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Bear market, Dead cat bounce

 

Dead cat bounce is a bounce off oversold conditions similar to the old addage even a dead cat bounces off the ground before it returns to the ground from a large fall.  Jim Cramer cited this evening that determining the bottom in a bear market is near impossible and the bottom in the market is far from over.  Specifically caused by the redemption of mutual fund holders, and hedge funds getting crushed as commodity prices have crashed in a short period of time causing further redemption of assets in the markets to settle debts. Dead cat bounce is an unsustainable rally that fads.  Who is buying here?   Warren Buffet said the dollar may be worthless in five years yesterday

02/27/2008.  http://www.marketwatch.com/news/story/warren-buffett-says-us-dollar/story.aspx?guid=%7B50CE458A-3BB1-4934-83B1-FB368B0FCD66%7D   Tech giant Cisco with drew guidance for the year.  Then made comments abouts its ability to change with the times. What? I thought they were a telecom fiber expansion play.   Google never has given guidance.  Google markets crap on the internet and people are catching on.  I could see foreign nations not allowing the sale of crap to their people.  Google has taken initiative to improve the quality of products offered.  Oil giant Shell issued some disturbing news that is could not deliver oil promised to the market becuase of security reasons and what it called sabotage of it’s pipelines in Africa.  http://www.marketwatch.com/news/story/shell-declares-force-majeure-nigeria/story.aspx?guid=%7B4AC5EFC0-BDD8-4285-869D-5EABB71CB43F%7D  I think the educated trader just sells the market higher every time it goes up.  The investor takes his profits.  I don’t know who would be a buyer in this market.  

Jim Cramer said the bottom is in.  Of course Jim like any nimble trader or the market me can change his opinion at quickly.  He likes Brazilian stocks.  like AMX and PBR  (update 2/7/08) 

So,  lets take a look at his argument.    Companies are trimming expenses and valued at a lower multiple than a few months ago.   Going forward this makes stock investment more attractive.   Corporations believe the 2nd half of 2008 and 2009 will be good for earnings.   The stock market being a forward looking indicator may dictate the bottom is in.  The vix hit 29 recently.  Meaning stocks volaltility is peaking and may have change directions.    Investors are flush with cash and certainly not going down with out a fight.   Just have to see what plays out.   AAPL  and other stocks may be a bargain here.

entertainment purposes only

February 7, 2008 - Posted by | Stock investing links, ideas, and opinions. | , , , , , , , , , , , , , , ,

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