Stock Market tomorrow (Mon 14, 08)

Posted on | October 13, 2008 |

We all know that predicting stock market is a lesser-science than predicting the weather. I could be wrong, but here is my prediction for tomorrow. Top line (it’s not a bottom line if it is at the top!!), I predict that we are going to have a rally tomorrow, but a much smaller one that we have today.

Here is why:

1. I have been looking at the DOW chart today to look at the typical duration of upward runs after a big sell-offs. In the past 2 months, the average upward runs are 2 days long. However, the typical duration of sell-offs are certainly not 8 days like what we just have. I don’t know if it translates to a longer bull run too this time.

2. We’ve also seen that in this bear and pessimistic market, there were typically huge moves at 3:30 p.m. EST. Usually big nose-dives. At 3:30 p.m. EST today, we were just a tad lower from the absolute highs of the day (just a few dolars off).  The remaining time just picked up more steam, giving us 11% gain in the major indeces, the largest absolute gains in numbers ever.

3. Cramer predicted a black monday for today, and it didn’t happen. Just like President Bush’s economical speeches, Cramer predictions often result in the exact opposit direction for the market. The one thing I like from Cramer so far is this. You can see from the comment on that post that Cramer’s bearish picks outperform his bullish pick!!

Conclusion:

I think the runs is going to continue until tomorrow. I didn’t sell anything today, although I am going to watch the market very closely tomorrow.

Any thoughts?

Comments

One Response to “Stock Market tomorrow (Mon 14, 08)”

1. Andy
   October 13th, 2008 @ 2:03 pm

   Jim Cramer is a clown who’s been consistently wrong his whole life. Whenever I see him I am reminded of the South Park episode in which Eric Cartman’s mother inquires about an abortion in her “40th trimester”.

   I wouldn’t like to predict what will happen on the markets tomorrow because volatility is just ridiculous - it could go either way depending on whichever way the wind is blowing!

   The problems in the banking system are so complex (mostly off the books and not understood by anybody) that I’m sure will take much longer to unravel.. even a hint at more bad news will send the markets into another nosedive.

   The bailouts that have been announced won’t be enough cover, but I’m sure most governments will be in for a penny, in for a pound.

   The smart money is in precious metals and all the good stuff around them.

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