If you're not ready to retire you shouldn't worry too much about the market. I'm not an analyst but I see these as mere corrections. If you're a day trader -- yes. Hedge funds are in trouble and some of the mortgage companies that overloaded on subprime (bad credit) loans are in trouble as well.

I am not worried about the market 'cause I'm not ready to retire and don't care about age 65. I want to retire when there's enough cash in the bank. My timeline is 60 at the latest. 401K is in aggressive stocks and mutual funds are at dollar cost averaging (putting in the same amount of money per month regardless of price). For those of you in your twenties, this is highly suggested. Sure, you may have student loans, credit card debt due to the wonderful salary at the commuters but make yourself one of your bills and put your name in front of everyone else. It looks like it's impossible early on but when that little nest egg starts acumulating that compounding interest you'll be amazed. Don't touch it and let it grow. I only share with you some of the things I am doing to give you ideas. Trust me, they work. At the ripe old age of 18 it was burned into my mind to do this. Twenty years later it's starting to show some nice numbers.

Good Luck!

 

Dollar-Cost Averaging my friends. This dip could end up making some people a lot of money. If you're not already in index funds...now's a good time to start...

P.S. - This seems more like a market correction to the explosion from just a few weeks ago. It's happened before, it'll happen again.

 

FWIW, I do a little day trading on the side, and happened to have my eye on CAL yesterday when it started selling off a little after 2pm.

Things started out bad in the morning for the entire airline industry because of the overall direction of the market, and because of rising oil prices with the hurricane fears. But in the afternoon, what it looked like to me was, someone with a lot of shares (we're talking millions) appeared to be liquidating their position. More than likely, it wasn't by choice. It was possibly a collapsing hedge fund who was having their position liquidated for them. The reason I say this is, whomever was doing the selling had no regard for the price. They were dumping thousand of shares at a time for whatever price was being asked. Some shorts may have seen this and piled on, making things even worse. And that's also why CAL bounced so sharply back today, the smart money new it was an anomaly.

 

exactly,

the market is nothing more than glamourized gambling. 2 things you look for when you want to buy a stock is the PE ratio and the 52 week high. The market is in a selloff right now, because most of the stocks out there are all at their highs. It makes perfect business sense to sell, sell, sell. That is how you make money in the market.

So, if you are a venture capitalist you will use this downturn in the market to buy,buy,buy.

As far as all this talk about volitility and liquidity that is just Squawk on the street talk. Will it affect the airlines? Probably not.

 

We have been waiting for this for a while now. Thankfully it finally happened. We were in the second longest bull market in the history of markets without a 10% correction. On average, there is a 10% correction about every year or two. When the dow hit 14,000, along with the sub-prime mortgate mess, a sell-off began. Investors started to take some profit from the last 4-5 years. Today, the market hit the support level and immediately picked up about 250 points (market was down more that 250 points for the day, and closed down only 15). That is a very bullish signal. Is there more to come? Who knows, but the market is priced very well (even at 14000), and earnings continue to support the price level. The market is having a blue light special now...stocks are on sale!

 

....apparently they just couldn't spell it.

Just pulling your chain.

 

Hey, I didn't say I was the smart money!

Good catch!

 

The simple reason why the market is going down is that there is no DEMAND. If there is no DEMAND for something (stock in any company) then the prices will fall to levels where people, investors, funds, etc., think it is a bargain.

Right now the market is skittery. Much of the gains made over the past 7 months have been wiped out to initial purchase levels. Technically the market looks for an even deeper correction, especially in the tech sector. The retrace could quite possibly be another year 2000 disaster. If unsure what to do, I would liquidate and remain CASH at this point (or wait for small bounce then bail). Stay in CASH until the market stabilizes (read into it several months).

As far as the airline sector, to me it still looks lower. If you are an options player I would probably short CALLS (short term) or go long PUTS for longer term gains, especially with UAUA, LCC, CAL. Some of the regionals look dead, MESA especially. I wouldn't be surprised if MESA falls to a price under $1.00 which would force a delisting from NASDAQ.

For sectors to buy I would scout around in the Natural Gas Market, Alternative Energy sectors, and quite possibly GOLD, BUT only IF the sectors begins an up swing.

 

Much of it is pure speculation, nothing more. Ultimately, companies are going to try and put out as much info as they can to boost their stock. It's not a really good bearing on how a company is really doing as numbers can be heavily manipulated and depending on the board's agenda, can greatly mask a long-term problem.

You want to see screwed up, take a look at petroleum futures. Somebody sneezes wrong and prices skyrocket. The Katrina aftermath was nothing more than the excuse they were looking for to make more money. Gas prices have gone up, and so have big oil's profits. Coincidence?

I really don't know the ins and outs of it all, however it's cyclical, like aviation. It also relies heavily on the economy. I have a hard time believing that with the prices of commodities increasing that it hasn't had an effect on the average American's spending and I think the smoke and mirrors are finally starting to clear out. People who bought homes on Adjustable Rate Mortgages, new cars, and all the neat stuff that goes with our consumer culture are having it catch up to them. All of a sudden your mortgage goes up a few hundred bucks, it now costs $70 to fill the tank of your SUV when it only cost $35 a couple years ago and you have a long commute to work from your home in the suburbs. Bubble is bursting. Foreclosures are up, and sub-prime lenders are taking it on the chin.

 

1) USA is leveraged to the hilt. 2) Foreign investors are nervous that the USA (and USA companies et el) cannot repay so they shut off investment funds into the country. 3) Massive amounts of money spent on a war that they cannot win, 4) a president making all sorts of incredulous foreign policy blunders, 5) lost jobs overseas (China) as well as over the border (Mexico) due to NAFTA agreement.

I would not expect a lot out of the market anytime soon. In fact, I would bet on a slight recovery (signal get out of investments) before another MAJOR move downwards through the end of September (at minimum). Not quite sure I would bet on the October rally either. (I guess only time will tell)