Good grief ... up another 200 points today! Anybody have any idea what's going on here? I don't know much about the market, but it sure does seem like everything is going "too" well! How long can such a balloon inflate before it explodes? Is this an indication of how successful the "spin" about Y2K has been?

-- Bruce (broeser@ccgnv.net), December 23, 1999

Answers

FWIW Overlay a graph of the Japanese stock market before their "major correction." I have not done it, but the person who had told me that there was an interesting match in the patterns.

-- rw (ridleywalker@aol.com), December 23, 1999.

The excess liquidity being pumped into the market by Greedspin and his cohorts has to go somewhere. It's going into the stock market. Major correction due in January when the spigot is turned off, even without significant Y2K disruptions.

-- Watcher (M@rket.watcher), December 23, 1999.

In a nutshell -- it's nuts. Don't feel bad; I have a friend who bailed during the irrational exhuberance phase at DOW = 6,500.

-- Dave (aaa@aaa.com), December 23, 1999.

Dave,

Thanks. I don't feel bad, though ... it's just interesting to watch. I've never had enough money that I thought I could just squirrel it away in "playing the market". I've got friends that are always talking about it, etc. but it just has never interested me (other than just out-of curiosity). If I ever invest there, it would only be to invest in the companies themselves long-term; all of this trading and craziness I'm seeing looks to me to be nothing more than legalized gambling. From what I've seen the odds of really making a big chunk of money there are equivalent to doing the same at the BlackJack table or in the lottery - both of which are stupid wastes of money.

-- Bruce (broeser@ccgnv.net), December 23, 1999.

Become a handicapper and bet on racehorses. It's more interesting and has a better chance of winning. My father and grandmother developed a system and increased their income through the depression. My dad became a Seventh Day Adventist before I was born and would never tell me the system, darn it!

-- morgan (bitbybit@eoni.com), December 23, 1999.

In a word: Clueless

The underlying value is being ignored. Things like price/earnings ratio are not being used as a basis for purchasing in all too many cases. Remember, too, that margins have been lowered to 25%... If I wanted to gamble, I'd go to Vegas or Reno...

-- Mad Monk (madmonk@hawaiian.net), December 23, 1999.

". My dad became a Seventh Day Adventist before I was born and would never tell me the system, darn it! "

Sheesh! what an asshole!

with family like that who needs enemas...

-- unlucky13 (0987@123.4456), December 23, 1999.

I believe the whole phenomenon is due to the "Milne effect". When the DJIA was at 10,250 and falling, Milne announced we had broken through a resistance level and the market would go nowhere but down. Naturally it went way up.

Before this latest runup, someone calculated that if someone had bought into the market every time Milne announced the crash was starting, they would have tripled their money. Add in this last pronouncement, and they'd have at least quadrupled their money.

If Milne ever announces that it's time to buy, I'd recommending selling everything on the spot.

-- Flint (flintc@mindspring.com), December 23, 1999.

If you want to buy, wait three weeks. The only stock analyst I know has twenty plus years trading and says it will correct itself after the new year no matter what happens. He says this run up is due to year end ... whatever ... I don't remember exactly what he said, I do technology, he does stocks. I answer his questions about systems. He takes my word for it. He answers my questions about the market, I take his word for it. He believes it will correct about 20 percent when it does. I figure that will be just about the time they have your retirement Flint.

-- (...@.......), December 23, 1999.

Nasdaq market run-up is reminiscent of the gold martket action of 1979. see http://www.the-privateer.com/chart/usgmonth.html

-- (fake@out.com), December 23, 1999.

It's the fairly common year-end run-up (sometimes called the "Santa Claus Rally") and occurs pretty regularly just before Christmas and running through New Year's and a bit beyond. Everyone's done their tax loss selling for the year and many brokers and managers need to gussy up their portfolios so they can show "winners", so there are more buyers than sellers. Combine that with lighter volume (fewer total players) as market participants start going on holiday and you have the makings of a nice little rally.

That said, this market is absolutely nuts. Valuations that make the Nikkei bubble back in the early 90's look like a bear market. As I've said elsewhere: if we don't get seriously whacked by Y2K, it's a very good bet that Mr. Greenspan will grab Wall Street by the throat in 1Q2000 (starting with the first Fed meeting in mid-February) and squeeeeeeze until it gets its act together.

-- Mac (sneak@lurk.hid), December 23, 1999.

I rememberRuss Kelly's "Ask the Experts". One repondent gave analogies for the Y2K rankinngs, 1 - 10. He gave the Great Depression a "6". The average ranking of his experts is "7". My friends expect the market to drop 40% to 60% next year.

There are companies whose stock has taken 40+ years to recover from the Depression. Those who don't know history are doomed to repeat it.

-- John Littmann (JTL9700@JUNO.COM), December 24, 1999.

I heard that the recent run on the market was a direct result of foreign investment being made in our market, due to Y2K fears abroad. It kind of makes sence though. If I were worried about (Germany, Japan, etc.) my countries remediation efforts producing little or no fruits come 1-1-1900, I might place my investments in the (USA) country most likely to succeed in their efforts for 1-1-2000.

That is IF I were still interested in retaining my investments in the market!!!

-- nuts4dow (123@4567.890), December 24, 1999.

January 1st 2000 will be the anniversary of the Japanese crash of 1/1/90. It topped at over 40000 and is now at 18500.

Things can go wrong on January 1st after all ...

Shuggy.

-- Shuggy (shimei123@yahoo.co.uk), December 24, 1999.