Time to sell the news?

[hakrjak]

Wasn't intending this thread to become another debate on Hyperinflation (Which people here have been predicting for what, 4 years now without it happening?)

I will say though, that you are getting too caught up in the fundamental analysis and forgetting the X-factors. This is very similar to the debate that went on maybe 6 years ago where 90% of the people here were predicting sky high interest rates (And that too never materialized).

The key X-factors are that the US buck is still the world reserve currency, and the US Government is not going to allow the dollar to go through the floor. They simply won't allow their citizens to go broke overnight due to inflated currency (Just like the US Government is not going to allow interest rates to rise until the price of houses goes back up). You'd see us Nuke China before that ever happens! Devaluing of the US Dollar is being used right now as a stimulus technique on the $buck, but this policy won't continue once the economy rebounds. The same money that has been printed will be taken out of the economy again, and the US Dollar will return to a stronger value. If you aren't a currency trader, and you invest in dollars (In your 401k, savings account, or whatever) -- You may actually wake up to a nice surprise in 20-30 years, that your savings has much more buying power than it used to. If you are a currency trader, then you have an opportunity here to make some short term cash, as long as you exit the foreign currency back into the dollar once the devaluation period reverses.

Other x-factors to consider for the future: If the new congress sticks to it's promises regarding cutting spending, and balancing the federal budget -- They can work on paying down the national debt and putting the country on a track to financial solvency again. Many possibilities here, depending on what happens in DC. Have "fiscal conservatives" on both sides of the aisle learned their lesson from this election? I sure hope so...

Cheers,

- Hakrjak

 

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[Guest3722A]

DJIA with a 50 sma (monthly):

DJIA with a 200 sma (monthly):

Each candlestick represents one month. Each chart is 2 years in length.

These charts will put a rhyme behind my reason as to why I typed this previously:

To address what hakrjak is concerned with I'd have to question why a longer timeframe such as with a 401k needs to be based on a short term move. Why not wait for a move to start and a confirmation as opposed to an immediate decision based on a short term statement like 'sell the news'?

If I were in that position and wanted to tie my sell decision in with a forecast of the djia, I'd probably wait to see where the last day of November closes. If below 10,500 there should be caution. If it goes below 9900, I'd be thinking the probabilities of a short position may look better.

Same with December.

Put it all together and you will have points of reference to help aid in your decisions.
These charts should update daily so you'll be able to reference back to this post as time moves forward.
I used monthly charts above because a 401k was referenced.



The charts below are drawn with daily candles for those who may be impatient and actually like watching gyrations induced by day to day noise:

This has not a single thing to do with prediction as many fundamentalists would like to believe, but more to do with trend from the view of different timeframes.

Hope this helps.

-Chris