Another market crash?

[Kendhni]

The markets seem to be doing really but more and more I am reading about another 'crash' or a 'correction' being on the horizon.

Can the current growth be sustained?
I think not.

[Delboy]

The experts seem to think it will beat the all time high of 6950.60 set in 1999,
Despite the recent rally, the FTSE 100 is still lagging other global markets, such as US & Germany

I have read this

"There is nothing to suggest that we can't keep going higher. We have broken through previous highs and it can be sustained if we see economic recovery and earnings upgrades come through," Neil Shah, director at Edison Investment, said.

Recent UK data has suggested the economy may be picking up and further upbeat data from Britain and other major economies would help support equity valuations, which have re-rated to post credit crisis highs of around 12.8 times 12-month forward price-to-earnings.

Shah said stocks becoming too expensive or central banks reversing stimulus policies on concerns over asset bubbles were the only potential stumbling blocks in the way of the current rally.

Corporate updates on Tuesday fuelled further optimism in the market."

[howard18]

I believe that stocks will go slightly higher and then fall back. I.E. profit taking.
The trend is certainly upward but I don't think that it will pass 6900 for several weeks. But what do I know. Anyway, with today's interest rates it is certainly worth a punt.

[towny44]

Ken, surely you know by now that if you put 20 market forecasters in a room for a month you would still have 20 different forecasts at the end of the month.
More seriously Howard's comment is more accurate, until interest rates start to increase there are few other places for any spare money to be invested.

[Delboy]

This is how the market ended today


FTSE 100 6840.27
Up
36.40 0.54%

[Not so ancient mariner]

Ken, surely you know by now that if you put 20 market forecasters in a room for a month you would still have 20 different forecasts at the end of the month

Only 20 ??

[Silver_Shiney]

The crash is expected around October, but this isn't certain. Now would be a good time to get out of equities, even though prices may still rise in the meantime.

[Kendhni]

I believe that traditionally the markets always drop in October, but some of the reports I have been reading go much further (talking of a negative 20-30% adjustment).

Oddly I have had 3 different pension advisors trying to get their hands on my 'pension' fund in the last few weeks.

[Silver_Shiney]

Ken, that's the sort of drop I've been led to expect - at a minimum. The price of silver is also expected to rocket.

[kaymar]

We did this a week ago - in fact, tradition has it that markets fall in May, stay low during summer and pick up again in September. Could today be the start of that process? Probably not but on the other hand................ Anyway, I'm hedging my bets - I sold half of my equity holding last week.

[towny44]

We did this a week ago - in fact, tradition has it that markets fall in May, stay low during summer and pick up again in September. Could today be the start of that process? Probably not but on the other hand................ Anyway, I'm hedging my bets - I sold half of my equity holding last week.

Kaymar, When do you intend to sell the other share?

[Silver_Shiney]

An awful lot of people are going to be hurt when the crash comes..... Part of the problem is that many people will see markets rising and want to get in, whereas they should be waiting for the markets to fall and then buy in. For example, I bought into silver a little while ago while the price was high. The value has dropped by over 50%. I bought in at the wrong time.

[gfwgfw]

Big slip today from a heady high

[towny44]

Well why anyone would believe that market forecasters know what's happening is beyond me, after a bullish 117 point rise since Monday, today we have a drop of 143 points.
Why did the forecasters not spot this, and if they did why are still working and not living it up somewhere on the proceeds of their brilliant forecasts.
Answers on the back of a stamp please.

[Kendhni]

I am inclined to agree with you towny.
More and more the market seems to be 'building in' announcements before they are made. However the latest fall seems to be down to China turning in poorer results than expected. I have no real idea about what is fuelling the rises ... apart from investors getting naff all in savings rates ... which if that is the case then it is not a proper and sustainable growth.

[Dark Knight]

Watching Bloomberg this AM
one of the wizz kids said the drop was deliberate and traders had backed off to stop the market overheating and causing an artificial high which was not sustainable

mmm sounds like mumbo jumbo but hey what do I know

[towny44]

Watching Bloomberg this AM
one of the wizz kids said the drop was deliberate and traders had backed off to stop the market overheating and causing an artificial high which was not sustainable

mmm sounds like mumbo jumbo but hey what do I know

Clearly they must have got bored with twiddling their thumbs over the holiday because the FTSE 100 has shot up again by 107 pts.

[Kendhni]

... fueled by what ... there is no logical reason for the rises apart from some countries have pretty much said we will continue with the easing ... there is only 'made up' money ???

[david63]

... fueled by what ... there is no logical reason for the rises apart from some countries have pretty much said we will continue with the easing ... there is only 'made up' money ???

If we all understood the "inner workings" of the markets then we would all be millionaires by now!

[Ray Scully]

After coming unstuck on a number of occasions trying to guess the market high before selling. This time after watching a piece on Newsnight last week, I decided to unload the lot apart from Carnival and some Utilities. Looking at the market this afternoon I am 4% up.

Ray

[Silver_Shiney]

... fueled by what ... there is no logical reason for the rises apart from some countries have pretty much said we will continue with the easing ... there is only 'made up' money ???

that's absolutely correct - if the varicose lenders demanded their money back, the debtors would be in serious schtuck. There are no physical assets to back up the paper money.

[towny44]

Market plummets by 135 after a 107 gain yesterday, IMO they should surgically seperate the market makers from their computer screens and send them off to do a job they are capable of doing. Do factories still employ folk to sweep the floors?

[Silver_Shiney]

Market plummets by 135 after a 107 gain yesterday, IMO they should surgically seperate the market makers from their computer screens and send them off to do a job they are capable of doing. Do factories still employ folk to sweep the floors?

Given how well they perform as market makers, would you really trust them to sweep a floor properly?

[kaymar]

Latest cause for concern for markets seems to be the increased speculation that the Federal Reserve will begin to taper its quantitative easing programme soon. Boston Fed President Eric Rosengren threw more weight behind the argument yesterday by saying that the recovery may be strong enough in a few months' time to allow the central bank to scale back asset purchases.

It seems policy makers are of the belief that the strength of the US economy is significant enough to justify at least thinking about ending stimulus measures.

In most situations, one would expect investors to be thrilled that one of the world’s largest economies is firmly on the path to recovery. However, it seems investors are more preoccupied with the consequences of ending QE rather than rejoicing in the fact that the US economy is showing positive signs of growth.

Too volatile for me. I'm out.

[kaymar]

Further suggestions that the US economy is on the up and the Federal Reserve support should no longer be needed and will be withdrawn. The result of this good news? A 3% fall in the FTSE.

So, following the age-old adage and selling in May was probably a good idea. Now for the hard bit - when is the right time to buy back? September, again in line with the old saying, or earlier? Or not at all? I think I'll wait and see.