Sounds like we are at the irrational stage of selling, which normally means the bottom.
OT: Stock and Investment Thread
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Always possible it could lead to a capitulation eventually, don't know if we're there yet.
You know something else that I wonder about that I don't hear discussed much. I don't know that they will but what if Russia moves into Ukraine in any fashion. How much would that affect the market and for how long? I'm sure energy could rally even more at least in the short term.
My rule is no more than quadruple down. LOL. That was just the double down. I’m close to triple down on SOFI.That's as spec'y as you can get!
On my screen of stocks, Consumer Staples is the one with the most green.
I'm amazed when investors who have large gains don't take some chips off the table over time. Some get so enthralled with particular stocks that they keep buying even when prudence dictates diversifying.
Besides, why are institutions and pros mindlessly selling via algorithms at such losses? Very irrational.
Russia and Ukraine should be irrelevant to the stock market. Does anyone think that a minor conflict will impact AAPL earnings? LOL.
Does anyone think the market will rally a little once the wash sale deadline passes on January 31st?
In my case I sold some stock at a loss at the end of December, so I have to wait until January 31st to buy back that same stock, so I don’t forfeit my tax savings from the loss.
In my case I sold some stock at a loss at the end of December, so I have to wait until January 31st to buy back that same stock, so I don’t forfeit my tax savings from the loss.
It doesn't have to be related to Apple or any stock specifically. If people get scared everything gets sold regardless of how related it is or not.
Algorithms control a large part of the market. Just my observation but I think moves happen much faster than they used to years ago and that's because of the ubiquity of algorithms IMO.
MSFT on the verge of touching its 200DMA. Last time it did that (broke it for a bit then) was at the start of the pandemic. It's 16% off the highs.
I held off on buying MSFT today, wasn't that much lower than my CB. Perhaps on Monday I can add to my pile!
Sold half at 20 and the other half at 24. Started to buy back at 16.8 and 14.3. Triple down order is at 11.75.
My only regret was letting my GME 200 put option expired. Should’ve exercised but was concerned about a crypto/NFT play.
ETA. I know nothing about SOFI. Someone on this board said to buy it below 15 and I did. Paid off at 20 and 24. No idea why I got back in
ETA. I know nothing about SOFI. Someone on this board said to buy it below 15 and I did. Paid off at 20 and 24. No idea why I got back in
From my perspective, it’s not so much irrational selling. It’s more about de-leveraging risk in the face of rising rates and the end of Fed/Gov’t intervention like QE. Although I suspect the retail investors that decided to play the stock market casino during COVID are getting washed out. One of my biggest fears is the market will finally find a bottom and then something like a crypto crash or El Salvador default will lead to a deeper correction.
FYI - check the data. Stock market normally goes up with raising rates not down.
Crypto will have no meaningful impact on the broader market.
Raised my cash from 65% to 75% today. I expect further erosion next week and buying begins again.
Not entirely true - that’s only if accompanied by faster economic and earnings growth. Which remains to be seen at this point as earnings have not impressed so far. Otherwise, everything I’ve read indicates that rising rates typically do result in lower stock market returns. But we are dealing with a more complex market due to COVID/Gov’t stimulation and QE.
It was only a matter of time. As soon as I heard the El Salvador president was buying BTC for El Salvador on his phone I knew trouble was brewing.
I’m surprised CNBC doesn’t talk about El Salvador and it’s BTC folly. Interesting stuff:
Humbly, I don’t think this is a bottom.
For the first time in history we have 5 bubbles hitting us at once. Equities, Real Estate, Bonds, Commodities, and Crypto. Now maybe you can argue one or two or even 3 are overblown, but not all 5.
Combine that with rising rates, terrible (real) job numbers, supply chain nightmares, and historical inflation — and we have a perfect storm brewing.
Inflation’s kept the boat alive on the choppy seas, but only in appearance. That’s what happens when you print 40% of the total money supply in such a short time.
And even the bluest diehards are losing faith in the captain at the helm.
Thankfully, our society has a psychological imprint of the market always going up over time, that we’re conditioned to buy dips and we’re surviving. But in this one guy’s opinion, it feels like a Jenga Stack.
I don’t know what that one final piece will be. Could be a geopolitical event (Russia/Ukraine, El Salvador, CCP incursion, another variant) or one of the big FANG players taking a huge hit, who knows. Netflix in a vacuum didn’t seem like it, but seeing Shopify & Upstart drop 15% today looked a bit more like a trend than a 1-off.
I want T2K to be right. My portfolio certainly does, and I hate playing shorts. We’re already lost a ton of value (when you factor in where we could be with inflation). But I think the contrarian perspective is important to present.
At the end of the day, he’s also right that there aren’t many other places to put money right now — everything’s a bubble. So solid companies still may be the best way to play it. Like others have mentioned, I’ve also been focused on consumer goods, defense sector, and value buys. I also like silver & gold, but there are issues there too. Any other off-the-radar investment vehicles you looking at?
Point being I think this is new territory, where past studies of corrections/crashes may not apply. And having a forum like this where we really challenge each other is fantastic, because it can/has helped prepare for whatever is to come.
If I had to guess… I think a crypto crash will be what tanks the market. But in time, it’ll also lead all that dead money (particularly from whales) back into stocks. We’ll have to pay a nasty price for inflation, but it’ll also hopefully insulate our buying power as long as we stay in strong ones. Student loan crisis is a huge problem too, and may contribute a blow to the Housing Bubble — but right now we’re just kicking the can.
If we had better leadership, I’d have more faith. But so far our only solutions to 5 bubbles has been to make it worse by incomprehensible policy decisions or… to push giant stim packages that only buys you time, but makes the problem worse.
In the end, nothing would make me happier than to see the SPY keep going up these next few months and year, but the headwinds are strong (even after the last few bear months) and perhaps most troubling, they’re coming from many directions all at once…
For the first time in history we have 5 bubbles hitting us at once. Equities, Real Estate, Bonds, Commodities, and Crypto. Now maybe you can argue one or two or even 3 are overblown, but not all 5.
Combine that with rising rates, terrible (real) job numbers, supply chain nightmares, and historical inflation — and we have a perfect storm brewing.
Inflation’s kept the boat alive on the choppy seas, but only in appearance. That’s what happens when you print 40% of the total money supply in such a short time.
And even the bluest diehards are losing faith in the captain at the helm.
Thankfully, our society has a psychological imprint of the market always going up over time, that we’re conditioned to buy dips and we’re surviving. But in this one guy’s opinion, it feels like a Jenga Stack.
I don’t know what that one final piece will be. Could be a geopolitical event (Russia/Ukraine, El Salvador, CCP incursion, another variant) or one of the big FANG players taking a huge hit, who knows. Netflix in a vacuum didn’t seem like it, but seeing Shopify & Upstart drop 15% today looked a bit more like a trend than a 1-off.
I want T2K to be right. My portfolio certainly does, and I hate playing shorts. We’re already lost a ton of value (when you factor in where we could be with inflation). But I think the contrarian perspective is important to present.
At the end of the day, he’s also right that there aren’t many other places to put money right now — everything’s a bubble. So solid companies still may be the best way to play it. Like others have mentioned, I’ve also been focused on consumer goods, defense sector, and value buys. I also like silver & gold, but there are issues there too. Any other off-the-radar investment vehicles you looking at?
Point being I think this is new territory, where past studies of corrections/crashes may not apply. And having a forum like this where we really challenge each other is fantastic, because it can/has helped prepare for whatever is to come.
If I had to guess… I think a crypto crash will be what tanks the market. But in time, it’ll also lead all that dead money (particularly from whales) back into stocks. We’ll have to pay a nasty price for inflation, but it’ll also hopefully insulate our buying power as long as we stay in strong ones. Student loan crisis is a huge problem too, and may contribute a blow to the Housing Bubble — but right now we’re just kicking the can.
If we had better leadership, I’d have more faith. But so far our only solutions to 5 bubbles has been to make it worse by incomprehensible policy decisions or… to push giant stim packages that only buys you time, but makes the problem worse.
In the end, nothing would make me happier than to see the SPY keep going up these next few months and year, but the headwinds are strong (even after the last few bear months) and perhaps most troubling, they’re coming from many directions all at once…
From a geopolitical standpoint, the likelihood of Russia pushing further into Ukraine is extremely low. This whole charade is about showing the west Russia has an agile military capable of quick reactions to threats, not actually invading Ukraine (outside of the gains they took in 2014).
For argument's sake, if they did make a move, it would like be to set up a 25 kilometer buffer zone along the eastern border of Ukraine (similar to Transnistria) with a stretch goal of linking the Donbass breakaway regions and Crimea. The entire conflict would last less than a month, more likely less than 2 weeks.
In terms of markets, you would probably see a quick spike in oil to over 100 bucks, then settling once hostilities wind down. Russia markets may tank, but they are so intrinsically tied to oil the drop wouldn’t be substantial. Western markets wouldn’t be affected by more than 3%.
Since I brought the stocks when I thought the stock had hit their low, the loss wasn’t that great and sold before the market open. Remember, I buy when they are down 10-15% already. Only a change 10% of assets. I expect to buy when I see the market moving up but still expect further decline, especially this Monday, might be capitulation.
Besides, why are institutions and pros mindlessly selling via algorithms at such losses? Very irrational.
They expect the market to go lower and buy them back at lower prices. From past experiences the algorithms expect further losses.
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This afternoon may have been the capitulation since there were signs of irrational behavior. Bought more AMZN, FB, NDVA, and ENPH today. Still plenty of cash for next week, but very happy with my CBs. I originally started with 13-14 stocks, but quickly decided to consolidate to 6-8 of my top choice.
When things are going down, people tend to over analyze and over think. We agree that most money has nowhere else to go. All this market needs is for inflation to inflect down sooner than expected and KABOOM. The party gets going again. Starting in March (Feb data) inflation will start dropping due to the base effect and COVID easing up (and knocking out employees). The market is baking in the worst possible scenario already. It has already oversold and is acting irrational. Raise rates 4 times this year and guess what? It's still at a super historic low of 1%'ish.
Any good news and the market will pop. Just can't panic and miss out on the rally which when it happens, it happens in a blink of an eye. This is why so many people missed out on the March/April 2020 rebound. And you definitely don't want to get caught in short positions when this happens. Yikes!
The next month or so may blow, but ATHs are coming and sooner than most expect. That's my story and I'm sticking to it! LOL.
Also, the crypto market is way to small to dent the real markets (and it's already down almost 50%).
Before I expected these stocks to go up before earnings, but not the way the market reacting. There isn’t enough pain yet for capitulation to happen. AAPL and MSFT hasn’t fallen yet far enough.
Why would the 2 most successful companies in the history of mankind fall for no reason? AAPL has more cash than most developed nations and MSFT is pretty much a value stock at these prices. Their modest drops are already irrational.
That‘s what happens with capitulation, all stocks fall illogically. FB is now 21 PE which doesn’t make sense when other Stocks with barely any growth are 24 PE.
They might fall because seller have to meet their margin call. I did sell some AAPL and MSFT, not all, today because the loss was small compare to some of my other stocks.
Or FB is going to the moon with those fundamentals and those other stocks are well priced! The glass is half full scenario.
Earnings will be important next week, but Powell speaking on Wednesday is the big show. Let's see what happens.
I believe all the stocks I have will go higher in the next 3-6 months but shorter term will still go lower and I’ll be able to buy at lower levels. Most investors don’t try to buy a fallen knive which I did last week and you’re doing this week. To be safe, they wait for the market to start turning up before they start they buying.Or FB is going to the moon with those fundamentals and those other stocks are well priced! The glass is half full scenario.
Earnings will be important next week, but Powell speaking on Wednesday is the big show. Let's see what happens.
We agree on that. And honestly, I have learned a bit from the bears about being patient and going more slowly on buying the dip. We already deposited a bunch into our brokerage account and backdoor Roths, but it's all sitting in cash still. Also, those 2 CDs matured and will be invested probably next week (100k each). Definitely beats putting it all in 7-10 days ago!
When things are going down, people tend to over analyze and over think. We agree that most money has nowhere else to go. All this market needs is for inflation to inflect down sooner than expected and KABOOM. The party gets going again. Starting in March (Feb data) inflation will start dropping due to the base effect and COVID easing up (and knocking out employees). The market is baking in the worst possible scenario already. It has already oversold and is acting irrational. Raise rates 4 times this year and guess what? It's still at a super historic low of 1%'ish.
Any good news and the market will pop. Just can't panic and miss out on the rally which when it happens, it happens in a blink of an eye. This is why so many people missed out on the March/April 2020 rebound. And you definitely don't want to get caught in short positions when this happens. Yikes!
The next month or so may blow, but ATHs are coming and sooner than most expect. That's my story and I'm sticking to it! LOL.
Also, the crypto market is way to small to dent the real markets (and it's already down almost 50%).
Markets have capitulated, but may still go down the next month or so. Two contradictory statements within 12 minutes of each other. Nicely done, my friend.
Capitulation will likely occur on a day when you wake up in the morning and the futures are down ~4-6% and then when the markets open, there will be an even more rapid sell off for a few hours and then there will be a turnaround and the market will be up much higher at the end of the day. We have not seen that yet. We have seen a lot of selling on days the market starts out higher. On day of capitulation, serious traders will come in and buy the dips hinting that the downturn is near the end.
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Sorry, your post doesn't make any sense. What is your confusion? Happy to help tomorrow.
I am not surprised that you don't understand the post. Please read up on market capitulation and hammer candlestick pattern formation. There may be a quiz tomorrow.
Also read an article where backwardation of the VIX futures with a roll yield above 1% (not sure where that is now) has happened 4 times since 2005. Looking back I'd say a shorter or longer term bottom came in around a month to 4 months out from when the yield went above 1%.
Fast Money traders have some bearishness still. Talk of pre-pandemic levels for some stocks. Carter Worth also with regards to some big tech like Google are looking like they're going to roll over. Bias to the downside. Not many catalysts for upside off earnings but the slightest hint of negativity in the earnings will get outsized negative reaction.
I kind of agree with those sentiments and have limit orders for some the big names at lower prices, some times way lower prices. Similar to what I mentioned above with AMZN. I'm willing to nibble on a big solid name that's down 20% plus off its highs but can envision larger drops in the future.
Part of me though wonders if I should rethink that a bit with regards to those highs for stocks. Were they somewhat manufactured with rates and stimulus at crazy levels and is being 20% off the highs really enough, where it might be in "normal" times. They're good companies with good earnings and good futures but they were juiced like the rest of the market...but just how much? Over the long run, should be fine and I'm nibbling at points I feel comfortable owning it over a longer term.
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This morning, I placed several GTC orders at extremely low prices base on the technical charts for my stock picks. If the market crashes, I buy them at super discount prices or market starts turning around, nothing happens. I once picked up a stock when the market crashed that 1 day If some of you remember.