Has the stock market bottomed for the next 5-6 months?

Question

Has the stock market bottomed for the next 5-6 months?

Answer 1

I don't think anybody can accurately predict which way the stock market will go the next day, let alone for the next 5-6 months.

But the way the economy looks now, there is more risk to the downside than to the upside.  And if you are a betting man.  Then your chances are probably better if you bet that the stock market will go down.

You have to do your own research though.  Because you have to be confident in the bet you make.  Or else you will get scared by market fluctuations and sell at a loss even if in the end your bet turns out to be right.  

Answer 2

Unfortunately not.  wsatch for the market to sink over the next few months as the effects of inflation (which have thus faw been confined to food and commodities) begin to enter the marketplace at large (i.e. the $90 fuel surcharge Delta is planning beginning Jan 2009).  Unemployment is also rising which will contribute to a slowing of consumer spending, even among the employed, especially those currently living paycheck to paycheck.  Finally, the housing market is still in a slow motion meltdown and nowhere near bottom.  There may be "sucker's rallies" in the near future, and the punditis will keep telling you that we've hit bottom.  Don't believe it until every financial newpaper/news show is telling you to invest ANYWHERE BUT the stock market - then go all in long.  Right now - short is the place to be in this market.

Answer 3

I'll take the opposite view as the previous two answers...

There are three huge fears in the market right now.

Oil

Real Estate Prices / subprime assets

Obama

I believe all of these fears are very well priced into the market.

Oil:

Real destruction of oil demand is happening. Several large countries have removed their subsidies for oil, making people pay actual market prices for fuel, and destroying demand. Further, we would have heard about any significant shortages of oil and there simply aren't any. We can expect oil prices to decline, probably significantly.

Subprime:

Subprime assests are finally being sold, so even if the price of it is ugly, at least banks and other financial institutions know what the price will be. This is good news, and probably means a bottom in the financials -- also illustrated by financial stocks actually rising on bad news, usually means a bottom.

Obama.

The biggest wild card, electing him would likely be very upsetting to the market, but I think that until mid-october or so, unless he looks very strong, the market should rise on the easing on the other two fears.

We can expect some strength for a while in my opinion. ( not a lot, but some.)