How low will it go? Stock market taking a dip

Discussion in 'The Okie Corral' started by RWBlue, Feb 24, 2020.

  1. papershoot

    papershoot

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    My gut says the market will dip well below the low on 3/23. I expect a sell off at the close on Friday afternoon, but no longer expect it to break the lows this week. When this downturn started, I half expected a "V" shaped recovery. Now I think we will be fortunate to get a "W" over a longer period.

    I am not seriously tracking individual stocks, as I plan to go with an index fund. I have been looking at some of the large, expensive ones like Lockheed Martin, Microsoft, Apple, Tesla, Google, and Amazon. I am spooked on financials and automotive now. I may buy a few.
     
    Last edited: Apr 2, 2020
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  2. Aurora

    Aurora

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    Making decisions based on what's going to happen on Friday is not a good strategy. Short term traders almost always exit on Friday so they have the weekend free. Going short on Friday and long on Monday is a time honored day trading tactic.

    There has been a lot of bad news released during the weekend in recent weeks. It gets people pumped up and the results show on Monday.

    V.
     
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  3. Aurora

    Aurora

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    I think this is going to be range bound market for a while. I don't think the powers that be will allow it to drop below 18,000 on the DJIA. Allowing that would be a serious red flag to anyone who knows what they're doing.

    The upside? Who knows. The problem is that this market has dropped straight down (what goes up, comes back down - in reverse) and there is a tendency to fill in the gaps. That means a volatile sideways market.

    Then again, there is an old saying that the trend will not change until the last bull (or bear) has thrown in the towel. Maybe that's true in this case.

    I'm going to ride my bike around the city to see what's really going on here in Seattle.

    V.
     
  4. rj1939

    rj1939

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    That has been a pattern for a year or more, to release bad news/numbers after the market closes on friday.
     
  5. Z71bill

    Z71bill

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    The panic buying the last 1.5 hours saved the day -

    I wonder who was buying?

    Does a 3% up move in the last our surprise me? No

    But a 3% loss wouldn't have either -

    Sort of a tug of war going on -

    The FED's balance sheet will hit $6 trillion tomorrow - what a farce our central bank is - they are going to destroy the dollar and then they will say - nobody could have seen this coming!

    But we get $1,200 checks - so that is great -

    In the last 3 weeks FED balance sheet has gone up $1.6 trillion -

    That alone is almost $5K for every American - let that sink in and try and figure out why that is a good idea.
     
  6. papershoot

    papershoot

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    "By McDonald’s math, he continues to see downside risk to the Dow Jones Industrial Average to 15,000 from its current perch just above 21,000. He thinks the economy could begin to show signs of life in the fourth quarter of this year — but until that starts to show up somewhere in the markets or economic data, he prefers putting on trades that profit from extreme volatility and downside.
    Yahoo Finance highlights a call such as this because, well, McDonald has been dead right so far. Moreover, April has lived up to its billing in the early going as potentially lethal to stocks because of dreadful economic data nobody on Wall Street has ever seen before.
    After flirting between gains and losses in the morning, the Dow fell nearly 500 points by afternoon trading. The action in the markets today indicates investors haven’t fully grasped how much the coronavirus is derailing the U.S. economy.
    Long-time economic forecaster Bethan Ann Bovino, chief U.S. economist at S&P, thinks the April employment report could show 8 million in headline job losses.
    McDonald isn’t out on an island with his concerns on the market. Many strategists Yahoo Finance has talked with this week suggest the two-week long rally in stocks from the late March lows looks overdone. The pros point to not only souring economic data globally, but also the approaching earnings season as a source of downside risk.
    “The market theoretically should be down even more when you lose over 700,000 jobs in one month with the worst yet to come. I think the market is braced for a lot of bad news. I don’t think the market is more or less pricing in a two-month shutdown,” BNY Mellon chief strategist Alicia Levine says."

    https://finance.yahoo.com/news/dow-...mic-hits-us-economy-strategist-181857580.html
     
  7. papershoot

    papershoot

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    deleted
     
    Last edited: Apr 3, 2020
  8. Aurora

    Aurora

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    We're approaching our upside target of 23,500 to 24,000. It'll be in this area that the bears will take an interest in entering the market, IF they intend to do so.

    This supposed to be the worst week for the virus scare so expect volatility.

    V.
     
  9. varget

    varget

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    about 2,000 dow points added in 2 days. market acting like biden already dropped out.
     
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  10. Z71bill

    Z71bill

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    Larry Kudlow rolled out hope of - The FED bazooka (buying stocks) - today - as if adding trillions and trillions of dollars to the system isn't enough to juice stocks -

    Our financial system is a total disgrace to fee markets -

    If you trust the FED to control the whole world with money created out of thin air - then buy all things - you can't lose.
     
  11. Aurora

    Aurora

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    Ouch!

    V.
     
  12. Cooter!!

    Cooter!! Permanent Noob

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    How does 'our' market compare to others worldwide?

    Obviously NIKKEI took a DOW like dump, But I doubt Japan would put in 6 BILLION fake dollars to temporarily mask the problem like we have?

    How are they handling the loss? Better than we are?
     
  13. rj1939

    rj1939

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    I thought they had already come out and said they would buy everything (unlimited liquidity)...........so I took it to mean stocks too. Like they haven't been doing some proxy buying all along.

    Now Goldman Sachs is lamenting that without allowing stock buybacks, we will never reach the lofty heights of the recent past.................What does that say about organic growth?
     
  14. papershoot

    papershoot

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    "Japan plans direct payments to households and businesses as part of a nearly $1 trillion economic package to respond to the coronavirus pandemic, which Prime Minister Shinzo Abe on Tuesday declared an emergency.
    Mr. Abe’s cabinet approved an economic package that he said was worth ¥108 trillion (about $1 trillion.) The figure includes previously approved stimulus measures announced last December, when the U.S.-China trade dispute and an October typhoon were affecting the Japanese economy."
    https://www.wsj.com/articles/japan-...sinesses-in-coronavirus-emergency-11586263242
     
  15. Aurora

    Aurora

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    Japanese stock and commodity traders are the best in the world - hands down.

    V.
     
  16. serve_and_protect

    serve_and_protect

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    Yeah, the "market" no longer bears any relationship to economic reality.


    "Record numbers of people file for unemployment"

    "Dow rallies!"

    :animlol:
     
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  17. BGDaddy

    BGDaddy Leg Humper

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    Agreed. If it did, we would still be going lower everyday. But I still think it's going to tank.
     
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  18. Jonesee

    Jonesee

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    The market gave back all it gains and closed down.
     
  19. Aurora

    Aurora

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    Well, the market opened at 23,500 and slid downwards. I guess the bears wanted a head start. However, it didn't break 22,500, which is support.

    Don't get me wrong, there are some very good reasons to be bearish; bad FED policy, sinking economy, unemployment, etc. As others have mentioned, the market often works contrary to obvious, common sense ideas. It's a forward thinking creature.

    As for the structural problems with our economic policy? It's been with us for a long time. Is now likely the time that it implodes? Possible but not likely.

    I predict a volatile sideways market as the bulls and bears duke it out.

    V.
     
  20. papershoot

    papershoot

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    Mark Hulbert
    Opinion: Stocks will revisit their coronavirus crash low, and here’s when to expect it

    U.S. market history points to a final bottom in August

    Is the great coronavirus bear market of 2020 now history? Many exuberant bulls would have you believe that it is, since the S&P 500 SPX, +1.44% is now more than 20% higher than its mid-March low. That satisfies the semi-official definition of a bull market.

    So in that narrow sense, the bulls are right. But in a broader sense, I consider their arguments to be a triumph of hope over experience. If by definition we’re in a new bull market, the question we should be asking is different: Will the stock market hit a new low later this year, lower than where it stood at the March low?

    I’m convinced the answer is “yes.” My study of past bear markets revealed a number of themes, each of which points to the March low being broken in coming weeks or months.

    While the market’s rally since its March 23 low has been explosive, it’s not unprecedented. Since the Dow Jones Industrial Average DJIA, +1.22% was created in the late 1800s, there have been 38 other occasions where it rallied just as much (or more) in just as short a period — and all of them occurred during the Great Depression.

    Such ominous parallels are a powerful reminder that the market can explode upward during the context of a devastating long-term decline. Consider the bull- and bear-market calendar maintained by Ned Davis Research. According to it, there were no fewer than six bull markets between the 1929 stock market crash and the end of the 1930s. I doubt an investor interviewed in 1939 about his experience of the Great Depression would have highlighted those bull markets.

    Another way of making the same point is to measure the number of days between the end of the bear market’s first leg down and its eventual end. There are 11 bear markets in the Ned Davis calendar in which the Dow fell by more than the 37.1% loss it incurred between its February 2020 high to its March low. On average across those 11, as you can see from the chart below, the final bear market low came 137 days after first registering such a loss. If we add that average to the day of the March low, we come up with a projected low on Aug. 7.

    More bearishness needed
    Sentiment also points to a lower low for the U.S. market. That’s because the usual pattern is for the final bear-market bottom to be accompanied by thoroughgoing pessimism and despair. That’s not what we’ve seen over the last couple of weeks. In fact, just the opposite is evident — eagerness to declare that the worst is now behind us.

    Another way of putting this: When the bear market does finally hit its low, you are unlikely to even be asking whether the bear has breathed his last. You’re more likely at that point to have given up on equities altogether, throwing in the towel and cautioning anyone who would listen that any rally attempt is nothing but a bear-market trap to lure gullible bulls.

    I compared sentiment during the recent bear market to that of other bear markets of the past 40 years in a Wall Street Journal column earlier this week. For the most part, the market timers I monitor were more scared at the lows of those prior bear markets than they have been recently. That’s very revealing.

    Volatility offers clues
    A similar conclusion is reached when we focus on the CBOE’s Volatility Index, or VIX VIX, -3.87% . An analysis of all bear markets since 1990 shows that the VIX almost always hits its high well before the bear market registers its final low. The only two exceptions came after the 9-11 terrorist attacks and at the end of the two-month bear market in 1998 that accompanied the bankruptcy of Long Term Capital Management. In those two cases, the VIX’s high came on the same day of the bear market’s low.


    Other than those two exceptions, the average lead time of the VIX’s peak to the bear market low was 90 days. Add that to the day on which the VIX hit its peak (Mar. 16) and you get a projected low on Jun. 14.

    One way of summing up these historical precedents: We should expect a retest of the market’s March low. In fact, according to an analysis conducted by Ned Davis Research, 70% of the time over the past century the Dow has broken below the lows hit at the bottom of any waterfall decline.

    https://www.marketwatch.com/story/s...E4BA55144CAA0A4C98A5%40AdobeOrg|TS=1586616293
     
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