Down goes the Dow

Racket wrote:

agip wrote:

I vacillate between being a total scaredy cat and a wild eyed optimist...but I'm thinking we're near the end of this sneeze.

GDP is good...amazon numbers were good, just not at expectations...valuations are pretty low compared to the last many years, etc.

the problem is the rest of the world - they are at 52 week lows. Why them and not us?

....end of a sneeze? The Fed is raising the rates and housing is slowing down. Most agree a recession or at least stagflation is coming by end of 2019, not to mention trade tariffs that will start impacting business in FY 2019.

rising rates in a low rate environment is good for stocks

yes housing is slowing. that's one part of a giant, giant economy. In general companies are making money hand over fist.

no way 'most agree a recession or stagflation' is coming in 2019. Stop making stuff up. Or link to a study showing that.

anyway, SPX just hit the official 10% correction level.

agip wrote:

I vacillate between being a total scaredy cat and a wild eyed optimist...but I'm thinking we're near the end of this sneeze.

GDP is good...amazon numbers were good, just not at expectations...valuations are pretty low compared to the last many years, etc.

the problem is the rest of the world - they are at 52 week lows. Why them and not us?

Probably the same reason the rest of the world thinks Trump is an idiot and many here don't.

agip wrote:

Racket wrote:

....end of a sneeze? The Fed is raising the rates and housing is slowing down. Most agree a recession or at least stagflation is coming by end of 2019, not to mention trade tariffs that will start impacting business in FY 2019.

rising rates in a low rate environment is good for stocks

yes housing is slowing. that's one part of a giant, giant economy. In general companies are making money hand over fist.

no way 'most agree a recession or stagflation' is coming in 2019. Stop making stuff up. Or link to a study showing that.

anyway, SPX just hit the official 10% correction level.

Here :

Try to not be so combative in the future and lighten up.

But also, rising rates are good for stocks? Maybe for bank and insurance company stocks.

agip wrote:

rising rates in a low rate environment is good for stocks

Revisiting because I'm still just completely floored. Aren't you like a financial advisor? Yeah I hear ending the free money train that companies have used to set record profits will definitely help increase stock price.

agip wrote:

yes housing is slowing. that's one part of a giant, giant economy.

Oh and how did I miss this! Housing is like 15% of GDP! So yeah it's one part, but it's a big part that I feel like you're dismissing as "ho hum :) I'm loaded up on Amazon (the FUTURE :D ) and going to the perma-bull's club later today!"

What intervention and who's behind it? It wouldn't be the Fed...would it? (I haven't heard of them doing a "180" and lowering interest rates instead of the planned hikes for Dec & into next year.).

Things are a mess globally particularly with China and our massive debt bubble which is probably 10 times more than what the Fed official tells us. ? So, if it's inevitable for the market to crash with the "big one," who keeps kicking the can down the street? Maybe we need a reset button and start all over. The big one happen in 29 and people got through it. My grandparents lived through the crash & subsequent depression and made it, as I'm obviously here. If it's going to happen let it happen sooner than later.

No, too much work locating strike price in this environment.

Ok yes I have considered it, and decided not to. That is where good money used to be made. Then again one really could nail it in the event that one can exercise the option during a very brief ppt lapse.

I haven’t done sufficiently detailed charting for maybe 2 years to get back into puts. Guys next to me constantly trying to find ways to short China have found fx to be a good low-cost vehicle this time around.

"Plunge protection team." No offense to Maserati, who I actually like on here, but it's a conspiracy theory. Much more likely to find market manipulation by big hedge funds and banks trying to secure net positive positions for themselves before dumping.

Maserati wrote:

Guys next to me constantly trying to find ways to short China have found fx to be a good low-cost vehicle this time around.

That whole economy is basically if Enron was a country. Way too much book cooking and shady deals, not to mention the fact the government can basically do whatever. People have been trying to bet against their housing market and a lot of signs point to a total housing annihilation but who knows what kind of fake numbers their government can make up or what actions they could take. Kinda hard to tell when "let's just have millions of people starve to death" is literally an option in their playbook.

Racket, agip is biased to the positive, which bias has likely served him well over the past decade.

Point being that you have to consider not only market forces, but also control mechanisms. I went over data wih him years ago, things like unemployment, GDP, etc and while I was stating fact, his response to those facts was (valuably) in synch with market mood.

So, it has probably served him well, and good for him. The question for him will be if that mood changes, will he be able to adapt his thinking sufficiently strongly and quickly in response. Momentum guys can do well—after all, the point is not to be right, but to make money.

What is your guess on future QE?

Racket wrote:

Maserati wrote:

Guys next to me constantly trying to find ways to short China have found fx to be a good low-cost vehicle this time around.

That whole economy is basically if Enron was a country. Way too much book cooking and shady deals, not to mention the fact the government can basically do whatever. People have been trying to bet against their housing market and a lot of signs point to a total housing annihilation but who knows what kind of fake numbers their government can make up or what actions they could take. Kinda hard to tell when "let's just have millions of people starve to death" is literally an option in their playbook.

Yes.

Maserati wrote:

So, it has probably served him well, and good for him. The question for him will be if that mood changes, will he be able to adapt his thinking sufficiently strongly and quickly in response. Momentum guys can do well—after all, the point is not to be right, but to make money.

Yeah I also made a lot of money in on of the best and longest bull market runs. Hell, I was making money by blindly buying calls on tech stocks!

What is your guess on future QE?

How soon is the future? There's not really much easing that can be done right now in the next year or so. Also depends on the president who is attacking his own pick for Fed chair. And it depends on if said Fed chair can remain independent.

It’s not about the people surviving a depression, it is about the government and the elites surviving and prospering.

Fascinating that T actually got elected, because the political dynamic has changed. There are now new incentives on each side.

Interventions occur through both guarantees and outright purchases. It is the timing that is the most important thing—at the end of a trading cycle of 2 or 3 days, the important thing is that the buffering cost less than the benefit it produces. The markets are mot so much controlled as they are managed. Gov money is used for the benefit of future public expenditures, which is reasonable. The players used are compensated, and some self-dealers make a killing off it, and a handful of outsiders can make some money by making educated guesses.

It happens, but it is not primarily a nefarious conspiracy. Yes ownership has slowly concentrated, and if one wishes to believe that is according to plan, so be it. I see it as more of overt policy than covert conspiracy. It is all out there in the open.

As agip observed we are now at interesting levels. Gotta sign off again, but wow another big day so far. Good luck to all

See? It just bounced off that level again, same as Wednesday’s close. They are going to try to hold that line

Racket wrote:

agip wrote:

rising rates in a low rate environment is good for stocks

yes housing is slowing. that's one part of a giant, giant economy. In general companies are making money hand over fist.

no way 'most agree a recession or stagflation' is coming in 2019. Stop making stuff up. Or link to a study showing that.

anyway, SPX just hit the official 10% correction level.

Here :

https://www.bloomberg.com/news/articles/2018-10-18/u-s-recession-chances-in-next-two-years-top-60-jpmorgan-says

Try to not be so combative in the future and lighten up.

But also, rising rates are good for stocks? Maybe for bank and insurance company stocks.

Apologies for the combativeness - between midterms and this correction and an upcoming race I'm not behaving as well as I should.

Anyway, one economist does not equal "most" economists.

There is no majority of people wh think we'll have a recession or stagflation in 2019.

Racket wrote:

agip wrote:

rising rates in a low rate environment is good for stocks

Revisiting because I'm still just completely floored. Aren't you like a financial advisor? Yeah I hear ending the free money train that companies have used to set record profits will definitely help increase stock price.

it's a fact. When interest rates are low but rising, stock performance tends to be very good. I'm too busy to find the study backing that so believe it or don't. the logic is that when interest rates are low but rising...that means inflation is low and business conditions are improving. And interest rates are still low, so they can borrow easily. Makes intuitive sense.

However, when interest rates are high and rising, that is terrible for stocks . It implies the fed will do what it takes to choke off inflation, including throw the economy into recession.

And companies have done a lot more to make tons of money than some magic government spigot of cash to their income statements. The economy is moving ahead smartly, for good reasons.

Has been for 5-6 years.

Maserati wrote:

Racket, agip is biased to the positive, which bias has likely served him well over the past decade.

Point being that you have to consider not only market forces, but also control mechanisms. I went over data wih him years ago, things like unemployment, GDP, etc and while I was stating fact, his response to those facts was (valuably) in synch with market mood.

So, it has probably served him well, and good for him. The question for him will be if that mood changes, will he be able to adapt his thinking sufficiently strongly and quickly in response. Momentum guys can do well—after all, the point is not to be right, but to make money.

What is your guess on future QE?

this is fair

Except the last - I think the whole leaning on QE for the stock market rise is lazy thinking. Sure it's one factor, but only one.

At the moment, the major indices are all ahead of today’s opens.