the DOW

With everyone saying things are going to get worse and no one really proclaiming the "bottom", what do you guys think the market will do? I just got done reading about how Obama's fiscal spending mirror's Japan's and we all know how ineffective Japan's measures were. Not to mention, the Fed's biggest weapon is now out of the picture. Pair this with the "average" recession lasting 14months, i think we're seeing a speculative rally that will soon be deflated.

Currently, i think we're seeing end of the year optimism, at the very least, Christmas optimism. After Christmas, i'm thinking the market's going to return to it's doom and gloom. Most likely we'll even see a return to high 7000s in the DOW. For this being a recession to rival the great depression, it sure doesn't seem like the market's acting like it. Unless it has already priced in all the bad news.

What do you guys think?

With that sort of in-depth analysis, why are you asking us? It sounds like you've already applied some critical thinking to the issue.

Well aren't you useless. Yes, i've thought about it. I'm sure any serious trader has. But this isn't math, the more thought and work put in will not return a correct answer. Fact is, more thought and work will only return an abstract answer no more correct than anything else. For all i know, my conclusions could be entirely wrong. Perhaps i haven't thought of something. God forbid someone else has a contradicting opinion.

I'm sure someone out there is buying stocks like crazy. For the purpose of this thread, i'd like to know what makes him/her believe now is the time to buy.

I'm not some newbie looking for a "pro" to tell me where the market is going. A serious discussion was the goal, but it looks like i'm in the wrong place for that.

i am also thinking that recession is not over yet and expecting dow to fall 6800 or even to 6500.
factories just started to downgrade their sale and this sort of down momentum cant be over within few months.
world may recover before london games.

With more deflation, there will be more layoffs. That along with ARM's re-setting soon, there will be even more foreclosures. Thus, IMHO the DOW will sink even further.

Wow...I posit a serious minded answer and you rebuff me with the greatest agitation. Everything people say isn't always meant with a backhanded meaning...

I'd be buying certain things that will be the leading indicator of a resurgence of economic stability. Things like logistics companies, resource producers, and a few "back burner" financial concerns (think regional style banks). The idea behind it is the "chain of events" theory. Company X starts to realise a turnaround in demand, so it goes to the bank, borrows money to buy the resources which then have to be shipped to them. It sounds trite, but it's similar to the idea of the chicken and the egg. An assembly line on a massively macro scale.

Something else to remember is that a lot of companies are getting burned only by the herd mentality. Ameriprise is a great example. Nothing has faulted on any fundamental level at that company, but because they're considered a "financial concern", they get dragged down with the rest of the group like UBS or AG Edwards. I also think those would be the companies that will make the sharpest return, once rationality has an explicit meeting with a pool of available liquidity.