Talking Stocks 2.0

[Duende01]

Originally Posted by EEpro

Take look at the volume of trades for SPY. He's likely just referring to the times where there is the most market action / trades taking place and you can get ahead of the trend if you guess the direction correctly. You can also be wrong and lose in which case you have to average down to break even later in the trading session.

There you go... And thank you for the gtaphic illustration.

For me, It helps a lot more if I buy in small increments instead of buying a large chunck in one transaction. If the price goes way below what I paid for in the morning, I then DCA my way back to the lowest average in the afternoon. If not, I wait until the next opportunity becomes available again to enter at the price I am willing to pay. I am retired so I have all day to be looking and researching the market.

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[dimag333]

Thanks for being so candid everyone with the advice! I was wondering if montley fool was just some bs website but it sounds like there is some good info there.

Since I’m dealing with limited money here (again this is first time dabbling, basically using my watch money) I was thinkng it would be good to hold onto some cash for the end of the 15 day guidelines. Might be a good time to buy if the gov decides to extend them

steve

[Letsgodiving]

Originally Posted by Duende01

I've read it in multiple locations, investopedia, motley fools, and the bogleheads forum comes to mind. It has work for me, especially when the futures are substantially down the evening prior and into the morning prior to market opening.

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Interesting, I've been a member of bogleheads for 10 years and have never heard of that. So you are saying bogleheads recommend momentum trading?

[Letsgodiving]

Originally Posted by EEpro

Take look at the volume of trades for SPY. He's likely just referring to the times where there is the most market action / trades taking place and you can get ahead of the trend if you guess the direction correctly. You can also be wrong and lose in which case you have to average down to break even later in the trading session.

Sounds like a sound strategy.

[EEpro]

Originally Posted by Letsgodiving

Sounds like a sound strategy.

It's not my strategy so I'm not going to defend a straw man argument. Move along.

[Uggi]

Originally Posted by EEpro

It's not my strategy so I'm not going to defend a straw man argument. Move along.

[Letsgodiving]

The Italian stock market lost 41% from the high to the low on March 12th and has been moving up somewhat since the low. Not sure if anything can be extrapolated from this to other world markets but it shows things don't have to turn the corner on the virus for markets to level off and begin moving up. Although, I understand the Italians banned short selling at some point so that may account for some of it. Markets are forward looking so that is also part of the story. This is not to say it won't go down from here but I found it an interesting data point.

https://www.borsaitaliana.it/borsa/i...TSEMIB&lang=en

[Duende01]

Originally Posted by Letsgodiving

Interesting, I've been a member of bogleheads for 10 years and have never heard of that. So you are saying bogleheads recommend momentum trading?

I never said boglehead recommended, if you read my statement closely it says, "I read it in multiple locations..." Just like you are reading stuff here that might not reflect the views or practices of the forum owners/admin, or even other members, you might read stuff anywhere where the same applies. You do you and I'll continue to do me and we'll continue to be just fine!

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[Doc Savage]

Originally Posted by Letsgodiving

The Italian stock market lost 41% from the high to the low on March 12th and has been moving up somewhat since the low. Not sure if anything can be extrapolated from this to other world markets but it shows things don't have to turn the corner on the virus for markets to level off and begin moving up. Although, I understand the Italians banned short selling at some point so that may account for some of it. Markets are forward looking so that is also part of the story. This is not to say it won't go down from here but I found it an interesting data point.

https://www.borsaitaliana.it/borsa/i...TSEMIB&lang=en

I think the only thing you can take from this is that banning short selling creates an artificial floor on any stock market. Some may like it in the short term (no pun intended), but it doesn't give anyone an accurate picture of market sentiment.

[SMD]

Originally Posted by Doc Savage

I think the only thing you can take from this is that banning short selling creates an artificial floor on any stock market. Some may like it in the short term (no pun intended), but it doesn't give anyone an accurate picture of market sentiment.

Never understood the hate for short selling.

[cornerstore]

When PE ratios get closer to the 13’s, conceivably even lower as opposed to current PE levels of 19’s, ( Dow 12k a 30% Dow drop from these current levels) things should stabilize. However Dow 7500 is a real possibility from a technical and support stand point with a triple bottom already in place. PE ratios will jump higher before stock prices as weak stocks will get washed out and other companies return to profitability. Big problem on historical modelling is the indexes compositions have been so fundamentally altered from a 25 year historical perspective. Stocks are still expensive for non US dollar holders, as currencies drop so does buying power and considering all the margin calls rolling in Dow 7500 could come sooner than later.

[EEpro]

Futures limit down (-5%) if anyone missed that.

[superdog]

Originally Posted by EEpro

Futures limit down (-5%) if anyone missed that.

Sadly I didn’t miss it.

I’m starting to think it’s nearly buying time.

[Bearxj86]

Originally Posted by EEpro

Futures limit down (-5%) if anyone missed that.

I saw that. We should assume this level of volatility for the next month.

[Tha Baron]

Originally Posted by enjoythemusic

Please explain why the Fed 'needed' to inject / promise trillions in just the past week or so to buy, basically, nearly everything they can mop up global bank's assets. Is the Fed pricing mark-to-market or mark-to-fantasy when they buy these items that may default soon? Have you done a forensic on the bank's balance sheets?

Also, how are these banks tested for a mere 15% loss as this rolls into next month of unemployment, then load defaults and jingle mail, as companies go under too... and then....

JMHO YMMV

Google “shadow banking leverage”... US banks aren’t the problem here, the leverage elsewhere in the system is the issue. I can confirm that bank capital and asset quality is much much better than it was 2008.

You cannot insulate from this kind of shock...

[Tha Baron]

Originally Posted by cornerstore

When PE ratios get closer to the 13’s, conceivably even lower as opposed to current PE levels of 19’s, ( Dow 12k a 30% Dow drop from these current levels) things should stabilize. However Dow 7500 is a real possibility from a technical and support stand point with a triple bottom already in place. PE ratios will jump higher before stock prices as weak stocks will get washed out and other companies return to profitability. Big problem on historical modelling is the indexes compositions have been so fundamentally altered from a 25 year historical perspective. Stocks are still expensive for non US dollar holders, as currencies drop so does buying power and considering all the margin calls rolling in Dow 7500 could come sooner than later.

Do you have an idea what earnings will be for the S&P 500 for the remainder of the year?? Let me know when you find out.

[Kowaco]

Originally Posted by EEpro

Futures limit down (-5%) if anyone missed that.

I had some buys in for tomorrow but I cancelled because looks like we’re opening below my limit price. I have been making small purchases on the way down. A while back I predicted 15000 for the Dow, so I’m going to stick with that. I don’t think this is the end of the world.

I’m guessing pandemic preparation will be a major political topic and I’m guessing we may see something like the TSA formed sort of a pandemic police and a national stockpile of TP,masks and ventilators.


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[Doc Savage]

Originally Posted by EEpro

Futures limit down (-5%) if anyone missed that.

The Senate CV bill didn't pass today. If they resolve something tonight, we may see futures go green prior to open.

Originally Posted by bearxj86

I saw that. We should assume this level of volatility for the next month.

Agreed. It's going to be bumpy for a while.

[cornerstore]

Originally Posted by Tha Baron

Do you have an idea what earnings will be for the S&P 500 for the remainder of the year?? Let me know when you find out.

Well factor in self quarantines, no appetite for consumer goods, lay-off costs, negative earnings going forward for many companies coul$ be the short term norm for some time. Hence Dow 7500- S&P 1400 are both doable and still stay within historical PE bands and maintain the long term market up trend. The market was bloated prior to 2016 and all the manipulation since has been trimmed off, now it’s the fundamentals driving prices not stock buy backs to boost indexes. The next excess to be trimmed off is the 2008- 16 run up. Earnings could stabilize in one week or 18 weeks or never return to 2019 levels for decades. That’s why in my opinion technical support levels are now more relevant and come into play, not forward looking priced for perfection, pie in the sky goldilocks valuations. I suspect those tax breaks that juiced up valuations will be unwound in the near future to support rebuilding the economy. One caveat: a vaccine announcement would change sentiment and markets could recover in short order.

[beshannon]

Futures off limit down, waiting for more news about stimulus

[m j b]

It seems like all of the news this weekend has been bad, more confirmed cases, more states going into lockdown, our typically incompetent Congress unable to pass a bill, and if anyone else watched 60 Minutes last night, we can see that work on a vaccine is well in progress from multiple fronts, but it won't happen soon. And there does not seem to be a cure on its way, not that we've developed one for the regular flu or the common cold.

So economic flux will likely continue for a while. However, as we all know, the market is forward-looking and typically optimistic.

[c41006]

Looks like it’s gonna be another rough one today

[bryan13]

Unlimited QE. Fed balance sheet already sitting at an all time high. How do we ever get out of this mess... or do we one day just fall off a cliff twice the size we already fell off?

[beshannon]

Originally Posted by bryan13

Unlimited QE. Fed balance sheet already sitting at an all time high. How do we ever get out of this mess... or do we one day just fall off a cliff twice the size we already fell off?

Exactly

[interestedwatcher]

Originally Posted by bryan13

Unlimited QE. Fed balance sheet already sitting at an all time high. How do we ever get out of this mess... or do we one day just fall off a cliff twice the size we already fell off?

Money printer goes BRR

https://brrr.money/

[beshannon]

Fed doing unlimited QE has the futures up 313 for the moment.

The unknowns for the markets are still large but I believe that buyers are looking for stocks that have been unfairly punished that will return to business when the situation gets better.

I do not think anyone is calling a bottom but we are closer to the bottom with these types of actions taking place. I expect people to sell this rally, it will depend on how many buyers are willing to step up at these levels.

A good read from a technical point of view

To sum up, we would continue watching the 50-day Bollinger Band in the SPX as suggested previously, while keeping an eye on sentiment indicators including AAII and TRIN index for signs of a capitulation low to nibble on tactical long positions.

https://seekingalpha.com/article/433...or-s-and-p-500

[interestedwatcher]

Originally Posted by beshannon

Fed doing unlimited QE has the futures up 313 for the moment.

The unknowns for the markets are still large but I believe that buyers are looking for stocks that have been unfairly punished that will return to business when the situation gets better.

I do not think anyone is calling a bottom but we are closer to the bottom with these types of actions taking place. I expect people to sell this rally, it will depend on how many buyers are willing to step up at these levels

How long did the trillion odd dollar injection last last week, an hour?

[beshannon]

Originally Posted by interestedwatcher

How long did the trillion odd dollar injection last last week, an hour?

Yes? Not sure what your point is. The market wants more and will continue to move accordingly.

[interestedwatcher]

Originally Posted by beshannon

Yes? Not sure what your point is. The market wants more and will continue to move accordingly.

My point is - you can't print your way out of this situation, at best you are writing a cheque to be cashed in the near future, for double the value of the crash we should be having here.

To be fair though, when we are playing against the dirty tactics of some other nations and their currency manipulations, I guess its par for the course.

[beshannon]

Originally Posted by interestedwatcher

My point is - you can't print your way out of this situation, at best you are writing a cheque to be cashed in the near future, for double the value of the crash we should be having here.

Exactly

What is the alternative?