Replies to post #20252 on SPDR S&P 500 (SPY)

[Footquarters]

re housing existing homes


here in orlando, sales were down month to month 22%, inventory went up 3%, prices are droping 3% per month. So basically there is no end in sight for price reductions. The prices are now at December 2004 level(15% are dropping prices every 2 weeks). So all those that bought since then, have a deficit on there homes. Lots refi and home equity loans pulling out all there equity. So this may be get worse as people walk away from their homes down here. Great time to buy a home and retire again down here. People are keeping up their credit card payments before they pay their house payment.

[CaribbeanJim]

Investor's are being conditioned to become stubbornly bullish as this pig continues to fly to the moon. Behaviorial science is very interesting. Make a market go up 5 years straight like 1995-2000 and 2003-2008 and the small investor will turn from stubbornly bearish to stubbornly bullish. Then... rip the rug out so fast that the small investor is like a deer in the headlights. They won't even consider shorting because they think the bottom is near and they missed the opportunity, BUT the institutionals know the bottom is nowhere near so they create a series of sucker rallies or let er rip like the parabolic 18-month down of the Great Depression.

My guess is the US market will collapse in 2008 and it will be a Great Depression type parabolic down. Between now and then, the market will condition the small investor to be stubbornly bullish.