Community Year Vote S&P 900 this year?

900??
The way things are going I would say 1900 looks more like it :)

wow that is full on positive!...anybody else??...guliamo of course has a good record on these things....

I just can't help feeling that the economy hasn't really turned around yet...I still think a double dip recession is possible....we'll see soon enough this month...earnings will tell the tale...

All I know is that we had one mean bounce back which means to me that people were waiting for a meltdown and when one came the media went berserk with the dooms day scenarios.
Some good government intervention, a smart president taking smart advice from smart people and a United States of America proving once again it's incredible might.
Everyone is on about China becoming the new empire etc.. but I don't buy it - we'll see if China keeps growing like this AND pay minimum wages.. they are merely the new cheap labor market.
I think the US has proven that it's system works best and that a real democracy put together with unparalleled infrastructure, educated people and a wealth of natural resources can overcome obsticals better than the rest.
No magic mantra or secret sauce here, just plain old hard earned quality. God bless it :)

I think you're describing an historical fact circa 1945-1965....with a mini-resurgence in 1982-1989...not what, alas, might await in 2020....


You know what they say a picture is...

http://en.wikipedia.org/wiki/Shanghai

Peace,

lb

Hehe.. no doubt there's growth in China. Show me 25 Shanghai's sustained by a vibrant middle class community and the title "Empire" will be befitting :)

Ok G-Man,

I'll show you:

here's what some folks are saying--note 40 years is a very, very short time:


Present estimates of “middle class” in China range from 100 million to 247 million, depending on how much income renders one “middle class.” Assuming that an income of about$9000 is necessary to be considered middle class, China could have over 600 million middle class citizens by 2015. The China State Information Center, by contrast, considers those earning 50,000 yuan ($6,227) per year to be middle class – and expects 25% of the populace to qualify by 2010. Of course, the level of affluence commanded by each tier depends on where the household is situated. For example, to be considered middle class in Shanghai, China's most expensive city, a family would need to have a higher income than if it were living inland in Chengdu or Chongqing. Roughly 13.5 percent of the China’s population now belongs to the middle class.

While China will still possess a lower average per capita income than the United States, it should be noted that disposable income stretches farther in China, on average, than it does in the United States or Europe. A significant portion of household budgets are expended on services, ranging from hair salons to meal at restaurants to travel. Services are usually labor-intensive tasks whose cost is attuned, in part, to the prevailing wage. In China, due to the vast supply of labor, wages are significantly lower than in the West. Thus, the cost of providing many services is lower and, as a result, prices for many services are lower. A visit to the manicurist might cost $1-2 in China, when a similar visit in the United States might cost $10 or more. Thus, smaller incomes in China can provide a standard of living equivalent to those with a far larger income in the West.

Estimates of the size and growth rate of China’s middle class vary. Roughly half of China's projected urban population will be middle class in 2025. Unlike the United States, where income typically peaks between the ages of 45 to 54, it is predicted that the wealthiest consumers in China will be between 25 to 44 years old because the younger generation will be more highly educated.

The meteoric rise in China’s middle class is tied to dramatic increases in its per capita income, which is growing at a nearly unprecedented rate. The first industrial revolution created a 250% increase in per capita income over a 100 year period. The second industrial revolution triggered 350% per capita income growth over 60 years. By comparison, China is on track to create a 700% growth in per capita income in just 20 years.

Chinese households currently save 25% of their post-tax income, according to the China Statistical Yearbook. A survey by McKinsey indicated that this high savings rate was driven, in part, by Chinese citizens’ belief that they need to set aside funds for retirement and healthcare expenses. If these expenses do not rise as rapidly as income levels, then Chinese consumers may have a surplus of funds that they are willing to spend. And, if health care costs do rise, the Chinese healthcare sector may be an attractive investment.

The World Bank defines “higher middle income” economies as those where per capita annual income exceeds $3000 to $4000. Once annual incomes cross this $3000 threshold, there tends to be an accelerated growth in that country’s middle class. This would result in a middle class six times higher than today, representing 28% of total Chinese population. It will not be until 2050 that China is predicted to reach a per capita net income of $30,000, the level of most Western countries today.

pretty slow today in the markets...change is coming....

Wow. Captain Optimism. As much as I would love to believe that the U.S. will have glorious days ahead, I simply do not see it. I think time will show.... over the next decade or less, that our problems are much deeper than many people think and getting worse fast. Government stimulus is propping up the markets and may continue to do so for some time. I do see S&P at 900 this year though, with a double dip coming sometime in the next 1-3 years, depending on how long our government can keep spending to postpone the problems.

I think there's a good shot at 950 this year and well below 900 in 2011. Lots of technical support at 950. I think if you do see 900 this year, it's just as likely to see the S&P under 800, too.

950 is possible there are a lot of technical support there, it won't be that easy to break 950 in 1st try. I would say 950 support and another small rally and failed to put new high will give market a nice target around 850-800 area

It is entirely possible that this will hit 1900 but on an inflation adjusted basis it wouldn't be "worth" any more than it is now. Key to this are interest rates and the dollar. I think we're seeing a brief bounce in the dollar up to about 84 on the Dollar Index. Then if we have this second stimulus, etc that will be the end, and in agreement with Pattrnprofits and Ghantal - 900 or lower, easily. Stagflation and a dollar crisis remains the theme this year, commodities, oil/gas, short the long bond and the precious metals. (and I'm leaning toward the year of canned food and ammo, a bunker in buttscratch, Maine and a couple of shotguns, :-)

900 or 1900 (pace Guliamo)...the time is now here....the bull/bear thesis will be decided in a couple of weeks...the last couple of days....have been mere 'fluff' (painful fluff if you were short...beany I feel your pain!) and "da boyz stick saving" (dave's etf journal)

lb

;--))

Misery loves company lobots - come on in! :-)

1000 is my target. I think the plunge protection team wont let it fall under 1000 again.

Vic,

That there is a "plunge protection team" (executive branch/fed) is clear...what is not so clear is how they would do on Strong selling volume or unexpected crisis (Iran/Chinese policy etc..)..they are playing the "high-wire" (playing it well..but the high wire is the high wire)...

What's your take on the potential relative performance of Emerging Markets vs the US this year who will outperform who..

Personally, I think 2020 will reveal oversupply and deflation issues in the emerging markets (china/japan/russia)..which could lead everyone down again...hard (harder than below 900)

what's your take on this? (and anyone else)

lb

correction 2010 not 2020...;-))

if we only see 900 , we should celeberate. if we see 666 then we should breath a sigh of relief.I think everyone should accumulate canned food and lead on pullbacks :-)

Yes, today was indeed harrowing and I should have followed my own advice ;--)) but here's the rub...it's Friday and the jobs report is expected to be "so so"...now we bounced off 10,000...how many bounces? just one and straight through?...to be honest I have no idea about tomorrow...since I can come up with arguments for both sides..although I'm leaning 51% down/49% short term bounce up (I think Europe will surprise tomorrow with "good" news)

But yes, we should ask Guliamo! what he thinks since he's a Bull, if there ever was one..

lb

We retest the bottom THIS YEAR, and there is a good chance we break a bit lower.....possibly even into the 500's.

Look back on the weekly charts to sept 08 - we just covered that gap and the following week was a gigantic down month on huge volume. we might see a pop tomorrow for short covering, perhaps, if the volume is light I'd consider reentering short.

I'd hate to be waking up in China and looking at this drop

If the employment report is flat or g*d forbid, worse than expected, this could be October 87 all over again (for those of you who weren't born then, how's down 20% in a week grab you?) aaaiieeeee.....

Lobots you are looking good. Sorry I didnt see your post regarding oversupply and deflation to me until now.

I agree... I think some of the market conditions regarding building commodity inventories in Asia are true of speculation and not true market demand due to a stronger economy. Therefore weaker commodity prices at least short term for the first half of this year. I think we see gold drop below 1000 to take out some weak hands and then goes back to 1200 later in the year.

I'm old enough and yes...if bad then look out below!..major downdraft..and more of the same next week...so 8:30 AM is the "new" midnight

Dirty,

You're the well known (here at least) "perma-bear" as counterpoint to Guliamo:

What makes you think: this is it..the Growlers and Maulers are finally here en mass?

Is it Bear Time and for how long? Yes, the charts look bad, real bad..but..Obama, CBs, others?

Won't the "mad manipulators" stick save the day?

Well I guess I'm not as bearish as DirtyHarry then.... ;P

I have been calling for a double dip for a while, but I didn't expect it would come quite this early. Now I am reconsidering that position.

I will make my call of S&P 750 though.

I posted this back in mid Jan.......

-On the Bear Side. I like to see how big money is moving....

In my years i've notice that that major moves happen during key moments in time where everyone is away for the holiday or is about to go away. The last 2 trading hours of last year we had Major selling with high Volume Spikes. That my Friend is Very Key to how I think this year will unfold.

I hope someone paid me some mind-

ANYWHO -

Violent moves will continue; Now as for the S&P 1029ish is the next support testing the 200day MA. It Should be fun.

Cheers

I am sure we will hit 900. Thats almost certain in my mind. The question is how low will the market tank. I still think its possible (maybe not likely) that we see a new low in the Bear Market that started after the financial crisis. Say maybe 500.

Before people laugh, I think the trigger for this happening may be unravelling right in front of us with the Soverign Debt issues. If soverign debt issues turn into a crisis or are percieved to be crisis, it is likely the US Dollar will rally sharply. At least shor-term.....
The US Economy and especially the stock market can't handle a strong dollar right now.

Of course I also wouldn't rule out the market making new highs either. Even in 2010 or 2011.The Government will continue stimulus and reckless spending policies. The FED will continue QE with no limits (especially under Bernanke). A weak dollar will raise the value of everything including stocks.

It will be interesting to see how everything unfolds....

That's right: any good new on sovereign debt will shot the market higher...so that's what we all have to focus on: the situation with the PIGS (Portugal, Ireland, Greece, Spain)...any info/insight from Guruland will be appreciated by all and sundry!

good luck,

lb

Lobots -

The issues we face are numerous. First of all, the lying among nations and companies alike is beyond what the media reports, and even more than what most skeptics assume. The debt problems that currently exist are atrocious. Even thinking that somehow governments will somehow reign in spending and raise enough to reduce their deficit spending is naive to the Nth degree. These governments consistently PROVE they are not capable of getting things back on track. The more they do, the more they mess things up.

The doom and gloom estimation I put forth assumes that governments will continue to do what they do best: waste money, spend recklessly, and develop programs with good intentions that only destroy more wealth and devalue currencies.

I'm actually surprised that my opinion would be seen as something radical. We have DECADES if not CENTURIES of history behind the ongoing mismanagement of wealth by central governments. I'm hardly being innovative by coming up with this prediction.

The problem with assuming the PPT / manipulators will save the day is that their power is not infinite. I have used this example before: It's like an athlete on steroids and drugs. You can pump pump pump..... and see results.... and then there are complications.... and you can pump more..... and finally, at some point: HE DIES. His system BREAKS. Our system will break when our deficit spending and debts are so high we can no longer service them, and other countries refuse to buy our debt. When that happens, rates will skyrocket which will cause a cascading of defaults across the board. Equities will sell off to raise capital to cover debt service which will lead to a market collapse.

I'd like to note: This can all be prevented in theory, if the governments actually controlled spending immediately and managed resources better. Is this what's happening? Of course not. The only thing, in my opinion, that will stop a complete collapse of prices in equities, is the possible huge inflation we're facing from all of this money creation. Therefore I admit I may be off on this, but I believe that if I am off, it's because of inflation and that in REAL dollars we have still lost wealth. This means that even if stocks don't fully collapse to the levels I suggested, we all may still feel a bit poorer as prices race ahead of incomes...... (and remember, a lot more people are going to be on fixed incomes soon as well.....)

Dirty,

I used to be a "Reaganaut" in my youth, so I sympathize from the outset with your point of view (and more importantly I still greatly admire and respect J.S.Mill who really is one of the great, neglected philosophers in US colleges...a damaging shame and a sign of the times)

Well,

You hit it on the nail...govt's create bureaucracies which drain wealth and mismanage peoples lives..(which is about the same thing)...however, they exist and do indeed have great power (not infinite) but great...particularly in the form of the fed (and it is because the people have consistently voted for such a system over time 1933-2010)

So, the question (all things being equal which they never are) is: can the Fed suck up liquidity in record time (I think yes) and More importantly..is what I consider the key...(liquidity, inflation, all these are the technicals)...the key is: Is either China or the US ready to start challenging each other at first covertly (economically) and then...overtly?

In some ways this is what is REALLY going on with the "markets"...not so subtle power plays between (as you rightly point out) two very large governments vying for world domination...Peking vs Washington...with US business working both sides (as any good capitalist would)...however...sometimes rational means can lead to irrational ends...

If I'm right, then you're right too...it doesn't matter...inflation, reflation, deflation,...Geopolitics (rise and decline of powers) trumps economics and will usher in a period of prolonged instability...and not just in the markets....

My take is: the US will be pushed (bullied) into "sharing the world" with China, but steadily on increasingly unfriendly terms which will either lead to conflict or the collapse of one of them, probably both--who will win? history will surprise us, as always

"can the Fed suck up liquidity in record time (I think yes)"

How do you think they will accomplish this? What will the side effects, if any, be?

Furthermore - if they really do suck up the liquidity "successfully" (that word is open to interpretation), what effect will this reduction of liquidity have on equity prices?

On a side note - China is going to have its own set of problems that holds it back. Regardless of what anyone promotes, they are still communists at heart, and the Chinese culture lacks the innovation and American spirit to create / find solutions. They are industrious, and obedient, but not individualistic. It's our culture and individualism that has caused America to become a world dominator in just over 200 years - after defeating the world's most powerful empire, no less.

Yes, I know there are exceptions - as one would expect in a country with over one billion people. However, as a whole, their culture and communist system will retard their development as a world power. I'm sure they'll find a way to cheaply produce 100 trillion widgets when the world needs them, but I don't think they'll ever put their own man on the moon - at least not in the next 50 years.

They are impressive due to their sheer numbers, but I predict it will take over 100 years for the individual's productivity level to reach that of the American worker. I didn't say "never"....just that it won't happen in our lifetimes......

Sure, they can issue notes. Lots and lots of notes. which means lower bond prices and higher rates.

Let the games begin: 8:43!

Looks like shorts are going to take a beating (at least for the first 30 minutes)...watch that credit report at 3..that will be the days thrust into next week...everyone kinda knows here that if we close down today..then we really have a shot at 950 next week (maybe even worse)

enjoy the wild ride today!

lb

Dirtyharry wrote:"This means that even if stocks don't fully collapse to the levels I suggested, we all may still feel a bit poorer as prices race ahead of incomes...... (and remember, a lot more people are going to be on fixed incomes soon as well.....)"

A very good point you have brought up, which I have been thinking about, and which scares me greatly. It is deflationary, but really is a form of Stealth inflation, which by the way is what we have been seeing....prices go up slightly, but if you are on a fixed income and have not locked in long term higher rates, as your CD's or savings rate accounts rates reset, your income drops drastically. So all goods and services are more expensive to you as your income is less.

Punish the savers. Reward the banks risky behaviors.

Dirty,

On China vs. Us..:

Here's how empires fall:

http://www.ft.co​m/cms/s/0/f748d4c​6-128b-11df-a611-​00144feab49a.html

One long step backwards at a time...

more to follow,

peace

Interest Rate Red Alert plus Iran Meltdown this week:

http://onlin​e.wsj.com/art​icle/SB100014​24052748703427​7045750514428​84515742.html​?mod=WSJ_hp_u​s_mostpop_read


the necessary has begun....

lb

plan appropriately...