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A new Stock Market Crash, a pattern?
From thetrader.se
The Nature of Crashes. They tend to come and go, irrespective of Twisted Operations. As Churchill once said;
”This is not the end, it is not even the beginning of the end; maybe it is the end of the beginning.” interesting paper below.
Every production phase or civilization or other human invention goes through a so called transformation process. Transitions are social transformation processes that cover at least one generation. In this article I will use one such transition to demonstrate the position of our present civilization and its possible effect on stock exchange rates.
When we consider the characteristics of the phases of a social transformation we may find ourselves at the end of what might be called the third industrial revolution. Transitions are social transformation processes that cover at least one generation (= 25 years). A transition has the following characteristics:
- it involves a structural change of civilization or a complex subsystem of our civilization
- it shows technological, economical, ecological, socio cultural and institutional changes at different levels that influence and enhance each other
- it is the result of slow changes (changes in supplies) and fast dynamics (flows)
Examples of historical transitions are the demographical transition and the transition from coal to natural gas which caused transition in the use of energy. A transition process is not fixed from the start because during the transition processes will adapt to the new situation. A transition is not dogmatic.
Five transition phases
In general transitions can be seen to go through the S curve and we can distinguish four phases (see fig. 1):
- 1. a pre development phase of a dynamic balance in which the present status does not visibly change
- 2. a take off phase in which the process of change starts because of changes in the system
- 3. an acceleration phase in which visible structural changes take place through an accumulation of socio cultural, economical, ecological and institutional changes influencing each other; in this phase we see collective learning processes, diffusion and processes of embedding
- 4. a stabilization phase in which the speed of sociological change slows down and a new dynamic balance is achieved through learning
A product life cycle also goes through an S curve. In that case there is a fifth phase:
- 5. the degeneration phase in which cost rises because of over capacity and the producer will finally withdraw from the market.
Full paper by Mr Grommen A new stockmarket crash, a pattern.
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And they havent even defaulted ........................... yet
Mr.Grommen's whole article might contain some snippets of wisdom, but from what I've read so far, I doubt it and I'm not going to bother if the basis of his essay is on a product lifecycle S-curve.
We're in the province of exposure, transition, & absorption of ideas and products. A generational change might be best described in terms of the product lifecycle of technological innovations, which is described roughly as an inverted L. The point at which maximum take up rate is achieved, the area of saturation, there is no slow decline, but a sharp drop and the product is discontinued - which might be interpreted as the point at which revolution has occurred. A successful product goes through many lifecycles, often in concurrent development with its previous version. Hence, software and computer hardware have version numbers denoting each iteration.
If we apply such a lifecycle to generational changes in human behaviour, we can see that old ideas (Say, revolution v1.0) do not simply taper off slowly, but are cut abruptly and violently off, replaced by revolution v2.0, which had all this time been developing quitely in the background.
Finally, we are not living through a third industrial revolution, we are living through the inception stage of the information revolution. The age of the progression of: data - information - knowledge - (leading hopefully to) Wisdom, in every aspect of our lives thanks to the invention of the WWW by a fellow Brit, Tim Berners-Lee. Whenever civilizations absorbed and shared their experiences together in the past, humanity advanced through a golden age of enlightenment, and I would hazard a guess that's where we are all heading eventually after the old ideas, old hatreds, and old ways of doing things are killed off. And the crazy, infantile, roulette wheel of the markets propped up by debt and magic money is one of the best candidates to be killed off.
Just thinking aloud.
I think a bounce is near....but that is just the water hitting your ass before the flush,
Seems like whenever we have a < -3% downday the bears come out in full force only to disappear back in the woodwork the next day as the bulls rally the market up for another 2-3 days. This is when we get the all too common rants about high-frequency trading LOL. I want to see bearishness everyday!
U.S. equity markets are lower in nominal terms than they were 13 years ago, and lower in real, inflation-adjusted returns than they were 28 years ago, and this doesn't even account for the trillions of investor losses that the index exchanges 'conveniently' stop tracking, such as in the case when a ticker symbol like General Motors is delisted and goes to the pink sheets or $0 (which happens far more frequently, and wipes out far more investor capital, than Jeremy Siegel would ever care to talk about).
Keep telling yourself that equity markets are anything other than one of the largest scams ever devised in the history of mankind, and that they're rigged in such a way so that financial institutions profit no matter what markets do, and the bulk of churn and burn capital that evaporates reconstitutes itself into the pockets of very small number of pockets of those running the game, while the masses lose their asses.
You ever play craps? try playing the other side occasionally, you'll get a new perspective.
I know its early but I'd like to buy Truth in Sunshine and TBTF a coulple of beers.
....sorry, one for honnestan too. Could not have said it better. Accepting your position on stocks and shareholders....then to play the game, I mean 'invest', is to base your decisions on the price of the stock, since that little price moving around is the thing that moves the balance in your account around, right?? Do I need 150+ IQ to do that?
If that were truly so then nobody would invest in the market. In truth, stocks represent ownership in a company. There is value in that. Companies produce things. Companies make money.
Yes, not all companies always earn money.
Yes, some might be better positioned in the market to make more money than others.
But that does not mean ownership of business is always a losing proposition.
I do smell "loser" in your post, however.
"If that were truly so then nobody would invest in the market."
On its own - that statement has merit. That would be for a market totally inhabited by willing investors. In the late 70's and early 80's a scheme was hatched to "entice" more participation in the equity markets. The bastard child of that liaison is now known as "The 401K Plan". Once companies found a way to force their employees into stock ownership (matching contributions with company shares) they discovered and easy way to wean future employees off of defined benefit plans. This new" benefit has artificially swollen the number of "investors" - and thus the appearance of interest in the market (based on volume) is skewed. How many of your co-workers actively manage their 401K plans? Most of the ones I know were funneled into those ghastly target date retirement accounts.
"In truth, stocks represent ownership in a company."
Also true in theory - but how many people purchase stocks based on their desire to "actually have a piece of that company"? Most purchases of stock are based on the ability of that transaction to yield a profit to the buyer - either through a rise in stock "value" (cost actually) or through the payment of dividends. Most of the players that own stock have no desire to be seen as a part owner of that enterprise, same as anyone who buys coal/grain/cattle futures really intends to own a pile of the commodity (or paper gold/silver too).
The actual interest in the market is far less than you may imagine. Those of us that have any skin in the game are unwilling participants thrown in there by our government. It seems that now the Chairman of the Federal Reserve is discovering this too as the SOMA/POMO purchase of stocks, and the resulting "Wealth Effect" failed to lift our country out of a recession by the bootstraps.
Apparently you have NO IDEA what "company ownership" involves. The fact is, virtually ALL the important aspects of "owning a company" do not exist for stockholders. The fact is, especially in the world of today, the stockholders are slaves to the executives, who run the company entirely for their own short-term benefit by entering into bogus accounting and whatever short-term perversions trigger their bonus plans.
Go start and own your own company someday. You'll find out the reality of that bears almost zero similarity to being a shareholder.
Today, the stock market and ALL paper markets are just about 100% scam.
+1000
Beautifully said.
How the fuck was illumina up today? Those souless Goldman sachs losers
@IQ 145 - I'm confused as to why exactly you feel you have the right to talk down to anyone on this site. An IQ of 145 is hardly a reason to be a prick, nor does it make you any less of a socially retarded internet bully. To make matters worse, you haven't said anything remotely intelligent over the course of your tirades.
I'm equally as confused as to why it is you haven't been called out for being a total fraud. Check out your most recent posts. In the thread "Why Everyone Hates Equities and Loves Bonds" you wrote:
"At the present moment the American Banking system is absolutely awash in demand and short term money; everyone and their brother has "gone to cash"; this is one reason why it's so easy for the S&P and the DOW to rally, right now."
In "Graham Summers' Weekly market Forecast" you wrote:
"This guy, this poster is absoluely hilarious, he posts a picture of an uptrend; bottoms and tops delineated, and then says its a "bearish flag". He's a complete idiot. The S&P500 will close higher on Friday than it did last Friday. Remember, you heard it here."
You then followed up that brilliance in "Market Anxiety Palpable" by writing this:
"Normal Volume. (Can't bitch about the ghost volume anymore); get over it; it's called a rally. You'll survive being wrong again; no one will remember. Market's rallying; S&P higher on Friday than last Friday; remember you heard it first here. Before you start screaming; I already bet money this way."
Finally, in "Market Snapshot" you wrote:
"Long from 1190 on the S&P; not mythical; I think the Market has changed sentiment."
And now I have the displeasure of seeing you state your "bottom buying" prices in typical hindsight genius fashion, completely ignorant to the massive skid mark you left in your already soiled underpants that you call a posting history. Your views on the direction of the market have been unbelievably poor, exceeded in inferiority only by your overall demeanor and value added to this site. It's quite clear that the retrospect positions you've posted here are non-existent, or in the very least underwater. You're in no position to make judgements on others, and if you do, at the very least, remember what you have said, so as to keep your ever-changing story straight (I say this for future reference after you claim tomorrow that you shorted silver at 42 today). Basically the next time you need to lie, just do what someone with an IQ of 90 is capable of doing: think.
IQ 145 sounds like he took his IQ test by following a link on A Facebook ad in Farmville. All he had to do was submit his mobile number and, voila, IQ score after answering 10 questions.
+1111
Excellent call-out of a total and utterly complete fraud.
This tool of the established kiss-asses is in dire need of a come-down and you have contributed your part.
The moron probably belongs to MENSA which is filled with endless arseholes.
tbtf:
You'd be making a massive assumption that there are 'underpants' or any other, well, accoutrements.
- Ned
145 - You and I are not so far out on the edge of the curve to not have a lot of people smarter than either of us. Sad to say there are a significant number both smarter and without any morals. You can be scammed just like a dull person. The older I get the more I value kindness over brilliance. When the trucks stop bringing food and the power goes out people will remember your acts of kindness and discount intelligence if it was only self-serving.
145 is only 3 st dev off the mean assuming normal distribution, but IQ is highly skewed at the tails. He's not 1:1000 like he may believe maybe 1:200 or so. Rather plain vanilla. I've met several people with IQs of 180-200. Comparing one of them with his highness is like comparing a normal B student with a "can-he-tie-his-shoes" Down's syndrome kid. He's not the brightest crayon in the ZH box, just the most pompous.
DeadFred, my IQ from college days was approx. 140, at the 99.6 percentile. I graduated summa cum laude, MBA, and had the second highest final score in intermediate accounting in the entire faculty of admin. studies. Yet,having worked with 150+ types, I can assure you that they are so much smarter than I am, that I feel like a grade school student at a university gathering. For example, I have a good friend who completed 2 MA's in math and physics by the age of 14. Do you think I really have a fucking clue what he is talking about when I ask him to explain certain maths related to option pricing models?
I may be smart in a conventional sense, but I have learned through bitter experience that I am rather stupid compared to many of the people I meet in the top echelons of business and academia.
Does he trade?
I went to a MENSA social gathering once. You are correct; viz., even very bright individuals (such as those with IQs in the 145 range) have nothing - absolutely nothing - in common with those +160-180. I felt like I was back in high school or something, and every other member of my class was a girl that looked like Ann Margaret and wanted to meet a guy who was in college.
if the banks are going to get QE-? they need the markets to drop 25%(ish).
there is nothing else that needs to be said or explained.
the World GDP is not Growing..
Bonuses are pegged to QE Monies.
Probably close green today....
missed your call
by a few pts ..
Right.
Today DOW: -4.10%
Tomorrow DOW: -5.10%
Over the weekend: to the beach! (+10%) = account balance on Monday +0.80%
Holy crap Is that Jack Nicholson in the Lower left .......he must be a vampire
Listened to financial sense yesterday where pulava interviewed an institutional advisor about HFT. I'll never send another dollar to Wall Street again, outside of some PM stocks. At least there I know I'm aggressively gambling. Our country is ruined. Apparently no one with authority wants to stop the fraud. It will only get worse. Lower volume along with lower valuations.
When the going gets tough; the tough go shopping. Bought the bottom of the S&P today at 1128 basis Dec. bought F; bought BAC; it's just temporary hysteria. Soon all will mysterious time for rally again; hint; the players can't make any money on a market that doesn't move. These are serious support levels; it's another point of view from Zero Hedge; for instance; BAC; Insolvent !! oh, noes !; so what, it's been insolvent for twenty years. The market is perfectly capable of rallying while it remains insolvent; see there's a different way of looking at things.
"bought BAC; it's just temporary hysteria"
Does Warren make you change his feces filled bath water? BAC - temp hysteria - LOL! PRiceless.
is cramer your dad??
Well he seems like an asshole who lacks any self-doubt and thinks simplistic observations are brilliant, so it seems possible.
"Boo-Ya" little IQ? "Boo-Ya"?
My 15-year-old daughter has a (tested) IQ of 165 and has more practical common sense than this asshole ever did since the day he was born.
( Bought the bottom of the S&P today at 1128 )
The bottom today 1114...no?
Sold out at 1116 on the S&P500. Wrong again. I'll wait till tomorrow to see if the Silver is going to rally. Too much contrariness! Yugg.
In general, it is bad form to discuss your trades. There are exceptions, but you seem a bit dull.
Talking your book is normal and expected, its when they start asking for tips you know you have a green one to wallop.
If he's honest. Why not. I pity him for being long. I've been short for three days and covered today.
Why? Because Robert Prechter says wave five is under 1101 and every time we get close it blows up on his poorer people.
But the concept of sharing your honest efforts is not bad. It really depends who is commenting.
We can all learn and help if we are honest.
Zero Hedge is the best. Because Tyler and Crew work hard to bring you the facts including what they believe.
While I don't agree with IQ 145's trading thesis/naive bullishness I do agree with you! Well said.
I have only been trading for one year and I call myself a novice. While I have realized net returns of 21% in my first year, and hold a large position in PMs as well, I sometimes look for trade ideas and advice from others.
Anyway, what I am trying to say is I dislike it when ZHers try to limit or restrict the nature and domain of our discourse. I find IQ 145's epically poor trades informative (in the I trade opposite him).
I am going to give you a little trading advice,making money trading is all about money management and the ability to run away and fight another day.Anyone can think that he is G**s gift to trading but the real test comes when you have drawdowns,and you will.Drawdowns will also test your psycholigical ability to stand losses.Having been through numerous crashes,i can assure you that none of them were fun and that some of the traders who have done the best in the up cycle crashed and burned in the down cycle. So far this current down move has been a gentle one .When your positions are imploding everywhere,when there is no place to turn except for going %100 to cash and you feel like jumping out of the window,then you willknow if you are cut out to be a trader.
+1! I would say that was today! (Though I hung tough). Thanks.
Robert Prechter is one of the miserable leeches on the financial community and has earned nothing but discredit to his name.
Nonetheless, there are many blind lemmings that follow him, and the cliff is just ahead.
Looks like you timed the bottom by a point. Nice work.
Big bounce coming. For a blog that (it's readers) value for independent thought, comments to posts like this are rather conformist...
Good luck!
I think the market's going to bounce like a super ball..up/down/up/down...each bounce smaller and smaller until the ball slowly rolls off the porch and drops straight into a dog turd.
More like Wiley Coyote ready to catch an anvil... good luck with that!!
You sir, are more than welcome to try and catch a falling knife, I prefer to wait till it hits the ground, then pick it up. Good luck to you.
There hasn't been any capitulation yet.
I have never seen someone with such a high IQ be so consistantly wrong?
Oops...forgot about Bernanke