What will be the lowest close for the DJIA in 2008?

This question has the aura of a death pool.

Its a good question tho!

Hubdubbers who like this question may be interested in this question I just created:

http://www.hubdub.com/m18711/When_will_the_Dow_next_close_up

Well, so far, we can eliminate the top three options. It closed October 10 at 8,451.19. If there is good news over the weekend, this could be the floor; if not, we'll fall into the basement.

http://finance.yahoo.com/q/hp?s=^DJI

We still are standing at 8250-8499 as the low bracket.
The weekend will be a long one finacially, with intense campaigning and poor economic news on the international front. However, home sales actually rose 5% and jobless claims levelled off (but thats somewhat due to distance from the hurricanes).
Some people see a real bottom in this thing at or around 8k, including Warren Buffett, who continues to invest billions, but the average American is scared and would just prefer cash, even if it isn't worth what it used to be.

The real low will surprise everyone.

At least for the very short term, the below 7000 percentage has been a good sentiment/reverse indicator when it has gotten to an extreme over 80%. Maybe one day the analysts will be talking about this new market indicator.

And... crash. There goes 8,250. This is what I get for taking a day off the Internet. :p

October 27 - 8,175.77.

Hi again, Guido. That's an interesting comment--nice and spooky, for Halloween. I infer you have bet heavily on "below 7000," because that was so heavily favored. Consequently, I've had to vote for the four ranges from 7000 through 8000 to get good odds. Well, I'll liquidate them on the way down, one at a time, even though I agree that the real target is below 7000. (I believe we'll be at 4500 this time next year--if we're lucky.)

Unfortunately, betting on this question seems to move the odds more rapidly after a heavy bet than did the bet on whether the Dow would touch 9000 by the end of Oct., so I can put down only small amounts. But maybe a daily back-and-forth betting pattern will develop against the optimists, as it did last time. I'm hoping.

Here are some priceless excerpts from this weekend's article in Barrons, "Big money managers are cautiously bullish", at http://seekingalpha.com/article/103514-big-money-managers-are-cautiously-bullish-barron-s

Remarkably, "Big Money" managers surveyed this week by Barron's magazine are unrelentingly optimistic - with 50% saying they're bullish or very bullish about the stock market's prospects through the middle of next year.

62% believe stocks are currently undervalued; 7% think they're still overvalued.
An amazing 83% say they're beating the S&P 500 this year. Wow.
GDP growth: 0.15% in 2008 and 0.49% in 2009. Inflation 3.28% in 2008 and 3.02% in 2009.
17% remain bearish on stocks, but only 3 out of 70 see the Dow closing out 2008 lower than Monday's close of 8175, and only one thinks it will be trading below 8000 next June.
The median estimate is for a Dow close of 10,642 this year - up 14% from current levels, but down 20% on the year.

With the frequency and severity of the swings in the DJIA during October, it is foolish to think that a 1200 point "cushion" over its low of the year is anywhere near enough to make us feel certain is will be the lowest for the year.
Two days of 500-point downswings, or a crummy week (which we have seen frequently in the last few months) and we are easily within on day of dipping into a close that starts with a dreadful 7*.
I just do not think the bottom was reached a week ago, and notice that this is an *extremely* volatile prediction, even on non-trading days.

Pixel, this has been a great question, and has accounted for a lot of my action here.

It would be great if hubdub would create a way for getting into and out of multiple predictions in a few clicks as opposed to the tedious methods currently employed. The last time I cashed in here, it must have taken me over 20 minutes. I won't be getting into anything where I make that many predictions again until the system is improved. If you're listening hubdub, a "cash in now" button for the whole prediction would be great.

@ eliminati- That's what makes markets. I think the bottom has been seen for this year, but when the more bearish predictions are undervalued enough, I'll still buy them.

Plenty of bears out there right now it seems. :)

The low of October 27 is still the lowest close for the year. To date, we haven't even had an intraday value below 8,000, though I suspect that if we do people will panic and we'll fall another couple hundred points very quickly.

"To date, we haven't even had an intraday value below 8,000,"

Yes we have. And it caused an immediate roar upwards, not a panic.

Today (Thursday) the Dow briefly went below 8000, causing program trading to kick in that rocketed it up 800 points from that level. No panic.

And today (Wednesday) it closed below 8000, driven down mostly be a huge drop in Citigroup. Probably the other financials like Goldman will come under a cloud--a darker cloud--as a result, in weeks to come. (But there will probably be a bounce up tomorrow.)

Another one bites the dust!

@rogerkni - When I posted comment #14, we hadn't yet had an intraday value below 8,000; it happened the following day, which is what you were correctly remarking on. However, it's all a moot point now: we closed at 7,997 today, November 19.

@ Pixelpaws: Noted.

Four bottle of beer on the wall.

Actually, I'm beginning to suspect we'll hold above 7000 this year. At least, that's how it would work if the market were sensible. There's a lot of money on the sidelines. And a 1000 point decline in six weeks, after a 50% bear market, would be unprecedented.

But forced liquidations may overwhelm all else. And there might be some really ugly stuff under the rocks in the financials. Hard to say what'll happen. Anyway, I'm betting on the four slices in the 7000s, not on Under 7000. )

For those who think Dow will go below 7000, check out http://www.hubdub.com/m18696/Will_the_DOW_go_under_7000_points_by_the_end_of_the_year
It's usually a much better % than here, and it only has to dip below 7000, not close there to pay off.

@rogerkni: over a 50% drop is unprecidented? To borrow a line from the Princess Bride, "I do not think it means what I think you think it means". Try looking back to 1929-1933 and you'll see that the DOW was down over 80%. At that point the total US debt to US GDP was 256%, in January 2008 it was over 350%. We've got a long, long way to fall and there's no brakes on this runaway train. While my predictions several weeks ago were pessimistic in the 7-7,500 range, now I'd revise them downward. I figured the bailout would have at least slowed things down for a few months, but the Treasury is spending too much time second guessing and not enough time infusing. Now the latest projection for 7.6% unemployment for next fall (2009) is enough alone to destroy consumer confidence, so I'm in with the bears this time.

Re-post

The real low will surprise everyone.
posted 3 weeks ago

DOW will now see closer to 6000.....count on it. And that's only interim. Go out a few years and you will see the DOW at 3000 or less, guaranteed.

Guido - I find you to be the most interesting person here. I was incredibly impressed when you called <9000 when the DOW was still at 11500 and everyone said you was crazy. I hope you'll continue to share your predictions, though I wish they were positive!
I'm an ameteur investor. I'd guess 6800 by year end.

sirdoug - your profile says you just joined today. if thats true how did you know quido predicated dow 9,000? i'm not saying or meaning anything bad..just curious is all.

*guido

I was reading on this site before I joined. Here's the question which he and several others had joined on.
http://www.hubdub.com/m12063/Will_the_DOW_crash_by_end_of_Oct_2008_See_below_9000_on_the_index

sirdoug...thanks. I don't cater to any big investment bank or company and only work with private individuals so I call them as I see it. But what I see has culminated from years of hard work and research. It's mind opening and never before published knowledge. 99%+ of people have no idea of what is happening and why which includes a lot of so called 'professionals' from big investment firms. History has shown markets to always come back and usually I agree...but not this time. This is a grand unwinding of 75 years of cumulative over leveraging, especially from the last 10-20 years and we are now in a vicious down cycle where falling prices erode assets and force people to sell to raise cash to cover those assets as most of it is based on credit and not real money. That selling causes prices to fall, falling prices force more selling, and so forth. It won't end until the entire credit bubble is unwound and we have a long way to go.

By the way, I am for below 7000 here, but even if it doesn't hit by Dec 31, we're still going to see MUCH lower prices over the coming years.

I agree with Guido that the Dow is going MUCH lower, and that the "normals" will get hurt. (And I, along with Guido, was a heavy bettor on the "Dow 9000? by Oct. 31" question. I also predict that we'll be at 4500 by Halloween next year (2009).) In particular, Warren Buffett is going to take a bath. (He sold billions of long-term put options on the stock indexes near the peak a year or so ago. He figured, and figures, that the market will always come back. Not this time (as Guido says). (Unless inflation saves him.) He fell for the lure of what he thought was "free money," ignoring Nassim Teleb's warnings (in "Fooled by Randomness" and "The Black Swan") about the catastrophic risk involved in betting heavily on "sure things."

But there are all sorts of wrinkles to be considered that might slow down or interrupt the decline. For instance, mark-to-market accounting could be suspended. Ditto short selling. Deleveraging could be cut off by the gov't or judiciary declaring credit default swaps unenforceable or against public policy.
========

22 frogchop wrote:
"@rogerkni: over a 50% drop is unprecidented? To borrow a line from the Princess Bride, "I do not think it means what I think you think it means". Try looking back to 1929-1933 and you'll see that the DOW was down over 80%."

That's not what I said. I specified a much shorter time period than three+ years. I wrote:
"A 1000 point decline in six weeks, after a 50% bear market, would be unprecedented."
Look at the chart. If the Dow breaches 7000 by year-end, it would be an unprecedented "waterfall" (within the context of the previous decline).

However, I have no crystal ball. I'd be willing to bet "under 7000" at the right odds--say, 20% or less.

I'm glad I have my money where it is. I don't see below 7000 before Jan 1.

then again, i have been (very) wrong before....

>>22 "At that point the total US debt to US GDP was 256%, in January 2008 it was over 350%"

LOL... are you serious? 350%? Where in the world are you getting that number? Per the CIA World Factbook (November 2008 revision, using 2007 estimates), the US Debt is roughly 60.8% of GDP. I think that number is probably closer to 70% now, given that GDP has contracted and the debt has increased significantly, but that's still a mere fifth of what you're implying the ratio is.

Source: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html

@32: I suspect his debt-to-GDP ratio may have included commitments to pay for entitlements like SS, etc. as "debt."

With the Dow at 8900 on Dec. 8 (today) it looks as though the range of 7500-7750 will hold, which is where I placed most of my bet. But there's always a chance a shoe will drop. (E.g., Russia defaults, an international "incident," etc.) I think it's unlikely this year, but a virtual certainty next year.

I'm pretty confused by the markets right now. Why are stocks up again? Is it the lifeline thrown to big 3 automakers and an audacity of hope through Obama's public works initiative? Is the effect on the markets temporary and folks here still anticipate a deep drop (like DOW to 3k-5k) in 2009? Or have the issues of over-leveraging, etc been overcome and the economy is ready to improve? There's so many articles online saying we've probably hit bottom in the markets for various reasons.

@sirdoug

the reasons that intraday traders most often lose their money is because the questions you ask are almost impossible to answer. Of course that is just what my professor says and maybe he is sour over losing some cash of his own : P

Good chance the market is within a couple of days of getting nailed to the wall. Merry Xmas.

Whilst I fear you may be correct, perhaps "good" is an inapropriate adjective in this instance. "Awful", "horrible", "terrible" would do the job better.

Great question Pixel. This would be a good one to have every month or quarter.

: )

X D

The great equalizer