POTO>0,
It won't matter what you think today, since at the end of this cycle we will be much lower. Buy the dip with the other Muppets if you wish.
Igy
POTO>0,
It won't matter what you think today, since at the end of this cycle we will be much lower. Buy the dip with the other Muppets if you wish.
Igy
POTO>0,
More data to support your Bullish? view:
Igy
Prices most definitely are a factor in the assessment of prices. It sounds circular, but it's all about perception.
It's not so much about the price level, as it is about how long it stays there. IMO we have just reset to a new normal high of somewhere around 16.5k. If the level floats just above 16k for long enough, 16.5k then looks high.
Sure there are other factors like fundamentals, but naked prices are also definitely a factor.
Ghost I would be wary of generalizing your Boise experience too broadly. Of course, the same thing has happened here, apartments going up everywhere, building like crazy over the past 7 or 8 years.
"The real economy", everyone has their individual idea what this means. Social structures and the services they provide are every bit as important to productivity and wealth generation as are physical structures and the objects they can be used to make. The difference to me lies in how easy it is to dismantle the structures. A building of coders next to me just packed up and left--IN 1 DAY. There is no inertia in these things. Of course, the flipside is that they are not capital-intensive to start up, either.
There you have it: the mobility of capital--which is why people talk less and less about national economies, and more and more about regional and global economies. Which is why it makes sense to think that the US is in the tank even though things "seem" fine to some like agip, and why in one way it makes sense to not raise rates, because to do so would be to cut our own throats.
16.x-low, the new normal.
Maserati,
I have discussed on this thread how valuation matters and that is true of stocks, bonds, real estate, and really any asset class. In regards to stock market valuation, my view is not an indictment of the asset class but rather an argument that at these levels investors should expect meager forward returns.
I agree that in a global economy we are much more linked at the hip. Perhaps your neighbor, the coders, were financed via a venture capital arrangement that was in part financed through a foreign sovereign wealth fund. Neither one of us knows if this is true, but the point is still the same, we cannot insulate ourselves from global economic issues.
Lastly, zero interest rates and easy money, be it the Federal Reserve, the Bank of Japan or European Central Bank has some influence on the current market turmoil. That is an opinion, and so is it an opinion that what we are experiencing are short term issues.
Igy
16k
buy, Buy, BUY!!!
Where are the sheeple now? Oh, right, they are stuck in their inflexible 401k plans...if they even have them.
BUY!
Ghost, regarding the coders, I know. I know the business owner.
In point of fact, they just moved to another building. I was in on the build-out.
My point was that they can pick up and move in 1 day. Hundreds of coders. Why are they not already in India? The owner is a self-proclaimed homer. No other reason, no business reason.
Good for him. His funding at the moment is actual revenues (!), and a $30M recent round from private equity. He will not go to Silicon Valley. There are viable tech parks emerging in certain other parts of the country, my backyard being an example.
However, there is no tangible inertia, none at all.
Yes, interest rates have an effect on equity prices that is at least two-pronged: first, margin trading; and second, on fundamentals.
Pointing Out the Obvious wrote:
I knew you meant Dow 13000. Your math skills suck if you think we're half way there.
Dow peaked @ 18.3k now at 16 k.
Halfway to 13.7k.
Second Grade,
The drop so far is relatively small. We could easily be half way to literal DOW 13,000 Wednesday. The more obvious point in the argument is the direction of the market and that is likely down. I will win the argument on larger issues not petty insults.
Igy
Maserati wrote:
16k
buy, Buy, BUY!!!
Where are the sheeple now? Oh, right, they are stuck in their inflexible 401k plans...if they even have them.
BUY!
Bet it never occurred to you that folks get tired of hearing two blowhards with seemingly infinite time on their hands post endlessly with the only apparent motivation being 'hearing' the sweet 'sound' of their own 'voices'.
Oh, and "sheeple"? Seriously?
Could easily be halfway? You said we already were! Another GOI error. Change the batteries in your calculator, man.
POTO,
I will make sure Mommy makes you a pitcher of lemonade. It will soothe your tummy with the bad market and all.
Igy
Maserati wrote:
16k
buy, Buy, BUY!!!
Where are the sheeple now? Oh, right, they are stuck in their inflexible 401k plans...if they even have them.
BUY!
BUY BUY VUY, I think, is what the smart money "insiders" are doing. John Q Public appears to be doing what he always does: Buy at the top and sell at the bottom.
This is the most recent data from the Investment Company Institute last week:
Estimated Flows* to Long-Term Mutual Funds
Millions of dollars
9/16/2015 9/9/2015 9/2/2015 8/26/2015 8/19/2015
Total equity -1,128 -3,342 1,987 -10,972 -523
Domestic -3,093 -2,980 1,785 -9,790 -5,180
World 1,964 -362 201 -1,181 4,656
Hybrid -722 -905 -857 -4,232 -164
Total bond -4,512 -2,455 -6,290 -12,313 -2,287
Taxable -3,923 -2,264 -5,795 -11,463 -2,338
Municipal -589 -191 -495 -850 50
Total -6,362 -6,702 -5,160 -27,517 -2,974
https://www.ici.org/research/stats/flows/flows_09_23_15
The public has sold ~$12 billion in stocks and ~$25 billion in bonds INTO the decline or AT THE BOTTOM.
While this has been going on, the large commercial futures traders (red line below) have been accumulating like crazy. They have gone from being short ~50,000 contracts at the start of the year to being long over 40,000 contracts this year (approximately $50 billion of S&P accumulated this year), and much of that has been since the decline started on 8/17.
http://www.barchart.com/chart.php?sym=SPY00&style=technical&template=&p=WO&d=M&sd=12%2F31%2F2014&ed=09%2F29%2F2015&size=L&log=0&t=BAR&v=0&g=1&evnt=1&late=1&o1=&o2=&o3=&sh=100&indicators=COTLC%2813369344%2C26112%2C153%29&chartindicator_2_code=COTLC&chartindicator_2_param_0=13369344&chartindicator_2_param_1=26112&chartindicator_2_param_2=153&addindicator=&submitted=1&fpage=&txtDate=09%2F29%2F2015#jumpWhat I see here is a lot of accumulation of stock by smart money, and technical indicators like daily relative strength and rate of change thus far confirming a momentum bottom. You also have weekly EMAs that have crossed, and will remain crossed until the market closes (or fails to do so) above the longer moving averages that have crossed (i.e., the 40 week EMA for a 20-40 week cross). This, I think, is the next market move (to the 2000-2050 range for the S&P), and it is not until you see the market get to this range where you see whether you have a correction or a bear market (in a bear market, the longer moving average forms resistance and turns the market back down, and this testing may take 10-20 weeks from the initial drop in August).
I'm looking to go on a buying spree soon with the profits from being short a whole bunch of commodities since July...as soon as the really is some positive RSI divergence.
coach d,
I think the institutional traders will definitely try to push the market higher. They played the same game last month. My bet is it will end with lower highs and lower lows. Many areas of the market have broken important trends. I certainly do not see a large volume of retail sellers as you do. Most advisors I know are like agip undeterred Bulls. I find myself alone and on an island. If we hit 2000 I will load up again on LABD.
Igy
Well, there's a fellow who lives on the same kind of island I'm on named Carl Icahn, and that's somebody I don't think I'd dismiss so readily:
http://www.cnbc.com/2015/09/27/-of-potential-looming-catastrophe.html
http://www.marketwatch.com/story/icahn-sees-catastrophe-ahead-amid-zero-rates-junk-bonds-2015-09-29
Like Carl, I'm short a bunch of stuff (industrial commodities) and long a bunch of stuff (stocks, S&P). Also like Carl, I'm concerned that the real bubble is (going to be) in bonds, particularly high yield, and also ETFs that a lot of hot money is flowing into/out of almost daily.
Right now, I see buying close to the correction bottom at 1867 to be relatively low risk, because you will know if you are wrong (momentum goes up on the negative side), then once the S&P gets into the 2000-2050 range, either the EMA resistance at the top of the decline gets taken out (like 2011) or it doesn't (like 2008). And whichever why the market wants to go, you go with it. If you're a trend follower, you don't have to make predictions and live with them--you just play the percentages.
coach d,
I got it and I buy what you are saying. I have a view that we head lower so I am weighted in that direction more than you, but I am open to the fact that if I am wrong I will reduce those shorts. Recently I took profits on about a fifth of my shorts realizing we may bounce.
I enjoyed the Icahn piece.
Igy
Igy, I'm curious as to what actions you are currently recommending to your clients, or taking on their behalf. Care to share?
Big Dog,
Advice to any investor would be driven by personal risk preferences and time horizon. From a generally point of view, lower exposure to equities, lower exposure to low quality bonds, neutral alternative investments, neutral high quality intermediate bonds, higher allocation to high quality short term bonds and cash. In summary, a shift towards capital preservation and a reduction of risk for both stocks and bonds.
Igy
Hear, hear.
Igy, I'm on the same island, and may have been here a bit longer than you.
Reduction in risk = reduction in return = seek alternative investments
interesting stuff on moneyflows from coach d
so the US is down 6.0% for the year, including dividends. With three months to go.
Most likely we'll have a down year, but it's not a lock - the market fell 9% this quarter - it could rise 6% next.
We haven't had new lows in the market for 37 days, which is mildly substantial but we came close just a few days ago.
I am attracted to the idea that sovereign funds have been panic selling to fill holes in budgets created by low oil prices - and that triggers hedge funds to panic sell because they could go out of business if they lose money in a year.
that would explain the relentless waves of selling. And I'd call that bullish since it suggests a temporary downturn rather than a fundamental problem.
But that's just a hope - I have no idea.