Hi Swanny,
All that seems is not always the truth.
I must say although I was suprised to see the rally, I wasn't shocked.
Over the last couple of days the US government pumped another 300b in the markets to help the banks out.
What does that mean?
Well in the short term it means that the banks have more liquidity, but the underlying truth is that the first installment made a couple of weeks ago didn't do the job.
So we need to ask ourselves what will be necessary to help avoid a crisis. Pump more money into the markets? Where does the money come from?
The US government I think on Monday wanted even more money by way of a second 'stimulous' package. Where does the money come from?
We also have to take into consideration that there is an election coming up and the one big issue of the campaigns is the economy. How can the current government let the DOW collapse and the economy collapse at such a time as now, a week before the election?
We also need to understand that although the index has risen, the volume was reasonably light. What does this mean? It means one of two things. That the market as reached the bottom and there are fewer players out there, because they've all gone under, or it means that nobody is buying or selling.
If we use logic, the former can't be true, as the government is wanting to pump more money into the market to hold it up. If the market had bottomed, the government wouldn't have to do that, the 'normal' market would sort itself out, like it did in 2001.
So that leaves the second alternative where we know that Paulsen has been monitoring the markets and has been in contact with investors. I posted this fact from an article I read on Yahoo!. Does that sound like external influence?
And what will happen when that external influence is withdrawn?
We need to understand that timelines and movements are subject to change. People who give their ideas are basing their conclusions with the trend and infomation available. In a 'normal' market the American bourse would have been history a long time ago.
Best regards,
Steve
Quote:
Originally Posted by Swanny
I was wondering what was happening, all seems to be on the up again.
|