Down goes the Dow

Not sure how much of a metric this really is, but FWIW, pretty much ALL the sentiment I'm seeing everywhere online is that the market is going to continue to go down. Basically no one thinks the S&P500 is going to bounce back up to 4800. A lot of big names have been calling for a correction or massive drop also... Even Elon said he expects a recession sometime between Spring 2022 and no later than 2023 (I don't recall if he said what time of 2023).

There's a guy on youtube, Meet Kevin, who sold all his holdings, worth more than $30 million. He said he's breaking his own rules but just feels like it's very likely the market is going to tank. That's an extreme example, but I basically can't find anyone online who thinks everything is fine...

I'm not buying in any time soon. Maybe after a 15% drop I'll start easing in, but it wouldn't surprise me at all if we see a 20 or even 30% drop. Inflation is already starting to cause problems with people's ability to spend. Their once excess cash is getting eaten up in rent, groceries, and gas, myself included. We're going to see the flip side all that "free" printed money. Lots of uncertainty and turbulence in the next year I think.

Looks like another bloodbath today

SARK hit 50 premarket. ETF of the year. Igy, your prediction of 60 looks like it's going to happen much sooner than expected!

Where does SARK top out? If ARKK goes to 0, then can SARK go any higher?

Seems to me this (still mild) 9% correction is from several reasons:

1/ Slower economic growth. At the start of January, the Fed's GDP Now people thought we'd have 6.8% real GDP growth in 4q21. Now they think 5.1%. This is mostly because of Omicron. (looking at you, al-Racket)

2/ Collapse in BTC. As embarrassing as it is, the tail is wagging the dog. Hot, fast, big money has been chasing crypto and they are getting smashed, which has soured sentiment on all marketable investment assets.

3/ Interest rates rising/Fed being less loose. This affects models rather than the real world but still.

To my mind, none of these is all that important...GDP growth will still come, just a quarter later. At some point people will stop caring about BTC and resign themselves to old fashioned 10% growth from stocks. Who cares if interest rates are 1.3%, 1.8% or 2.2%? Those are low numbers that corporate american can do very well with.

We're starting earnings season this week...it's often rocky going into earnigns season. Traders will want to know if this period of slower economic acceleration is worse than we think. For several years, companies have exceeded analysts' expectations so we'll see if that happens again.

The counter to the above is the hollowing out of the stock market. I mean R2k at 52 week lows? Why is that happening? That sound way too extreme. I don't have a handle on why that happened.

that's what we call a counter-indicator. When fast dumb money has decided on buying or selling, usually you go the other way. But it's not exact...sure the US market could fall 15-20% and that would just be normal.

VIX 31. Now we're getting some real numbers.

Excellent. This is about where the VIX topped out in January and November 2021.

But in the original COVID crisis, in spring 2020, the VIX hit 50.

agip wrote:VIX 31. Now we're getting some real numbers.

Excellent. This is about where the VIX topped out in January and November 2021.

But in the original COVID crisis, in spring 2020, the VIX hit 50.

That might be a good measure of my own fear. Even though we have relatively little exposed, I am going into defensive mode to protect it, picking up some SQQQ to balance the other holdings. If the VIX is a meaningful signal here this will hurt me a little. But if this is finally Igy’s bubble popping, I will protect something like one year of post-retirement travel.

I’ve been bitten too many times in the past to be feeling optimistic right now…

I could post lots of terrible Jeremy Grantham predictions. He has been extremely bearish since the financial crisis or so.

I read he put his family stock money almost entirely into emerging markets around 10 years ago.

He's been forecasting very small or negative gains in US stocks since the middle of the Obama administration. Obviously, instead, we've had one of the best investing environments of our lifetimes. I wouldn't pay much attention to him.

Although he has the courage to keep his predictions up online to inspect even after they go terribly wrong. I admire that.

He and his firm think in terms of 7 year forecasts. Going back to 2014 to get his prediction of where we'd end up in 2021...

He forecast a negative real return for US stocks 2015-2021. He thought emerging would be the best performers.

Those were obviously terrible, terrible, damaging, crushingly bad predictions.

https://www.gurufocus.com/news/267715/gmo-7-year-asset-class-return-forecast-june-2014

doc idiot wrote:

agip wrote:VIX 31. Now we're getting some real numbers.

Excellent. This is about where the VIX topped out in January and November 2021.

But in the original COVID crisis, in spring 2020, the VIX hit 50.

That might be a good measure of my own fear. Even though we have relatively little exposed, I am going into defensive mode to protect it, picking up some SQQQ to balance the other holdings. If the VIX is a meaningful signal here this will hurt me a little. But if this is finally Igy’s bubble popping, I will protect something like one year of post-retirement travel.

I’ve been bitten too many times in the past to be feeling optimistic right now…

haven't we been bitten in the past for panic selling out? Rather than hanging tight?

Depends what you own, I guess.

carmine9 wrote:

Looks like another bloodbath today

V

Have you learned nothing? Relax.

seattle prattle wrote:

Hardloper wrote:

Dr. Racket is talking about high-frequency traders that trade many times a second eat up all the short term momentum buying opportunities. There's no edge for a retail trader to gain.

I know what he is talking about but 'momentum trading' is a fairly well understood type of trading separate from the algorithm type of trading he is talking about.

I am talking about momentum trading in the traditional sense, which has been around for many years, and individual investors use all the time.

It's covered in Wikipedia.

Successful momentum trading at the retail level is, in my opinion, just based on pure luck.

By the time retail traders start participating in momentum trades, the hedge funds have already exploited whatever small amount of arbitrage or momentum was there. You're basically just rolling the dice and hoping you're on the same side.

What is VIX and VXX?

agip wrote:

doc idiot wrote:

That might be a good measure of my own fear. Even though we have relatively little exposed, I am going into defensive mode to protect it, picking up some SQQQ to balance the other holdings. If the VIX is a meaningful signal here this will hurt me a little. But if this is finally Igy’s bubble popping, I will protect something like one year of post-retirement travel.

I’ve been bitten too many times in the past to be feeling optimistic right now…

haven't we been bitten in the past for panic selling out? Rather than hanging tight?

Depends what you own, I guess.

Imagine panic selling in 2018 and being convinced the Fed was gonna "punish those mean old speculators causing 'asset bubbles' like crypto and real estate."

Then imagine panic selling again in 2020, because of COVID.

Now imagine being poor, because that's exactly what you'd be if you had actually panic sold instead of buying the dip while remembering the most important rule of investing: stocks only go up.

J. Hardy wrote:

carmine9 wrote:

Looks like another bloodbath today

V

Have you learned nothing? Relax.

Yes.

That facts do not matter to people like you.

It does look like another bloodbath today. Just as Friday was and so many other days this year already.

investing noob wrote:

What is VIX and VXX?

username checks out.

investing noob wrote:

What is VIX and VXX?

prof. google can help you more than I can.

but generally speaking, the VIX is a measure of fear in the markets. The higher it is the more fear.

it is usually used as a counter-indicator. When there is a lot of fear in the markets, it is usually a safer time to buy, as long as you are looking a year or so down the road. but knowing what is a high vix is a mystery. the vix can always go higher and markets can always go lower.

VXX is an exchange traded fund that sorta halfway measures the VIX. but not really. It's a total money pit unless you hold it for hours instead of days or weeks.

Judging from the responses, agip, racket and presumably also J Hardy all think I’m an idiot for doing what I’ve done. I’ve laid my cards on the table for all to see, so we all get to watch and find out. I’m dying to know, myself… 😅

To racket’s (presumably facetious?) mantra that stocks only go up, that may be true in your world, but I owned Nortel Networks, JDS Uniphase and Valeant Pharmaceuticals at their respective peaks, and I beg to differ…

agip wrote:

I could post lots of terrible Jeremy Grantham predictions. He has been extremely bearish since the financial crisis or so.

I read he put his family stock money almost entirely into emerging markets around 10 years ago.

So many of these loser talking heads bet it all on bearish outcomes in 2008. I mean everything - money, reputation, career, etc. They couldn't (and still can't) understand why the Fed and the US government stepped in to prevent a Greater Depression. The bears were essentially denied an "I Told You So" of the magnitude they wanted, and they've been desperately seeking re-validation ever since.

VIX 33 whoo weee, Scaredy cats.

we are setting up for a 1,000 point upmove at some point this week, I'd bet.