Now We Know What Won't Happen

[tsptalk]

I put this thread in the Psychology forum because I look at it as a contrarian indicator.

Delaying Tax Vote Could Crash Stock Market

"Failure by Congress to extend the Bush tax cuts, especially locking in the 15 percent capital gains tax rate, will spark a stock market sell off starting December 15 as investors move to lock in gains at a lower rate than the 20 percent it would jump to next year, warn analysts.

"While it is unclear how bad the sell off could be, it could wipe out the year's gains, they warn."

I don't know how this will play out, but one thing I do know... The market will not crash on Dec 15. Simply because of this article.

It could crash before the 15th, after the 15th, or not crash at all, but it won't happen they way they say. Count on it.

 

[coolhand]

It certainly does suggest we're headed higher. Drudge has that plastered across its web page in big, bold letters too.

I see our sentiment survey gave a repeat a buy, but the reading is on the high side. This morning I also saw where Trader's Talk daily sentiment has lots of bull and longs, but few shorts.

IBD has yet to confirm this rally as a new uptrend.

Many systems are close to flipping again.

I put this thread in the Psychology forum because I look at it as a contrarian indicator.

Delaying Tax Vote Could Crash Stock Market


I don't know how this will play out, but one thing I do know... The market will not crash on Dec 15. Simply because of this article.

It could crash before the 15th, after the 15th, or not crash at all, but it won't happen they way they say. Count on it.

 

[Bullitt]

IBD can always retroactively call a follow through day as they so often do when the market storms higher.

Sentiment wise, nothing is exact. If you followed sentiment (even retroactively) you'd have done all your buying in Oct 2008 and had to take a 20% drawdown before it worked.

Insiders are out. They have sold everything and won't buy until 2011 when the tax code is clearer, so there is no bid from them.

Honestly guys, this whole thing is based on the Fed providing free money to the big banks who gun the markets higher. Any bad news is a reason to buy because more money will be flooded into the markets. Any good news is a reason to buy because it gives the false impression that we on on the road to the good ol' days again. Crash? No. I think we are in for a slow grind lower that could take a few years until it's all sorted out.

Let the foreclosures happen and it will clean out the excess slack, but then you're guaranteed to have a situation like this (http://tinyurl.com/2uplbbf) times 10. Keep subsidizing and printing money and drag things out for longer than they need to be while everyone holds on to hope.

It's a sad situation. Baby boomers know nothing else but rising home prices. Now that homes are no longer rising, the man is calling in all loans. No more viagara, hawaiian vacations, winter homes, and million dollar retirements. Where were the rainy day accounts when the times were good?

How do you trade it? I don't know, but here's an idea. Buy an OC192 line for $150K a month, put it in your living room, set up a HFT program on Scottrade and chill out to some Dr. Phil while the machine rips a penny off every bid. I can't believe this can go on indefinitely just as we felt oil could not go up forever two short years ago.

 

[James48843]

Note: The P&F chart for the S&P 500 flipped positive yesterday. We're in a new up cycle, according to that.

 

[Bullitt]

Point and figure says 1590 target. Not in 2010, not in 2011.

 

[EmoDx]

I put this thread in the Psychology forum because I look at it as a contrarian indicator.

Delaying Tax Vote Could Crash Stock Market


I don't know how this will play out, but one thing I do know... The market will not crash on Dec 15. Simply because of this article.

It could crash before the 15th, after the 15th, or not crash at all, but it won't happen they way they say. Count on it.

From paragraph 1 - Which analysts does he cite?

From paragraph 2 - If one were to look at a + 7% for YTD and a - 7% slide would wipe out gains; if you buy and hold. But if you have been diligent in your investing (I wish I fell into that group) you could easily be using this as an entry point.

From paragraph 3 - IF we see a big sell of to lock in capital gains tax we could see prices shoot lower. But wouldn't a many number of investors turn around and buy within the next few days at a lower price than they got out at? We would then see a slow and steady gain throughout the rest of the year as the market would have revalued at a lower price and continue to the fair market equilibrium.

These are simply my opinions of what I think may play out. Discuss?

- Emo

 

[Boghie]

I have two IFTs in my hand so I may run partially (maybe 50% 'G Fund') at the end of this week to play it safe.

If I had already burned an IFT I would not change from a bullish allocation.

This tax controversy will be a learning experience for our liberal brethren.

After spending seven years screaming that the tax code changes of 2003 only benefited the corpulent fat cat rich they will have to answer to reality. Reality will be a very noticeable change in take home pay – especially for the married. That will be a very LONG term political lesson. One not forgotten soon.

And, we will see a noticeable change in the economy. Higher taxes will not lead the consumer to spend more. The economy will contract. We will feel it.

Finally, after everyone gets whacked for one or two paychecks, there will first be Hope and then there will be Change. However, it will take the IRS more time then expected to adjust withholding schedules and it will take additional time for our corpulent fat cat plutocrat employers to adjust to those schedules. So, expect three or four crappy paychecks. Maybe more for we gubmint employees. Things move slow in the gubmint warren.

Finally, finally... Yowser if we have to deal with dinky take home pay and then get a gubmint shutdown with no pay. Yowser.

Hope we are ready for a short term mess.


But, things will rebound in late January / early February even if the CongressCritters and Administration bullox thing up. Not worth a valuable IFT to make a guess if it is your last IFT.

I put this thread in the Psychology forum because I look at it as a contrarian indicator.

Delaying Tax Vote Could Crash Stock Market


I don't know how this will play out, but one thing I do know... The market will not crash on Dec 15. Simply because of this article.

It could crash before the 15th, after the 15th, or not crash at all, but it won't happen they way they say. Count on it.

 

[tsptalk]

I put this thread in the Psychology forum because I look at it as a contrarian indicator.

Delaying Tax Vote Could Crash Stock Market

I don't know how this will play out, but one thing I do know... The market will not crash on Dec 15. Simply because of this article.

It could crash before the 15th, after the 15th, or not crash at all, but it won't happen they way they say. Count on it.

Today is the 16th.... Just say'in.