How low can we go?

[burritos]

It looks like FutureProofMD is just another person that knows what the best play was/is but they just couldn't help themselves. The biggest fear I would have by doing something like this is it will cause me to make future bad decisions. For the golfers out there, you ever hit your drive into the woods and that makes you think you need to take more chances to try to make up the strokes instead of punching it out? Instead of having a chance to save par or make bogey you end up with a triple bogey. Yeah, that'd be me in the stock market. Once you make a bad decision, the pressure builds to try to make an even better decision to recoup losses.

Right. Now he is in the position to root against the market so that he can be "right." I mean he wants to be right I assume. If he were really confident on this call, he should be shorting the market ala Michael Burry or Bill Ackman.

[Dont_know_mind]

I suppose my question was rhetorical. Just based on history and human behavior/greed(mine including), I think this is a bear market rally. Economy doesn't equal stock market. And rarely is "this time is different". Here's another question, has there ever been a time where the market dropped this low where the recovery didn't include bear market rallies? When those bear market rallies occurred, did the people going through them think they were in recovery mode? Don't get me wrong, I will continue to buy through ups and downs.

It may not be a bear market rally.
It reminds me of Asian financial crisis/LTCM In 1997-8. There were systemic issues, coordinated CB action and then things got much higher as rates stayed low for too long. But in 1997 the fall was around 20% from what I recall. This was deeper and faster and there was much more stimulus. So I’m not sure what you would call it - a bear market or not. I started a thread to discuss it last week.

[Dont_know_mind]

Any thoughts of how the market will react to a Trump re-election vs Biden election? Or does it just matter if there's a second spike? I think the first pass culling of the herd has been significant and a second spike will just be a dead cat bounce at best.

My guess (and I could be completely wrong) is that this could go on until the election. It looks like the towel chucking has started and I wonder how long it will take the rest of the institutional money to get off the sidelines. Perverse as it seems I think the bears will get zapped senseless.

My thinking (could be completely wrong and just a guess) : they have said they will do whatever it takes, so unlikely they will change tack before the election. The Fed knows the market knows this so the Fed may back off before the election to appear not to support the incumbent. No idea what happens after the election. If there is a vaccine, Biden is unhappy with Fed handling then maybe things fall apart earlier. If trump is re-elected maybe things fall under the weight of their own overvaluation after a while.

I guess it doesn’t matter much to me. I managed to pick up some EM, UK and Australian index ETF’s at great valuations and exchange rate and am happy to hold for a while.

It took me about 2 weeks to realise the Fed has gone all in and I thought what the heck am I doing holding this cash. I remember leaning the wrong way after LTCM, and also remembered the move after the ECB and BOJ going nuclear and realised I don’t want to be anywhere on the other side of that for at least 6-12 months. Half the potency of these CB moves is the signalling and everyone who was absolutely caned the last time they went against it piling on. Anyway, that’s my experience and theory which maybe completely wrong. But when it comes to CB “whatever it takes” vs fundamentals over the short/medium term, I just remember getting my ****************** kicked going with fundamentals in the past. So I don’t do that anymore. The severe rebalancing/fomo from CB moves are a relatively uncommon phenomena but just incredible when they happen.

Maybe we get a new high, double top, further continuation to new lows, bubble phase, who knows. Be positioned so you are ok whatever happens.

[Zaphod]

Agree this is not a great shorting opportunity. Sure pullbacks may and will happen, they are totally normal. For a great short (or anything really) you want a lopsided situation with something coming that can break the current reality (an election, event, trial, etc...). While that has seemed to be the case, obviously it hasnt moved the market in the face of confidence in the system from the fed actions. That is their job and we should be happy about it overall, things could be so much worse and I hope no one really wants that.

So knowing that and that we have a bit of momentum going, are above 200d, there is really nothing 'obvious' to break it especially given seasonality that this is usually a chill market period.

Otoh, data will start to pile up to non ignorable amounts by fall, then you have election, possible second wave, etc...This also certainly will be balanced and have to be judged by how much assistance the government is doing fiscal/monetary. If they are seen as balancing it, it may be the only thing the market cares about.

Irrational exuberance can go on for years as we've seen in the recent past 20 years or so.

I'll be on the lookout for another event, but you can be sure I'll be doing all I can to get in before people see that fed put, etc...

[Panscan]

999-5000?

Wow what a profound statement. I don't know what it's going to do either but I bet its closer to 3000 in either direction than 999 or 5000

[Tim]

These are the types of things that can seriously damage the economy and not the market initially.
https://www.cnbc.com/2020/06/07/amer...xecutives.html

Permanent damage has been done, companies downsize and the stocks recover at lower operating levels. Earnings recover.
The mid or upper level employees have great skills but almost anyone 40 and up their value contains a ton of industry specific talents. In seeking a new position, all the airlines are in the same boat. There is no “residency program”. Lateral moves are impossible and other industries view them basically as entry level but with a tendency to view them as non traditional.
The unknown is how many industries have had permanent damage. Economic recovery from permanent damage is a long difficult process.
GDP shrinks not only in the companies, but the shrink in consumer spending.
No one knows the extent of permanent damage. The Fed saw it immediately and was “all in”. This is also the motivation for special government assistance to industries and large companies. Not for the stock prices, but to minimize the permanent damage downsizing. It’s not corporate welfare for shareholders. Profit percentages will recover, just a lot less profit. That could lead to another market decline.
Sometimes the articles call it corporate welfare, it’s really trying to minimize permanent damage and job losses.
The human cost is substantial.

[Lordosis]

If this economy can support these prices imagine how high it could go when things get rolling again

[Dont_know_mind]

Agree this is not a great shorting opportunity. Sure pullbacks may and will happen, they are totally normal. For a great short (or anything really) you want a lopsided situation with something coming that can break the current reality (an election, event, trial, etc...). While that has seemed to be the case, obviously it hasnt moved the market in the face of confidence in the system from the fed actions. That is their job and we should be happy about it overall, things could be so much worse and I hope no one really wants that.

So knowing that and that we have a bit of momentum going, are above 200d, there is really nothing 'obvious' to break it especially given seasonality that this is usually a chill market period.

Otoh, data will start to pile up to non ignorable amounts by fall, then you have election, possible second wave, etc...This also certainly will be balanced and have to be judged by how much assistance the government is doing fiscal/monetary. If they are seen as balancing it, it may be the only thing the market cares about.

Irrational exuberance can go on for years as we've seen in the recent past 20 years or so.

I'll be on the lookout for another event, but you can be sure I'll be doing all I can to get in before people see that fed put, etc...

I’m starting to think bonds do not look too bad here and am going to allocate new retirement funds to bonds for the next 12 months if things hold up on equities. I’m a bit overweight equities.

I had thought to borrow the next 1-2 years of equity investments a few weeks ago, but decided to stay ungeared, overweight equities and buy bonds with new allocations for the year.

I’m just glad I didn’t do anything silly like short Tesla, which is an idea that pops up periodically for me.

[jacoavlu]

NASDAQ HITS ALL-TIME HIGH.

top is signaled

[EntrepreneurMD]

Nasdaq closes at all time high. Nasdaq 100 (mega caps) performs twice as well as broader Nasdaq today. 2xNasdaq 100 (my best holding) is absolute insanity while bypassing single stock risk.

Anyone else here concerned about the increasing concentration into mega caps? Oh TSLA, AMZN, MSFT, NVDA! Fed leaving the punch bowl intact though. How long can Wall Street and Main Street diverge? Tough call.

[EntrepreneurMD]

Not too long I guess. Bull trap? Enough complacency yet?

[Lordosis]

hmmm premarket is showing some red numbers. I will wager today might be a bad day as well. Better make sure all the random internet people know that I saw it first.

[StateOfMyHead]

To coin a phrase I've seen used recently my opinion remains "bubble, bubble, toil and trouble". Although I understand the Street doesn't always make sense there has to come a point where we pay the piper. We were likely inflated prior to a worldwide pandemic which caused an unprecedented business crisis and yet the market hasn't corrected? It will, briefly I hope but there has been a significant loss in overall productivity and revenue.

Even if the stimulus and unemployment bonuses are resulting in John Q Public thinking he has plenty of money to spend on a $1,000 BBQ or new refrigerator, many businesses will not survive. Spouse and I lament the amazing opportunity for families with financial struggles to actually get their savings in order with the extra $500 a week etc. but that doesn't seem to be happening, nor is it the purpose of the stimulus efforts I suppose.

[EntrepreneurMD]

hmmm premarket is showing some red numbers. I will wager today might be a bad day as well. Better make sure all the random internet people know that I saw it first.

Posted before. Urge you to provide meaningful posts, like the last interchange.

[fatlittlepig]

Posted before. Urge you to provide meaningful posts, like the last interchange.

Urge you not to post.