OT: Interesting Levels for S&P 500

[Jeffreauxdawg]

With the current pullback, the S&P is flirting with being in correction mode or a 10% decline. It bounced today at a support level that has provided pivots over the last 12 months or so.



But, if that support doesn't hold over the coming weeks, technically speaking we could be heading for a bear market that might take us all the way back to the long term trend that we have been following since 2009-10 as we climbed out of the great recession. Just looking at the macro, it would be fair to say that the excessive growth over the last 18 months are the result of inflation and too much government spending. If those 2 faucets are dialed back, growth and profits have no choice but to slow. Whether or not that triggers a recession along with tariffs is a different argument, but it will definitely affect corporate profits and equities prices.

Zooming out, to a weekly chart, it seems technically if we do start a correction/downtrend in the coming weeks it could head back to the pivot high from early 2022 and meet the old trend line somewhere around the 4600-4700 range over the next 10-12 months.



Not saying that will happen for certain, but it's on the table with gubment spending cuts and trade wars on the horizon, the market loves that gubment debt and cheap Chinese shìt.

 

[John Deaux VII]

I got on OpenAI over the weekend and posed the question -

"What would happen if the United States started a trade war with it's three largest trading partners?"

To my amazement, it replied -

"I don't know, but it looks like you are about to **** around and find out"

 

[grinningmule]

It can plummet every pay day for the next three or four years and I'll be happy

 

[DoggieDaddy13]

I got on OpenAI over the weekend and posed the question -

"What would happen if the United States started a trade war with it's three largest trading partners?"

To my amazement, it replied -

"I don't know, but it looks like you are about to **** around and find out"

You got that SAAI (Smart *** Artificial Intelligence)

 

[GloryDawg]

Buy low.

 

[dorndawg]

When should I get tired of the winning?

 

[Lawdawg86.sixpack]

The last major selloff was August 5th and the index hit just under 5200. There should be a good amount of support around that level. Certainly a good amount of downside risk the next few months. Good time to buy for Roth IRA or 401(K).

 

[The Fatboy]

Signed up for 401k today and I hadn't even seen this post yet

 

[BoDawg.sixpack]

As you can see from the long term chart of the PE ratio of the S&P 500 there's still a long way to go down. I expect it will go much lower. That being said I recently drove through 5 states and I can't remember as much traffic or as many tractor trailers on the road. A good bit of construction too. Stawks may be having a rough time but there's plenty of activity out there. A new generation of investors needs a good entry point and recent highs are not it. Boomers all the way to Gen X have been spoiled by gains in the markets in the last 25 years.

 

[TrueMaroonGrind]

We were moving some money around the last couple of weeks. Got lucky and sold almost 2 weeks ago. We’ll reinvest later this week. Should work out okay for us all by accident.

If it drops further it is what it is. I do wish they were more organized on the layoffs and tariffs. There’s too much news and too much flip flopping making things drag out. They drag this out for months and no doubt we’ll reach recession.

 

[ckDOG]

So...wait a while longer before I go through with a backdoor conversion? Or hold on to that cash because I'll need it when I lose my job after imminent recession. Trying to decide which way I should be winning.

 

[horshack.sixpack]

We were moving some money around the last couple of weeks. Got lucky and sold almost 2 weeks ago. We’ll reinvest later this week. Should work out okay for us all by accident.

If it drops further it is what it is. I do wish they were more organized on the layoffs and tariffs. There’s too much news and too much flip flopping making things drag out. They drag this out for months and no doubt we’ll reach recession.

Cute that you used “more”…

 

[karlchilders.sixpack]

It can plummet every pay day for the next three or four years and I'll be happy

No, you would not be happy. It would affect us all.

 

[horshack.sixpack]

So...wait a while longer before I go through with a backdoor conversion? Or hold on to that cash because I'll need it when I lose my job after imminent recession. Trying to decide which way I should be winning.

Is it too late to ask for a definition of “great”?

 

[John Deaux VII]

I got on OpenAI over the weekend and posed the question -

"What would happen if the United States started a trade war with it's three largest trading partners?"

To my amazement, it replied -

"I don't know, but it looks like you are about to **** around and find out"

I am kidding of course. Everyone from the Nobel Laureate in Economics to the the village idiot knows what would happen.....

Here is what OpenAI says -

A trade war between the U.S. and its three largest trading partners could lead to higher prices for consumers, job losses in specific industries, disruptions in global supply chains, and strained international relations. While some domestic industries might benefit from protectionist policies, the overall economic impact on the U.S. would likely be negative, and global economic instability could follow. The complexities of such a scenario make it a high-risk situation for all involved.

 

[The Cooterpoot]

Trump will back off the tariffs after claiming some sort of victory and fire half his staff eventually if I'm guessing

 

[patdog]

So...wait a while longer before I go through with a backdoor conversion?

Better check with her before you do the backdoor conversion.

 

[MSUDOG24]

Trump will back off the tariffs after claiming some sort of victory and fire half his staff eventually if I'm guessing

Got this from my advisors today and thought it was "funny".

In addition, the unsteady implementation of these policy changes has also posed a unique challenge for markets. The 25% levy on imports from Canada and Mexico have been announced (Feb. 1), delayed (Feb. 3), reimposed (Mar. 3) and then narrowed (Mar. 6) in a little over a month.

 

[patdog]

Trump will back off the tariffs after claiming some sort of victory and fire half his staff eventually if I'm guessing

That’s what I think too. He doesn’t want to actually impose the tariffs. Just use the threat to get concessions.

 

[StuckOnStupid69]

That’s what I think too. He doesn’t want to actually impose the tariffs. Just use the threat to get concessions.

Trump was the one who negotiated the last trade agreement between Canada/Mexico/US - if it’s so bad - was he too dumb to notice when he signed it?

 

[Captain Ron]

Interesting to look at sectors. Consumer staples which you would expect to be hit by tariffs, not showing it.

Chart 2 at least at the moment looks like most things are up with technology (thanks to you know who stock) dragging things down.

 

[OG Goat Holder]

That’s what I think too. He doesn’t want to actually impose the tariffs. Just use the threat to get concessions.

Yeah, and just 17 with everyone's livelihood in the process

 

[Jeffreauxdawg]

Interesting to look at sectors. Consumer staples which you would expect to be hit by tariffs, not showing it.

Chart 2 at least at the moment looks like most things are up with technology (thanks to you know who stock) dragging things down.
View attachment 769930View attachment 769931

Always a good idea to look under the hood at sectors. But generally speaking, consumer staples, utilities, and healthcare will always out perform in a bearish environment. Those are defensive sectors. They have stronger pricing power than others in a recession or tariff environment.

In good times we spend more on travel, buy new cars, and the wife gets new shoes every month. In bad times we don't do that stuff as much, but still use electricity, buy toilet paper, groceries, beer, blood pressure medicine, etc.

 

[dorndawg]

That’s what I think too. He doesn’t want to actually impose the tariffs. Just use the threat to get concessions.

I wonder if other countries ever realize it’s merely a threat?

 

[jethreauxdawg]

I wonder if other countries ever realize it’s merely a threat?

not a chance, the average pack poster is way ahead of most world leaders.

 

[GloryDawg]

Not arguing Tariff are good or bad but apparently, they are beneficial, or no country would have tariff and every country in the world has tariffs and Vat's on US made good. German cars are not as good as they use to be, BMW's stay in the shop and Mercedees do not hold its value like it used to but for one car made in the United sold in Germany eight cars built in Germany are sold in the United State. They have 10% tariff and 9% VAT on all US built cars. Germans want to buy Corvettes, but they are just too damn expensive to buy. I agree that Trump doesn't really want to use tariff but hell **** fire we are living in an unfair trade balance throughout the entire world. We have a 2.5% tariff with no VAT on all cars built in the EU. It's not fair to the United States or its workers. We have a trade deficient with almost every country in the world. That not right. It needs to be fixed. We need them but lets be honest they need our 340 million Americans buy their good more than we need 41 million Canadians buying ours. I think it will end up being not that big of a deal. There are other things coming that will help the economy.

 

[jethreauxdawg]

Not arguing Tariff are good or bad but apparently, they are beneficial, or no country would have tariff and every country in the world has tariffs and Vat's on US made good. German cars are not as good as they use to be, BMW's stay in the shop and Mercedees do not hold its value like it used to but for one car made in the United sold in Germany eight cars built in Germany are sold in the United State. They have 10% tariff and 9% VAT on all US built cars. Germans want to buy Corvettes, but they are just too damn expensive to buy. I agree that Trump doesn't really want to use tariff but hell **** fire we are living in an unfair trade balance throughout the entire world. We have a 2.5% tariff with no VAT on all cars built in the EU. It's not fair to the United States or its workers. We have a trade deficient with almost every country in the world. That not right. It needs to be fixed. We need them but lets be honest they need our 340 million Americans buy their good more than we need 41 million Canadians buying ours. I think it will end up being not that big of a deal. There are other things coming that will help the economy.

If you quit going to the gym for a very long time, would it hurt to go back? Does that mean you shouldn’t go back or is there a chance you are better in the long run for doing something difficult today?

 

[NewTweederEndzoneDance]

I am just a small brain, but if the market has been propped up by excessive government spending and excessive government hiring, wouldn't that be unsustainable in the long run and we'd eventually have a correction no matter what?

 

[jethreauxdawg]

I am just a small brain, but if the market has been propped up by excessive government spending and excessive government hiring, wouldn't that be unsustainable in the long run and we'd eventually have a correction no matter what?

No, just make more government. Print money faster

 

[GloryDawg]

I am just a small brain, but if the market has been propped up by excessive government spending and excessive government hiring, wouldn't that be unsustainable in the long run and we'd eventually have a correction no matter what?

Get ready for a GDP drop, 23 to 30% of our GDP is Government spending. If the Government cuts, it's budget it is possible the GDP will drop by what it cuts. Good for Trump Biden and his White House changed the definition of a recession.

 

[The Cooterpoot]

17 Canada!

 

[aTotal360]

17 Canada!

 

[dorndawg]

. Good for Trump Biden and his White House changed the definition of a recession.

Sounds like we will see the difference in a technical recession and a real one.

 

[GloryDawg]

Sounds like we will see the difference in a technical recession and a real one.

Two consecutive quarters of economic contraction is a recession. We may or may not see a drop. If it drops because of government spending cuts it will help in the long run with inflation. However, Biden had two consecutive drops, and they said that was not a recession anymore. It was just transitional. GDP should not be government spending. It does make you look good.

 

[dorndawg]

We may or may not see a drop. If it drops because of government spending cuts it will help in the long run with inflation.

 

[dorndawg]

However, Biden had two consecutive drops, and they said that was not a recession anymore.

Drops in what? It wasn't GDP:

 

[birdawg]

There's always been a trade war. We just recently decided to participate.

 

[BoDawg.sixpack]

Not arguing Tariff are good or bad but apparently, they are beneficial, or no country would have tariff and every country in the world has tariffs and Vat's on US made good. German cars are not as good as they use to be, BMW's stay in the shop and Mercedees do not hold its value like it used to but for one car made in the United sold in Germany eight cars built in Germany are sold in the United State. They have 10% tariff and 9% VAT on all US built cars. Germans want to buy Corvettes, but they are just too damn expensive to buy. I agree that Trump doesn't really want to use tariff but hell **** fire we are living in an unfair trade balance throughout the entire world. We have a 2.5% tariff with no VAT on all cars built in the EU. It's not fair to the United States or its workers. We have a trade deficient with almost every country in the world. That not right. It needs to be fixed. We need them but lets be honest they need our 340 million Americans buy their good more than we need 41 million Canadians buying ours. I think it will end up being not that big of a deal. There are other things coming that will help the economy.

German cars have been over engineered for years and most of them get dumped after the warranty expires because parts are ridiculously expensive.. I don't know how they became a status symbol. You drive a new BMW off the lot and it loses 15% of its value at the first stop light. Great way to take a financial bath.

 

[mstateglfr]

Not arguing Tariff are good or bad but apparently, they are beneficial, or no country would have tariff and every country in the world has tariffs and Vat's on US made good.

Way to not argue whether they are good or bad.**

German cars are not as good as they use to be, BMW's stay in the shop and Mercedees do not hold its value like it used to but for one car made in the United sold in Germany eight cars built in Germany are sold in the United State. They have 10% tariff and 9% VAT on all US built cars. Germans want to buy Corvettes, but they are just too damn expensive to buy.

You just cited an example of a tariff hurting consumers by reducing choice and/or artificially inflating product cost thru taxation.

I agree that Trump doesn't really want to use tariff but hell **** fire we are living in an unfair trade balance throughout the entire world.

Trump campaigned on increasing tariffs. He was elected and immediately promised large blanket tariffs. He justified some tariffs by saying they are a penalty for issues totally unrelated to trade. He justified other tariffs by either lying about trade numbers or misunderstanding trade numbers.
He very much wants to use tariffs- everything he has done for months and months clearly points to him wanting to use tariffs.

We have a 2.5% tariff with no VAT on all cars built in the EU. It's not fair to the United States or its workers. We have a trade deficient with almost every country in the world. That not right. It needs to be fixed.

Having a trade surplus with another country is not inherently 'good'. Having a trade deficit with another country is not inherently 'bad'.
Example- If we have a trade deficit with a country because we buy a lot of raw material from them, but we then produce product with that raw material and export to other countries for gobs of money(thats an economic term), is the trade deficit with that first country actually bad? Do you really think it needs to be 'fixed'?

Global trade is complicated. Economies are complicated. Blanket tariffs that are promised and based on non-economic reasons as well as misunderstanding of what 'subsidizing' means is not a smart way to address trade deficits. Doing those things just creates confusion and chaos for all involved...which is where we are right now.

We need them but lets be honest they need our 340 million Americans buy their good more than we need 41 million Canadians buying ours. I think it will end up being not that big of a deal. There are other things coming that will help the economy.

If all this chaos, and thats exactly what it is, is intended to just be bluffs and get us to wherever Trump wants us to be in terms of trade, there are a dozen ways to do it that dont involve the chaos, uncertainty, and animosity that he has created.
He was the one who was in charge when current trade was established with Canada and Mexico...if he dislikes the trade imbalance, thats quite literally on him.
Also, remove crude oil and we have a surplus with Canada. Crude oil is refined here and sold for more, so its hardly justifiable to complain about receiving so much of a raw material that then becomes worth a lot more after production.

 

[horshack.sixpack]

Got this from my advisors today and thought it was "funny".

In addition, the unsteady implementation of these policy changes has also posed a unique challenge for markets. The 25% levy on imports from Canada and Mexico have been announced (Feb. 1), delayed (Feb. 3), reimposed (Mar. 3) and then narrowed (Mar. 6) in a little over a month.

The idea that there is a plan is laughable at this point.