Poll: What will happen next?

Posted on by The INO.com Team

Last week we talked about a post-election rally and lo-and-behold, we're seeing just that. For every one stock on the NYSE that closed in the red yesterday, 5 closed in the green. In fact, all three stock indices closed at their highest levels of the year.

The question we have for you today is:

Will we see long-term all-around strength in the markets?

View Results

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Tell us what you see happening in the markets in our comments section below.

Every success,
The MarketClub Team

78 thoughts on “Poll: What will happen next?”

  1. (I was agreeing with Todd, BTW. The 'reply to this comment' option on this site works very poorly.)

  4. Mr. Ziegler, your comment is a little extreme don't you think? Did you expect the market would just continue to explode upward without a pause?This is just a normal reaction based on profit taking after a major run-up. My portfolio was UP $7500. on Thursday, another $3000. on Friday and a further $6500. on Monday, and YES I have GDXJ in my precious metals portfolio. Should i be upset if my portfolio drops back a thousand or even two for a few days before continuing the next run up?

  6. I saw some sell signals on some of the Gold stocks I owned and got out during the market prior to the sell off; believe the market is (1) overbought and due for a reaction (2)new margin requirements imposed by commodity houses which forced some sellers on the futures, which affected the stocks. The market is due for a correction but technically, some of these gold and silver stocks had outside day and closed lower which is not bullish. Will need to do some homework on charts and see what INO has to say as well.

  9. when the IMf going to sell the gold in the open market, Is it they will? or to achive the risen gold rate or they still looking the more higher gold rates.

  10. Hi Angela,

    Leaps are an excellent way to trade longer term i find, just started using them. Would you mind sharing your trading techniques ?

    Sarkar

  11. Unfortunately, with prices going higher due to the weak dollar, very few see a correction coming. However these same people in February were bearish. Most of the analysts on CNBC were bearish for the first two quarters, and now they have all been surprised by the rally. JIm Cramer in February and March stated to sell Apple at 220, and to get out of Google at 500. Apple is 320 and google is at 625. The entire trading show which is on at 5 PM called for a bearish sell off for the first six months of the year. They were completely wrong on CNBC.

  12. This whole "rally" is such a clear indicator at this point of how detached the trading floor is from reality. Every single negative signal possible is taking place. From employment, to consumer confidence, to debt levels, to rising commodity prices. Yet the market is "ok"? Its a total game now, with no real relevance to actual conditions.

    America, and much of the western world, is in for a depression which will make the 30's look mild. There is really nothing that can stop it, unless some world changing sudden discovery or event happens.

    Not likely.

  13. Pretty close already, right. Still, there will have to be a correction and I call that correction medium term (1-2 years) not days or weeks and no fundamental transformation taking out of the secular bear.

  15. market is looking very climactic, after sustaining a non-stop rise without a breath. US$ is at strong support, OIL is essentially range bound. I see stock market in range for a quite a while.

  16. Crash for sure---forget about gold and silver, they will follow the stock market down, no one, will buy our bonds, except, Bernanke and the bonds are worthless, like the $USD. Obozo is gone , as usual, AWOL, when the s#*t hits the fan. When he gets back, after pissing away more of our tax dollars, he says, he will cut a deal with the new congress. Barry doesn't get it yet, he has lost all power, including his own party members. No more walking the plank for their sorry leader. He will be ignored, impeached, or deported if he doesn't resign. I don't care which! This fraud as gone on too long.

  17. +1000 on this comment.

    "but the profits will disappear as inflation increases the cost of capital goods." well the Fed will just have to print and inject more money (via POMO) then, won't he 'Zimbabwe Ben' from the Robert Mugabe school of money printing.

  18. I am in real estate and can tell you that with over 9 million american homes in "shadow" foreclosures by the banks, we are still on the verge of a huge collapse. In and out quickly, one who holds long term now is subject to empty bag syndrome.

  19. Obviously the markets are just rising due to inflation..Anyone who beleives there is a recovery must get their head checked//

  20. The markets will continue to climb the wall of worry for a few years as in the past.

    Martin V

  21. How many days EMA are you using on the S&P500? I have tried what you do and find too many buys and sells. Sid.

  22. RobertW: Perfect timing in 12 years? Wow that's quite something. Can you shed any light on this, or can you at least warn us when things go south? How early can you detect this? Sid

  24. Angela, do you mind telling us the MAs you use? Any other insights would be appreciated as your yearly average of + 40-90% is excellent. Thanks.

  26. Though I have turned a couple of profitable day trades (long) since the election, I still lean towards the bearish side. Most of my concerns are of a fundamental and political nature. And since these types of issues usually show up as a crisis style of panic selling, I can only hope that I am 100% short they decide to hit the fan. Time will tell.

  27. Dear Adam,

    I have question to you regarding S&P500 video you posted earlier.
    When we look on the Monthly candle chart we see that last huge move down was closed lower previous swing,I mean monthly candle on Feb.27.2009 closed @ 735.09 which is lower previous swing where Monthly candle Sep.2002 closed @ 827.31. So the action we have now is a pull back up which may drop about the same distance as was previous move up, which is understandable on your videos.

    So my question is the following, whether S&P/TSX Composite index (Interi (^GSPTSE) will react the same as S&P500 and drop down??? because US and Canada had similar moves in history.

    Please describe.

    Looking forward,

    Ivan

    1. Ivan,

      Thank you for your feedback.

      The jury is out for now. Let's see how things play out at the end of the month.

      Adam

  28. If we can ever devalue the dollar enough to get some exports going we might pull out of this mess. The developing world, and some of the developed world are enjoying high growth and prosperity. It is mostly the western meddling countries, and the countrys they meddle with that are really hurting. As all the westerners and Japan, race to devalue their currency to get in on the export opps. the US is in the position to win if need be. Of course the new Congress is already talking about how they have to beat Obama at any cost so God only knows what they are liable to let happen in order to gain power.

  29. Why can't we give 600 billion worth of tax breaks to companies to start new manufacturing facilities. That would create jobs, the dollar would be stong and America would be on the road to being America.

  30. The Market the Dollar and Gold are all up and that friends shows us how government intervention in the free enterprise system can take all bets off the table. Hence Gold up $50.00 on a ''Red'' triangle. Thank you chairman Bernanke! With 1 trillion plus a year being, ''injected'' into the system buy some silver before it`s to expensive. Still hoping for the best!

    Thanks you Adam for all your help, Lynn

  31. I like the "stealth bull" post. Regardless of the poor economic fundamentals and the lame-duck politics, I think the S&P has the potential to rise to the 1500 level through next spring. That's, of course, barring an international game changer like Spain defaulting on its debt.

    Re: Angela

    "My own ‘system’ is to trade 2X and inverse 2X funds (or one can use LEAP calls and puts instead) back and forth, following relatively short term EMA crossover signals. It’s a simple, bulletproof trend tracking process, averaging from 40% to 90% gain in account capital value per year."

    If this is really true, maybe we could get together over coffee and talk about it?

  33. We may issue our comments, but we the people have done nothing to stop our employees (434 representatives + Ron Paul, BHO the 1st, and 100 Senators)from continuing their charade. This is largely because all these "employees" are members of 2 political parties, and so we are reduced to 2 politically motivated views. Parties control member voting, and they both are addicted to power and money. Every newbee that makes it to DC soon finds out they either cooperate or they are ignored, or worse.
    You all get it, but most of the US does not, and all they want is their Gov. checks, or a rising market.
    "fools and their money are soon parted". Take cover.

  35. The right word is "Shallow". If you belive that you are making money being in the right side of the trade well no you are posibly braking even at best. That is what mkts hold for the future. The FED is distroying the world's dollar reserves. As former Treasury Paulson said: The Dollar is our currency but it is the rest of the world's problem. Besides of that the FED has been doing this for several years pumping and dumping the dollar as they see it fit. Wrecking economies across the world to keep the party going.

  37. I did not vote because I think neither of the options I found appropriate. First, you talk of tangible recovery.. What has been happening since March 09 if not a tangible recovery? Second, I do think a correction will occur end of December or early January. Till then, market will keep grinding higher.

    I am not sure why everybody thinks there will be inflation and dollar demise etc. etc. The original problem (the sub prime..) caused a huge amount of money to be concentrated in the hands of a few. So the government has only done it right by printing a large amount of money and restoring the status quo in a sense. Meaning this printed money is not distributed in the hands of large number of citizens (that would then cause inflation). The printed money is to be made available for banks which will lend them to businesses and those responsible people who will need that money and who will repay with interest. Period. And I don't believe people/businesses are borrowing out of control because those days of irresponsible lending and borrowing are over now. Money is not available for cheap to anybody and everybody. Interest rates for borrowing by businesses and individuals is still high. So inflation is not so much of an issue now.

    It just seems then that the pre crisis status quo is being restored by printing money. The only difference between then and now is that today there is about 15% more unemployment because businesses had to adjust to the shock during the crisis. Basically a lot of fluff has been flushed out of the economy that was costing money. The Dow is 11K and the 3K worth of fluff (bear stearns, citi group et al) are all gone.
    Most tech stocks are doing just fine which is why NDX has recovered very well.

    USA is a 15 trillion dollar economy and there is ample demand for dollar and dollar denominated assets on this earth. No other nation on this earth is as humungus in GDP as the USA.

    I think most people are unable to see the future and hence feeling the pinch of uncertainty.

  39. Hector makes a good point, there is certainly still evidence of negativity out there. But the pundits I see on TV are banging the table saying that everyone must be in equities and commodities right now. Could there just be smarter investors on this board, or are they (we) merely typical?

  41. Looks like a continuation of the good cop--bad cop routine.

    The Democratic "party" pursues every spiritual, social, political & economic scheme it can dream of while committing unspeakable crimes against God and man and the Republicans shake their heads and mumble tsk, tsk.

    When the Republicans gain power they pull back on the reins BUT DO NOT CHANGE DIRECTION>>>>>remaining in the service, knowingly or unknowingly, of those hidden monsters who pull both the "left" and right" puppet strings.

    Looks like P.T. Barnum was right...

    Oh yes, $50 silver and $2,500 gold before Uncle Serpent issues gold backed New World Order currency. Maybe the basic denomination will be 666 SDRs while the lights go out across the world?

    Another tinhead? Yes if all conspiracy theories really are just theories...

  42. Many interesting comments but it seems to me that NOBODY is talking about the real underlying and fundamental problem that neither Bernanke or the government will address. The foundational problem that is NOT being dealt with is simply that our monetary system of fiat currency and fractional reserve banking is a PONZI SCHEME by its very nature, and until we return to sound money based on gold and silver, and/or commodities of intrinsic value, we will continue to muddle from one crisis to another.

    As long as the International Bankers are allowed a monopoly to print fiat (read fake or counterfeit) currency, and enforce its use through "legal tender laws" then nothing will change in a positive way, Ron Paul has the right idea, ABOLISH THE FED, their policies are disastrous.

    Some may question my assertion that our present monetary system is a Ponzi scheme, and for those who doubt that is true, I have one fundamental question, WHERE DOES INTEREST COME FROM? Most will say it is paid out of profits, but that begs the question when our money supply comes into existence as DEBT through BORROWING! In Canada we had at least one honest Central Banker, albeit a long time ago.

    Graham Towers Governor of the Bank of Canada, (our equivalent of the American Federal Reserve) testified before a Commons Finance Committee in 1939 as follows; "every bank loan is a new creation of money, and when it is paid back it ceases to exist" Now think about that for a minute, it means that ONLY the PRINCIPAL of a loan is created, BUT, using a standard 25-30 year mortgage (French meaning death gamble) at an average 5-6% interest rate means as much as TWICE the circulating medium is cancelled, effectively taken OUT of the system as was originally created, and can only be replaced by more and bigger loans, inflation anyone?

    Now you SHOULD understand the Ponzi scheme reference because the only way that interest can continue to be paid is if there is a never ending parade of new borrowers willing to go into bigger and longer lasting DEBT to reliquify the system. EVIDENCE, cars loans that were normally 3, at most 4 years are now being extended to 6 and even 7 years. Retail stores offering no money down no payments for 2 years deals, liar and sub-prime loans, teaser rates on credit cards, anything to keep the credit expanding.

    Technically and mathematically INTEREST is impossible over the long term under such a system because eventually there is no viable collateral available to loan against and the DEBT PYRAMID has grown so large it becomes increasingly difficult (and eventually impossible) to service. Like kids on a lengthy car trip, ARE WE THERE YET?

    To explain it another way, INTEREST accumulates as DEBT until the bankers own everything because there is nothing left to collect. Governments become the borrowers of last resort when consumers refuse to borrow and spend more than they actually earn, and WAGES have not kept pace with inflation!. While the bankers love being in bed with the government because of their taxing powers, that also has its limits, they can only collect so much before they kill the goose that lays the golden egg, either a dictatorship is imposed and we all become slaves of the state, (some would say we already are) OR, the masses rebel and we end op with martial law to control the rioting, looting and social unrest that is bound to follow an unjust system, that COULD and SHOULD be fixed.

    CAUSE and EFFECT, if the system is NOT FIXED and honest constitutional money restored then the choices are rather stark, hyperinflation looms on the horizon, a dictatorship soon after, anarchy at the very least, and it is entirely avoidable if the powers that be would just ADMIT the abject failure of the fiat currency system since 1971 when Nixon abolished the gold standard, and deal HONESTLY with the consequences we now face as a result!

  43. The market is what it is. Looks to me like the fed has juiced this market with jaw boning qe2 and now plans to print 600 billion about 75 billion per month. Market has moved up on low volume. We have broken out of short term bases on the daily charts of the major indices, and are at resistance on weekly and longer term daily charts. Logical place for a retracement other than the high volume recent breakouts on the daily charts. The fed seems to be the market juice at present. As we know employment data is a lagging indicator and consumer spending is a leading indicator. Where is the beef in this rally, I don’t see it, but it is what it is. To me the risk is to be long this market, but as long as interest rates remain low and the fed prints money and the dollar heads lower the market will head higher. Dollar is having a bullish engulfing candle today and therefore we may get a move back up towards 78.25 if so we will get a correction time and duration unknown. Major indices have been riding an 8 ma from September which says stay long. Markets will either digest gains here and move higher or pull back. I am looking for the latter but it is what it is. For now and in the sometime distant future the fed rules with the help of the pump monkeys on cnbc. Looks like we will have deflation in housing, and inflation in everyday life purchases.

  44. It is good to know that there are bears out there having:
    No, this is just a short-term, post election rally. (67%)
    and
    Yes, the markets are finally making a tangible recovery. (33%)

    If the results would be the opposite, I would sell my stocks right away.

  45. Fake it till you make it cannot last much longer. The Fed is out of bullets after QE2--and then, if they pursue QE3 and 4, the dollar will be obliterated. Opportunistic nations will move against us.

    Demand all over the U.S. has been steadily decreasing since about May 2010 from the data. Bernanke sees this and QE2 is a last ditch attempt to prolong the weak dollar---and prop up U.S. multinational company profits overseas as cheaper dollars mean foreigners will more likely buy more U.S. goods.

    So only part of the economy is givin an advantage by the FED---multinationals ---who are already cash rich and employ less and less of the U.S. workforce (now down to 16%)due to a trend in offshoring.(Was'nt offshoring a great idea!!)

    Meanwhile---on the other side of the ledger---commodities continue to move (like a wildfire) through the economy raising underlying costs (oil, wheat, cotton, you name it) which will be hard for companies to pass on to weak consumers. So even the multinationals will have their margins squeezed by higher commodity costs...this negates profit increases. The average U.S. consumer will drive less due to higher gas prices (it costs the average guy $50-80 per week to fill up his gas tank) ---remember when you were younger and less rich?---this gas price is expensive for the average person and represents a large portion of their potential discretionary spending.

    Bottom line, until employment rises meaningfully, (by 1-2% at least in the short run) ---we wont see any real increase in growth in the U.S. economy. And, I think the market has priced in about 500 billion of the feds 600 billion stimulus already. Margins will get squeezed by Q4 and Q1 in 2011 due to higher commodity prices. Demand will continue to weaken. A drop in productivity might even occur and overworked workers get ill.

    Holiday Cheers.

  46. In the short-term, we either get a 4th elliott wave down (3-5%) -- off the double top -- of a 5-wave up,
    or we get a major correction with the 1st elliott wave down (10%) off the double top -- to eventually re-form the head & shoulders pattern
    (easier seen on the weekly chart).
    In the longer-term, only the Shadow knows for sure.

  47. Note the follow-through today - lack of. Look at the complete lack of bearish sentiment - fear of going short. Down we go. Hard.

  48. @ray boren: it is not true US wldn't be in this mess if americans buy american products...Japan is an example, japanese people used to be proud of and purchase Made-In-Japan products, but they are still in this mess decades on... what americans shd do is increase its productivity, by upgrading worker's skills & tapping on technology to boost/increase output for every input, in order to compete with developing countries like China & India, whose workers' wage are so low...could american live on a low income of US$400 per month? i doubt so...

  51. Govt. orchestrated markets never last long. As it was proved in soviet union and communist china. China is sucking the west dry when the tide turns the earth will shake with fall of a big empire. This artificial manipulations cannot go on for long.

  52. I agree. Still there are too many doubters. And the market is climbing the wall of worry.
    Markets must inflict maximum damage on maximum people, so that a small minority, going against
    the grain could make money. In my opinion,its a stealth Bull market and will only end, when
    the public will start jumping in it with both hands.

  54. I like the intelligent remarks here. I tend to agree, of course, that in an inflationary money printing binge, most assets, even stock prices, will rise to keep pace. But over the past decade I have learned to avoid prognostication; instead, I follow the charts, which tell the truth of the moment, which is all we can really know. My own 'system' is to trade 2X and inverse 2X funds (or one can use LEAP calls and puts instead) back and forth, following relatively short term EMA crossover signals. It's a simple, bulletproof trend tracking process, averaging from 40% to 90% gain in account capital value per year. Frankly, I don't care whether the market or even the nation's economy rockets up or sinks like a brick. In this unpredictable market game the small investor has one distinct advantage: we can trade both sides of the markets equally profitably. We just need the discipline to follow -like a robot- the proper chart signals.

  55. It looks to me like the US economy is in a world of hurt and heading for a train wreck. The current recession is unlike most. This one is driven by deleveraging in the credit markets, not high inventories or over capacity like most recessions. That tells me that it’s going to take a long time, and/or a very steep correction to get through this correction. Interestingly, the markets seem to be treating the economy like it’s a normal recession, expecting businesses to rebound sharply. There has been some good news in that regard, supporting that point of view. If the economy does bounce back like it has in past recessions (which is unlikely in my opinion), historic charts tell me that we can expect another 12-18 months of rising equity prices before the next correction. On the other hand, if anything happens in the mean time to shut down the Fed’s shell game or the government’s social ponzi schemes, we’ll probably see a very, very steep correction…….

  56. My predictions for near term are....
    Stocks continue to rally until early next year.
    Gold will be best sector, but all others will also rise.
    Oil stays within range until end of year, will see a spike to $120 next year due to some event.
    Public will soon realize that Republicans cannot put humpty dumpty together again.
    No one remembers Calvin Coolidge (created the roaring twenties with his irresponsible easy money policy) but everyone thinks of Herbert Hoover with contempt (couldn't fix the economy after the depression hit in 1929). Same today...GW Bush gets to destroy the US economy in order to win second term, but Obama is the villain who will be one term president.

  59. Your market timing graph probably works under normal circumstances but these are anything but normal!

  60. My market timing graph has never failed in 12 years and it indicates a continuation of the market up......at least it does right now. RobertW.

  61. The fed can do what they want the writting is on the wall. We are set for a major correction which will take us lower than 08's lows, i dont claim to be able to time the market as Uncle BEN will keep pumping but when the music stops........

  62. What is about to happen is the tragic collapse of the US dollar and worldwide economic chaos. The latest scheme of the fed to print even more money and inject it into the markets is yet another disastrous mistake. What amazes me is that somehow they have most people convinced that it is being done to help the economy. Even more amazing is that most people believe the lie!

  63. Paul and Nathan hammered it -- this is dollar devaluation. Price the market in gold or euros and we're not doing that well at all....looks good on paper till you do that, then it's pretty disgusting, you've got to have real winning trades just to stay in place right now.

  64. Obama in 2011, will propose new unaffordable social benefits for the lower earners, and blame the Republicans for not allowing them to go through, causing strikes and unrest which will send the economy into a downturn, and once again blame the Republicans. The USD will decline even more, strenghtening the climate for a double dip.

  65. Volker is right, the $600 billion printed out of thin air will do little to "stimulate" the economy. What it will do is add to the deficit (indirectly) because dollars will be worth less. In the meantime, oil is up, gas is up, electricity is up, food is up, taxes are up, almost all commodities are up, housing and tax revenues are down, so the government declares we are deflationary when the reality for most Americans is that they are feeling just the opposite. Obviously, this cannot continue. The large number of unemployed (regardless of whether the government is counting them or not) has been a significant force holding down the recovery. But now, the working folks are going to start feeling the pinch. Therefore, I suggest that when the market goes..it's really going to go. Cash for fund managers is at a low (~3.5%) which means there's not much left to keep pumping the market even if the mainstream media keeps pumping it. It's not a question of if, it's a question of when. Normally I would agree with the poster who said late November or early December but I thought the market would crash over a year ago.
    And, if you recall, Geithner sent a letter to the members just prior to the G20 - essentially telling them not to do anything to "devalue" their currency...then we print $600 billion - shifting the world's currencies. China is now pissed. this will be like a house of cards.

  66. Bernanke has guaranteed the stock market for the foreseeable future. There will be no reversals during QE 2 and there is already talk of QE 3 and QE 4. We no longer have free markets...Our markets are now controlled by the government.

  67. The markets will continue to rise, but there will be no recovery. The SP500 is increasing... but only because the USD is falling. On a chart, the SPX looks like it's higher than 2010-04, but if you chart out SPX*USDX you see that we've barely hit a 50% fib level since 2010-04.

  68. The trend is your friend. The Fed just poured gasoline on some smoldering embers, so we're going to rally for awhile. Jobs were more than double anticipated this morning (a start, but not great), so I think we've got fuel for awhile. The real question is for how long.

  69. The markets in the US and in other countries are completely manipulated 24 hours a day by governments acting in concert with each other. Although some economies such as China and India and not as bad as the US and Europe, they must continue to cooperate since their well being depends on the well being of the rest of the world. All governments will continue their daily manipulations such as quantitative easement until the ailing economies have healed even if this takes many years. The US is already bankrupt, so how can they lose by manufacturing money and being bankrupt in a bigger and better way.

  70. As Republican influence takes hold in your Congress, the markets will take on a subdued tone and eventually there will be a retracement. The Republicans are against spending, so all stimulus into the economy will be reined in, having a direct contracting effect on the market.

  71. Seasonally (37 years of data) show that the market increases sharply into November during Mid-Term election years and maintain a sharply higher market into mid December. The QE2 is supportive to the market as well as the recently updated Jobs Report. We will get some pull backs, but view them as continued buying opportunities.
    In my opinion, it is too early to get bearish anything right now

  72. It seems odd that with high unemployment and more money printed that the markets just keep going up. Some of the population expect a correction and then there are those that say we are out of the woods. It just seems too phoney of a recovery and if you've gone against it, you've made no money or even lost. I still believe a correction will occur but it will happen quick and with little warning. Until then, I'll continue with the trend.

  73. Missing an option. Medium term bubble caused by Federal Reserve printing money. Profits will likely increase over the short term, but the profits will disappear as inflation increases the cost of capital goods.

  74. The market will look to be in recovery but it's a reflectoin of the purchesing power of the dollar on the decline.

  76. Rising tide phenomenon, but where are the fundamentals to sustain it? Can record unemployment, increasing home foreclosures or decreasing discretionary income in a consumer based economy do it? The political hype will soon fade away, gridlock will continue to paralyze congress and like the last stimulus the much of the money will end up in bank reserves or overseas. This market blip wont last.

  77. I do think this is a short term rally, but I don't believe it's mainly caused by the post-election effects. I believe that the Feds decision rate announcement is the main cause for this (see the huge spikes on virtually every market related is any way to the USD ). Today we have another event,USD Change in Non-farm Payrolls, which is expected to slow down, if not to reverse for a short time, the current rally. Either this will happen or not, this rally is clearly a short-time one, and I think we'll better see this at the end of November or the middle of December.

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