patrick.net

People are decoupling housing from the rest of economy in their mindsets.
Suppose i have lot of cash lying in the bank , it's either real estate , or gold or stocks.
Gold is historically high, real estate is a dead cat so the only option left is stocks.

Wall St has been unloading bonds en masse on the Fed and on the general public, and buying into stocks.

That may mean that it is time to engineer a big stock rally ;)

Or not.

"But then you see the stock market blip down 1% or so after the report of sales dropping 27% and then it picks that right back up!? Is the stock market artificially propped up? If all these signs are pointing towards a downward trend continuing, why is it that the stock market is still doing so well?? You’d think all these investors are starting to worry.Whats it going to take for the stock market to really drop? This is what really makes me question how bad things are going to get…."

Going down, the poor working Saps dumping the stocks looking for a safer bet, or pulling out their 401K to pay bills.

Goes up the next day, the Warren Buffet's scoops in and picks up the carnage, and so closes the gap of competition and tightens the noose of Monopoly's.

Don't ever forget, one mans trash is one mans treasure. Especially when the said trash is tens if not hundreds of millions in hard assets, licensing and rights.

So what will it take for the stock market to faulter? How long do we need bad employment and housing numbers before the market thinks things are getting worse, and we aren't pulling out of it any time soon?

The way the market works is for every person that thinks prices will go down, someone else thinks prices will go up. So there are people somewhere in the market that firmly feel that prices have hit rock bottom and have no where to go but up. Smart investors are actually attracted to fear. The average investor is a moron, they buy when a stock is Hot and sell it when it's losing money, they invest based on Greed and Fear. It the exact oppose of how you should invest, buy low and sell high. So despite all of these doom and gloom stories there are investors that firmly believe that market has over corrected downward and things can only pick up. At some point these investors will get spooked by continued losses, panic and sell, pushing stock prices lower yet. They will be replaced by other investors that have been on the sidelines waiting for prices to drop lower so they can profit on other peoples fears.

At some point the market actually does bottom and those that invested on people's fear and brought in at the right time will look like geniuses make a fortune. The problem is it's really difficult to tell when that point is. When stock is at $100 a share and drops to $50 a share, many investors think the stock is cheap now, they should double up on there bets, when the stock continues to slide to $25 a share they panic and sell, while at the same time people who originally brought in at $50 a share think the stock is cheap and they should double up on there bets. Then the stock slides to $12.50 a share the same thing happens again and again, at some point the stock price slide stops and started going up in price which may have all happened in a single day or over the course of years. People who purchased at or near the bottom look like geniuses, and make much money. But in reality it's extremely difficult to pick the bottom, no matter how smart of an investor you are.

The "Market" is not people anymore it's programs IMHO. There are NO retail investors in this market unless you count the blog geniuses who have been chasing their tails for about 1 1/2 years now. It's all algo's high freq and dark spooky pool day trading ping pong. Come back next month when the Hedge funds arrive back from vacation.

Stock market is a wealth creator though no matter what the cry babies say.. You can always get out and get in anytime u want .

Proper timing is a big problem though goatkick, and many still remember the .com bust and have watched their 401's get creamed these last couple of years.

Agree on the market being more determined by the programs/gov. influence then people now.