it takes a noise dive back to 8500 lol. It seems like the 8500 mark has been the hump that the Dow can't gain enough traction to get over for the past month or so.
DOW was at 9000 the first week of the year. 2nd qtr. earnings is driving the DOW up. Has nothing to do with health care.

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post #3 of 17 (permalink) Old 07-23-2009, 07:29 PM
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We'll see if it holds. Someone told me that they expect it to climb once Obama's health plan is destroyed/delayed. Well, he came out and said it could be delayed today so lets see what it does tomorrow.
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post #4 of 17 (permalink) Old 07-23-2009, 07:49 PM
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I think that people can sense that the health care deal is dying if not already dead. The vote has now been delayed until after the congressional vacation which should give the congresscritters some time away from DC and maybe a bit closer to their constituents, and to hear what people are really thinking about this pile of shit. And it gets them away from obamas pressure to pass the bill.

I suspect that when congress gets back together there will be a consensus among enough people to kill it dead.

Now if we could get the cap and trade deal killed.
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post #5 of 17 (permalink) Old 07-23-2009, 08:03 PM
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What are you guys talking about?
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post #6 of 17 (permalink) Old 07-23-2009, 08:06 PM
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What are you guys talking about?
Dow closed above 9000 and we are speculating about what might have caused it.
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post #7 of 17 (permalink) Old 07-23-2009, 08:18 PM
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Dow closed above 9000 and we are speculating about what might have caused it.
LOL, guess it had nothing to do with all DOW 30 reporting a 2nd Qtr profit. You guys need to turn on a TV every now and then.

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post #8 of 17 (permalink) Old 07-23-2009, 08:36 PM
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LOL, guess it had nothing to do with all DOW 30 reporting a 2nd Qtr profit. You guys need to turn on a TV every now and then.
Oh really? You really want to stick with that statement and line of thought, Benjamin Graham?
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post #9 of 17 (permalink) Old 07-23-2009, 09:28 PM
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Obamacare = great for huge business/death to small business.

Of course the blue chips would jump.

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post #10 of 17 (permalink) Old 07-23-2009, 10:39 PM
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The markets aren't really showing what I'd like to see, personally. The rally from March was fueled by companies that were the worst positioned, financially. We ran several matrices and the only correlation between the stocks that ran up from the first of March was that they all had share prices under $5. That, combined with the fact that they were the worst positioned from a balance sheet perspective, means that the March rally was the definition of a junk rally. Q1 earnings were better than expected, for the most part, with the underlying theme being that companies would beat on earnings, but miss on revenues. This is disconcerting, because how sustainable going forward are cost reductions?

Fast forward to Q2 earnings season. There are still a lot of companies beating on earnings but missing on revenues. However, the number of companies reporting revenue matches or beats is much greater than the number from Q1. Interesting fact...as of Wednesday's close, the stocks that had missed earnings this reporting season had outperformed those that had matched or beaten. Again, signs of a "junk" runup, but a little more positive in the fact that we're seeing a significant increase in the percentage of companies that are matching or beating revenue estimates.

Now, we're a value fund. So, we will underperform in "junk" rallies like we've seen. Our two large-cap funds are slightly underperforming the broad market, but our socially repsonsible fund and small-cap fund are blowing the doors off of our index. So, at least the small-cap companies are starting to behave in a more normalized manner.

The earnings "beats" and revenue matches or "beats" are driving the markets higher. In addition, I'm starting to see some real signs come together of a true bottoming of macroeconomic conditions and an upturn. One or two measurements alone might not do the trick (insert "Green Shoots" bullshit from a while back here) but when a lot of them start coming together and working in unison, it drives the markets and sentiment higher.

Given that we're a value firm, we really don't focus on top-down investing. We're definitely more tilted to bottom-up investing. However, my focus this summer has been on the Materials sector with a concentration on hard commodities. If you cover hard commodities, you have to have an opinion from a top-down type of approach. I think things are starting to come together to show a bottom and the very hints of the beginning of a recovery. Now, the recovery will not be some "V-shaped" recovery that was priced in with the junk rally that started the March runup. The two main catalysts driving that are the high and rising unemployment levels and the spike upward in consumer savings rates. We won't have a "V" recovery, not happening. That said, there are still plenty of Industries/Sectors that haven't seen a huge recovery yet, pricing wise, and those are the names we're hitting to position our Fund for the the upswing. The fact that the earnings beats are coming on the back of lower revenue tells me that once revenue does start to turn around and normalize, the profits of companies who have done significant cost reductions will see substantial upside, offsetting somewhat the effects of unemployment and increased consumer savings. Oh well, a portion of my thoughts on the current market...

Last edited by slow99; 07-23-2009 at 11:33 PM.
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post #11 of 17 (permalink) Old 07-24-2009, 06:16 AM
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Oh really? You really want to stick with that statement and line of thought, Benjamin Graham?
Not sure what you do for a living but I am a day trader. 100% of my income comes from trading. Not going to get into this with you but yes I am sticking to my story. If all the banks reported a huge loss and didn't meet/beat expectations the DOW would be in the 7000's right now.

I would rather live my life as if there is a God, and die to find out there isn't, than live my life as if there isn't, and die to find out there is.
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post #12 of 17 (permalink) Old 07-24-2009, 08:45 AM
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Not sure what you do for a living but I am a day trader. 100% of my income comes from trading. Not going to get into this with you but yes I am sticking to my story. If all the banks reported a huge loss and didn't meet/beat expectations the DOW would be in the 7000's right now.
ZOMG, you're a trader!!? Yes, I remember what you do. In fact, I remember a thread from early March where you were acting pretty smug about being a day trader then threw out this gem...

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You can do anything u want in a cash account.
Since you're a day trader, I'll go ahead and tell you "nice reversal" from your post earlier about profits.

Is Alcoa a Dow component? Refresh my memory, I think they are and I don't think they reported a profit. I believe Microsoft met earnings consenus, that's working out well.
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post #13 of 17 (permalink) Old 07-24-2009, 08:57 AM
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ZOMG, you're a trader!!? Yes, I remember what you do. In fact, I remember a thread from early March where you were acting pretty smug about being a day trader then threw out this gem...



Since you're a day trader, I'll go ahead and tell you "nice reversal" from your post earlier about profits.

Is Alcoa a Dow component? Refresh my memory, I think they are and I don't think they reported a profit. I believe Microsoft met earnings consenus, that's working out well.
Alcoa did better than expected. Like I said I am not going to get into this. I like what I do. I don't brag about the money I make, the big house I own, all the sports cars i have. I live a very blessed life but I am done here.

You asked if health care had to do with the DOW hitting 9000? 100%

This had nothing to do with the banks earnings, shorts covering, Meredith Whitney upgrade of GS.

I would rather live my life as if there is a God, and die to find out there isn't, than live my life as if there isn't, and die to find out there is.
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post #14 of 17 (permalink) Old 07-24-2009, 09:04 AM
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Alcoa did better than expected. Like I said I am not going to get into this. I like what I do. I don't brag about the money I make, the big house I own, all the sports cars i have. I live a very blessed life but I am done here.

You asked if health care had to do with the DOW hitting 9000? 100%

This had nothing to do with the banks earnings, shorts covering, Meredith Whitney upgrade of GS.
Alcoa beat estimates, they didn't report a profit. You posted that all 30 Dow components reported profits and then you performed an island reversal.

I didn't say shit about health care and the markets. I posted my thoughts in post #10 and didn't mention it one time. Profits have jack shit to do with movements up or down. As you now are admitting, beating estimates has some effect...but even that doesn't mean shit with a revenue miss or discouraging guidance.
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post #15 of 17 (permalink) Old 07-24-2009, 09:17 AM
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post #16 of 17 (permalink) Old 07-24-2009, 08:59 PM
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3/06/09 when the dow was trading between 6450 and 6600 and vertnut claimed the world was going to end and everyone called me crazy.


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The Dow will rally to 7850 this year .



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post #17 of 17 (permalink) Old 07-24-2009, 09:41 PM
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3/06/09 when the dow was trading between 6450 and 6600 and vertnut claimed the world was going to end and everyone called me crazy.






You're right, but somehow your post is still on the weak side.

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