Down goes the Dow

agip wrote:

just 6% below the 200 day moving average on the SPX.

what the algos taketh away they giveth.

Getting above the 200 day would be a gut check for many - to cut back on stock exposure at that milestone or hang in there.

Hard to get too excited about stocks given all their problems. But they climb the wall of worry - that's what they do.

If the Fed stops raising rates, a trade deal with the Chinese is worked out and the econ data stabilized and if Brexit isn't a cluster event...that could get people more bullish.

I covered my short position today. What's gonna be hilarious is if Trump claims a China deal (there won't actually be on of course but he'll say there is) then stocks will rally hard. Then the Fed will come in and be like "wow economy is really doing better than we expected. Gonna do 3 rate hikes this year now!" and we're back to where we started.

Also, China is busy making friends in the Pacific and Africa right now while we're busy alienating our allies. China's stock market can't get much worse but ours has a lot more room to fall. Xi has to know that Trump is desperate to pump the market and if I'm Xi, I'd hold out and wait for Trump to get kicked out in 2020

Aho wrote:

WiIIiam wrote:

Reported.

Thanks. I guess he’s been banned before for bad behavior, but apparently didn’t learn his lesson. He’s been kicked to the curb again for at least 24 hours, possibly longer.

Who's gonna save me from myself? Bought more TQQQ today. Could have timed it a bit better, but not altogether bad. TNA seems to be pretty strong lately. Even Apple up, so somebody's buying it....

Aho wrote:

WiIIiam wrote:

Reported.

Thanks. I guess he’s been banned before for bad behavior, but apparently didn’t learn his lesson. He’s been kicked to the curb again for at least 24 hours, possibly longer.

Sorry to disappoint you.

Ghost of Igloi wrote:

Aho wrote:

Thanks. I guess he’s been banned before for bad behavior, but apparently didn’t learn his lesson. He’s been kicked to the curb again for at least 24 hours, possibly longer.

Sorry to disappoint you.

Apology accepted. I guess a 33 hour ban was enough to get you straight. Hopefully you’ve finally decided not to be a hater.

Gonna be a lot of really disappointed bulls when every company misses Q1.

Oil is currently on the way back up, over 50 a barrel and it'll likely go to 60-65 a barrel before dropping again in my opinion. US producers will be all too eager to ramp up production again now that price per barrel exceeds costs.

Short term, I see some consumer prices of "stuff" staying the same (gadgets, tech, keeping up with the Jones' kind of stuff). Globalization has been great for keeping a lot of prices low because you're not just making 10 of your product for Jack and Sally at the corner market, you're making millions of your product to sell across the global with your huge multi-national conglomerate. Assuming China comes to the table then maybe supply chains can be restored in time but China is buying less and less anyways. They're already in a bear market and their central bank has had to once again incentivize buying and boost consumer morale. Maybe it works, but I see a potential trade deal as only fixing a small part of the problem

The problem is now rising prices in things you don't buy at the mall : gas, healthcare, land, etc. That's going to put inflationary pressure on the consumer and the Fed will be forced to raise rates. Then companies that spent big on stock buybacks will wish they kept that cash on hand for actual business growth rather than shareholder rewarding as they suddenly realize getting loans wasn't as cheap as it used to be.

Racket wrote:

Gonna be a lot of really disappointed bulls when every company misses Q1.

.

so we had an all time record xmas season and massive hiring at the same time companies were all missing targets? how does that fit together?

agip wrote:

Racket wrote:

Gonna be a lot of really disappointed bulls when every company misses Q1.

.

so we had an all time record xmas season and massive hiring at the same time companies were all missing targets? how does that fit together?

You can have record results and still miss an aggressive budget.

agip wrote:

Racket wrote:

Gonna be a lot of really disappointed bulls when every company misses Q1.

.

so we had an all time record xmas season and massive hiring at the same time companies were all missing targets? how does that fit together?

All time record not gonna be all-timey enough. Besides, retail stores like Target and Wal-Mart aren't gonna save the stock market. In fact, Target and a bunch of other retailers missed YUGE back in November's earning season despite all time consumer buying which gets more all-timey every month because people keep buying and buying

I'm still liking short term high yield bonds.

0-5 year maturation

almost a 6% coupon

some upside, some downside

Sure seems like a good, slightly more conservative option than stocks at this point. the short maturation gives you some protection from mass bankruptcies, you get a decent portion of the expected return of stocks...just in the coupon.

Anyway, I'm selling some stocks and buying short term high yield instead. Just to take some of the edge off a portfolio.

The bet is that the economy will muddle along and not go into recession. Stocks would not soar in that situation, but I'll be sitting, getting my 6% coupon.

agip wrote:

I'm still liking short term high yield bonds.

0-5 year maturation

almost a 6% coupon

some upside, some downside

Sure seems like a good, slightly more conservative option than stocks at this point. the short maturation gives you some protection from mass bankruptcies, you get a decent portion of the expected return of stocks...just in the coupon.

Anyway, I'm selling some stocks and buying short term high yield instead. Just to take some of the edge off a portfolio.

The bet is that the economy will muddle along and not go into recession. Stocks would not soar in that situation, but I'll be sitting, getting my 6% coupon.

I hear Argentinian debt bonds have like 50% yield. Now that's high yield!

Anyways, I hear this government shutdown might actually start affecting GDP if it doesn't get resolved by like, February 1st. Also there's something like $500 million in rent/mortgage due this month from workers that won't get paid.

markets have been taught to utterly ignore politics. It never matters. The American economy is a supertanker that is very very hard to move off course.

that said, we've never had such a bad president.

Lots of junk bonds need to be rolled over agip

https://www.marketwatch.com/story/as-maturity-wall-looms-refinancing-risk-for-junk-bond-market-hits-nine-year-high-says-moodys-2019-01-09

Speaking of rolling over, when do the markets start rolling over again? Level or reason?

Ghost of Igloi wrote:

Speaking of rolling over, when do the markets start rolling over again? Level or reason?

Hopefully we get a pullback tomorrow so I can sell my short position for not a total loss. The bullish euphoria is hilarious though

"Apple's problem's are just them not representative of the market" - False

"Trade deal coming any minute now" - False

"Fed won't raise the interest rate anymore -" See ya on Friday when CPI comes out!

"Economy is still strong!" - Fed funds futures pricing in zero rate hikes because economy projected to be too weak to handle rate increases

Can't believe this market can't handle even a 3% overnight rate. Anyways, when I sell this short position that's eating my soul I'm sure I'll feel less grumpy

What was the recent low 2,450 or thereabout? I would bet a retest.

Opps 2,351....that becomes the target with 2,650 on the upside.....

Ghost of Igloi wrote:

Opps 2,351....that becomes the target with 2,650 on the upside.....

My exposure is to the Nasdaq 100 which hit 5899 on Christmas Eve.

Also I can't be the only one to think it's weird that we've gained 10% on the major indices in 10 trading days

It is weird but more characteristic of a Bear Market, so odds for a reversal and re-test of the lows are high.

Ghost of Igloi wrote:It is weird but more characteristic of a Bear Market, so odds for a reversal and re-test of the lows are high.

I agree this is the most likely scenario (i.e. reversal in the short term is far more likely than continued upward motion.

Of course, financial markets are highly unpredictable...