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The Economy and The Markets (where are we, where are we heading, and what does it mean for the QC...)

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12 minutes ago, gman430 said:

Trump wants to reopen the economy by Easter: https://www.cnbc.com/2020/03/24/coronavirus-response-trump-wants-to-reopen-us-economy-by-easter.html Excellent. :) Love watching CNN throw a temper tantrum over this. Lol. 

I'm not celebrating. My parents are extremely high risk. If they get it they will die. Pathetic people are putting dollars on lives now.

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12 minutes ago, gman430 said:

That's a difficult thing to predict. If new cases were to peak sometime this week, I can see him getting away with "re-opening by Easter". That is a BIG "if".

On the other hand there is a lot of people that are actually suffering from the consequences already, the longer this drags on the bigger the after shocks will last, so I can see why he is eager to re-open, but wishful thinking is not going to make the virus disappear

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6 minutes ago, urbanlover568 said:

I'm not celebrating. My parents are extremely high risk. If they get it they will die. Pathetic people are putting dollars on lives now.

It was definitely sarcasm on my part. That Lt Governor from Texas is indeed pathetic. 

Edited by gman430
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Just now, Scribe said:

That's a difficult thing to predict. If new cases were to peak sometime this week, I can see him getting away with "re-opening by Easter". That is a BIG "if".

On the other hand there is a lot of people that are actually suffering from the consequences already, the longer this drags on the bigger the after shocks will last, so I can see why he is eager to re-open, but wishful thinking is not going to make the virus disappear

Singapore went on lockdown again . It's a stupid move to reopen again and the decision will kill people.

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4 minutes ago, urbanlover568 said:

I'm not celebrating. My parents are extremely high risk. If they get it they will die. Pathetic people are putting dollars on lives now.

Same here.  Some of the comments are sick.

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3 hours ago, urbanlover568 said:

Lol, that makes me want to sell now. J/k

:D

A2

2 hours ago, tozmervo said:

wait a minute, with everything else you've already said THIS is what would make you very concerned??

Lol, yes. Simply because that means the entire market is broken technically. But I totally understand your comment. Ha!

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45 minutes ago, cltheel.sdl said:

@A2., where do you see markets heading tomorrow?  Big drop after a big gain day?  Or more positive growth?

Two ways this plays out, I’m leaning towards the first:

1) Markets bounce in light of the news flow, and the technically oversold condition of the market. Could be up possibly another 10% or so from here. Maybe more. Then we roll over to test the lows from the crash (just under 18,000 on the DOW). That’s when the real struggle will happen, as many will attempt to buy the re-test.

2) more bad news overwhelms the markets push today and it begins to roll over immediately (to me this is less likely) 

Those are short term directional choices the market will make. That said, I’ve said it before and I will say it again, I BELIEVED THE MARKET WOULD BOUNCE FROM THE INITIAL CRASH, BUT I PERSONALLY BELIEVE THAT THE LOWS ARE NOT IN. 
 

This is a Bear market, and they don’t typically resolve themselves in a few weeks. The AVERAGE Bear market lasts between 18-24 months. And for what it’s worth, this ain’t your average Bear market. 
 

just my $.02

A2

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Thanks @A2..  I'm relatively new to this game.  What are your thoughts on a "buy short when Dow futures are down, buy long when Dow futures are up" approach and effectively become an active day trader?  

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58 minutes ago, cltheel.sdl said:

Thanks @A2..  I'm relatively new to this game.  What are your thoughts on a "buy short when Dow futures are down, buy long when Dow futures are up" approach and effectively become an active day trader?  

I’m always nervous to play futures short or long. Too much whipsaw action.

 The one piece of advise a wise man once said, “the trend is your friend”. When you try to trade, it’s very easy to lose. Place positions based on the trending markets. Right now that is down, so you’d sell rallies. In an upward moving market (above the 200 MA), you’d buy dips. Just keep it simple. :-)

 

 

A2

Edited by A2.

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On 3/24/2020 at 3:25 PM, A2. said:

I’m always nervous to play futures short or long. Too much whipsaw action.

 The one piece of advise a wise man once said, “the trend is your friend”. When you try to trade, it’s very easy to lose. Place positions based on the trending markets. Right now that is down, so you’d sell rallies. In an upward moving market (above the 200 MA), you’d buy dips. Just keep it simple. :-)

 

 

A2

 

Hello A2,

What's your assessment on the surge the last couple days, in particular the airlines stocks(Spirit, AA, Delta etc.)?  I am guessing it is all to do with the stimulus package.  I can't imagine them going back to levels from 4-5 months ago anytime soon.  Do you think this is a temporary surge or is it going to be sustainable, steady growth back?

 

Thanks!

 

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1 hour ago, NikolaTesla said:

 

Hello A2,

What's your assessment on the surge the last couple days, in particular the airlines stocks(Spirit, AA, Delta etc.)?  I am guessing it is all to do with the stimulus package.  I can't imagine them going back to levels from 4-5 months ago anytime soon.  Do you think this is a temporary surge or is it going to be sustainable, steady growth back?

 

Thanks!

 

Hey NT, check out my posts above. Don’t want to claim that I called the temporary bottom, but I kind of did. Lol

that said, the markets bounce was definitely expected, and it could rally a little more (even from here). However, this bounce will fail and it will NOT get back to where we were in February. Then the next wave down will attempt a retest at 18k on the DOW. I personally believe it might have a smaller second bounce there, luring people in (believing that it’s a successful retest of the lows) only to see it drop lower. 
 The cycle is down, and it will stay down, regardless of how “good” the news is. Even if CV is wiped off the face of the planet, the markets are going lower, MUCH lower. 
 

as for the airlines, would not be shocked to see a bankruptcy by a major player prior to the end of the year. They will also get more government handouts. Personally I believe we will see a semi Nationalization of the industry. 
 

A2

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Quick tip for the board:

We will know the Bear is done growling when everyone stops trying to buy bottoms and everyone (including the talking heads on financial media outlets) don’t want anything to do with stock. 
 

Every bit of the talk is about how many green shoots their are, how much value there is, and don’t worry the FED’s got our back. These are signs that we are not even remotely close to a bottom in the markets. 
 

since I love this board and my virtual pals, I will do my best to let you know when we get to that point. I promise you when we do and I say go “all in” I will be equally mocked as I was when I told many of my Industry buddies to get out.  The bottom line is you will NOT want to buy anything in the markets when it’s actually time to buy. This is a VERY difficult thing to do. I have Behavior Finance designation (not that it matters) and I promise you that markets are as much about behavior as it is balance sheets and charts. 
 

stay safe out there!

 

A2
 

 

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11 minutes ago, cltheel.sdl said:

@A2., where do you think this rally peaks on the DOW?

68% Retrace of the fall is the MAX level on the current rally 

so  quick and dirty math:

top was: ~29500

bottom was ~18,000 
 

take the difference:

11500 point peak to trough fall.

11500  x .682 = ~7800 point bounce

18000 + 7800 = 25800 DOW

That is the absolute MAX! 
 

personally I don’t believe it will make it there, I would bank on 23700ish

thats a 50% retrace.

caveat to all of this. The Fed is printing like crazy. More than anything the world has ever seen. The above could actually be negated and the markets COULD soar to all time highs and beyond! BUT! If that happens it means the dollar has collapsed and we are setting up for a nasty hyperinflationary depression where a loaf of bread costs $65 and a tank of gas is $200.

hope this helps gang!

A2

 

PS—-If it were me, I would use any rally to sell into strength. I’m a trader and can make swift technical moves, but I do this for a living. Do not try to do that, and be cute about the above levels. This market is extremely volatile and you can get your head handed to you. These are merely point along the path to watch for resistance. I would NOT try and “top tick” the markets and then sell. You’ve been given a gift with this massive bounce, use it to your advantage.

And remember above all that to  create wealth, capital preservation is Key!

A2

Edited by A2.

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4 minutes ago, A2. said:

caveat to all of this. The Fed is printing like crazy. More than anything the world has ever seen. The above could actually be negated and the markets COULD soar to all time highs and beyond! BUT! If that happens it means the dollar has collapsed and we are setting up for a nasty hyperinflationary depression where a loaf of bread costs $65 and a tank of gas is $200.

hope this helps gang!

A2

Does it make a difference if most of the corporate support is in the form of loans, ala TARP, and the only "new" money is in the form of direct payments to citizens, for many of whom it's bridging gaps in paychecks? 

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7 minutes ago, tozmervo said:

Does it make a difference if most of the corporate support is in the form of loans, ala TARP, and the only "new" money is in the form of direct payments to citizens, for many of whom it's bridging gaps in paychecks? 

No. But it’s an intelligent question tozmervo. 

any way you slice it, there are NO free lunches. Printing money doesn’t solve the problem that was caused by printing money and debt that got us here in the first place.

Ps—-not that it would matter, but I do hate how big corporations are always bailed out by taxpayers. If you make a bad bet and run your company poorly, you should not be allowed to continue. Mr. Market will cleanse those bad investments out of the system and a new more responsible player will fill their spot. There is this myth that we have to bail them out because of jobs. those jobs would soon be available by the new company that took the place of the zombie company that is sucking the tax payers blood! . We have been lied to so much that we just believe we have to do what we are doing now (aka bailouts and turning on the printing presses at full speed).

We need to get back to basic and sound economic principles and remember that we can’t be capitalists in the good times and then socialize the losses when those bets go bad. 
(if I ran for Congress, that would be my slogan! Ha!)
 

A2

Edited by A2.
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5 hours ago, A2. said:

Quick tip for the board:

We will know the Bear is done growling when everyone stops trying to buy bottoms and everyone (including the talking heads on financial media outlets) don’t want anything to do with stock. 
 

Every bit of the talk is about how many green shoots their are, how much value there is, and don’t worry the FED’s got our back. These are signs that we are not even remotely close to a bottom in the markets. 
 

since I love this board and my virtual pals, I will do my best to let you know when we get to that point. I promise you when we do and I say go “all in” I will be equally mocked as I was when I told many of my Industry buddies to get out.  The bottom line is you will NOT want to buy anything in the markets when it’s actually time to buy. This is a VERY difficult thing to do. I have Behavior Finance designation (not that it matters) and I promise you that markets are as much about behavior as it is balance sheets and charts. 
 

stay safe out there!

 

A2
 

 

I appreciate you taking the time to answer all of our questions and provide feedback.  I am taking this time at home to start learning about the stock market.  I was planning to buy into Delta and Spirit last week at their lows, but took a second and told myself not to rush it due to inexperience.  Maybe i messed up  should  have bought in last week and now kicking myself in the ass because of potential profit??  but maybe its for the best to take it slow with my rookie level knowledge.  How much do you charge for trading lesson? :) 

Edited by NikolaTesla

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1 hour ago, A2. said:

Lol, my “tips” here are free and truly just meant to be a guide and not financial advice. I’m not a financial prophet, but just see trends and opportunities when they arise and pass them along to my virtual friends here on UP. If I can save some peeps some bucks, great! If I can help make you some, even better! :-)


 As for buying last week, it was definitely a GREAT swing trade had you placed it, but when we have this kind of volatility it pays to sometimes just sit on your hands. (Especially if you’re just getting started). For what it’s worth, I missed a golden trade set up that would have been a six figure trade this Monday, but I was so busy with work, it simply got away from me. I’m kicking myself now, but I also have to remember that opportunities will come again. In the past I would have made another emotional bet to try and erase my mistake. And believe me, that would have been a bad move. I have to keep my emotions in check (and that’s extremely hard, even for someone who reads charts daily).

 In my view, if we get what I think is coming, ALL of us that manage to get through this crap, will be blessed with so much opportunity to buy things at bargain basement levels. That’s a GREAT THING! 

In the meantime, do these three things (especially while volatility is high and risk abounds these next few weeks and months):

1) pay down debts (This is #1 for a reason!)

2) raise cash (have some dry powder ready)

3) then get a shopping list of quality companies that you would love to own when they have a fire sale. 
 

You will be better for it. In all of that, don’t forget to live life. It’s truly more than money. We as a society have been far too materialistic and this rough patch might just be just what we ALL needed to get back to loving and living! We all need to remember we can’t take any “stuff” with us. Make memories, make friends, go for a walk (keep your 6 foot distance, lol), work on a hobby, read a book, learn a new language, pick up a new skill, take an online class, or just take some pictures and post them on UP. Most of all, smile. Help your fellow man, and try to work on being a better you. We all need this time to evaluate who we want to be. Don’t let money define you. You are more than a number. 
 

 As Mama used to say, “This to shall pass!”

:)

A2

 

Thank you for sharing your perspective.  I really like your viewpoint. I was feeling guilty for not making the move last week, but i believe patience will hopefully reward in the end, more opportunities will come their way.   I started playing a race simulator, called iracing and working on rebuilding my brothers entire back deck, halfway there. I try to do a little cardio every day and stretch since my gym is closed.   My father thought my brother and I to work on cars, projects around the house, etc etc. growing up as refugees in the US.   Hope everyone is else is doing something interesting, new and somewhat exciting!

A2- Do you have any tips for what online brokerage to go with, or just any of the big names?   I am just going to start setting up coffee with A2 on you calendar for weekly mentoring sessions haha.  

Thanks,

Bojan

Edited by NikolaTesla

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12 minutes ago, NikolaTesla said:

Thank you for sharing your perspective.  I really like your viewpoint. I was feeling guilty for not making the move last week, but i believe patience will hopefully reward in the end, more opportunities will come their way.   I started playing a race simulator, called iracing and working on rebuilding my brothers entire back deck, halfway there.  My father thought my brother and I to work on cars, projects around the house, etc etc. growing up as refugees in the US.   Hope everyone is else is doing something interesting, new and somewhat exciting!

A2- Do you have any tips for what online brokerage to go with, or just any of the big names? 

Thanks,

Bojan

That’s awesome NT! It has got to feel good seeing progress on your projects. As for online brokerages, they are all different shades of gray. Just pick one that is large and gives you a good price on your trades. 
 One last tip, if you do start to trade in the near future, don’t use margin. I’ve seen so many get greedy and they blow up their account. 
 I can attest to this, as I did that in 2001 and literally lost 90% of my account in one day on a large short position. 
 Bottom line, margin is debt, and as tempting as it would be to use it, don’t. 
 
PS—-I really envy you, I would love to know how to work on cars. My buddies growing up were truly gifted at tinkering on engines and all things mechanical. God didn’t give me that “gift” and I’ve always admired that skill. I can play a guitar and piano like a maestro, but can barely change my oil without screwing something up. Ha!  One thing I am excited about is learning to grow a raised  bed vegetable garden this year. Truly excited about it. Got my lumber, seeds,  and dirt ready to Rock! I can’t wait to eat something that I grew. How cool is that!? 

A2

Edited by A2.
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3 hours ago, A2. said:

That’s awesome NT! It has got to feel good seeing progress on your projects. As for online brokerages, they are all different shades of gray. Just pick one that is large and gives you a good price on your trades. 
 One last tip, if you do start to trade in the near future, don’t use margin. I’ve seen so many get greedy and they blow up their account. 
 I can attest to this, as I did that in 2001 and literally lost 90% of my account in one day on a large short position. 
 Bottom line, margin is debt, and as tempting as it would be to use it, don’t. 
 
PS—-I really envy you, I would love to know how to work on cars. My buddies growing up were truly gifted at tinkering on engines and all things mechanical. God didn’t give me that “gift” and I’ve always admired that skill. I can play a guitar and piano like a maestro, but can barely change my oil without screwing something up. Ha!  One thing I am excited about is learning to grow a raised  bed vegetable garden this year. Truly excited about it. Got my lumber, seeds,  and dirt ready to Rock! I can’t wait to eat something that I grew. How cool is that!? 

A2

Funny and kinda not so funny story- My engine decided to let go last week while i was driving to Greensboro, looks like 4th cylinder failed at some point in the assembly.  So i am tearing it apart as we speak to prepare for the new "used" engine coming next week.  Brother and dad are helping me.  We are planting tomatoes, cucumbers this year!  The taste is so much better than anything at the store.  My suggestion is to make sure that you create some sort of mesh around the plants so that it stays protected.  We are modifying our bed this year to add essentially a mesh cover over the plants which we can open and close.    Noted on the margin! Wont be setting a margin account.  I need to sign up and go ahead and fun my account while i continue to study and wait out for the next dip back down.   Also if you or anyone ever needs any help with anything car related, feel free to send me a message. Happy to help.

Edited by NikolaTesla
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