Black Monday

B

bond_trad3r_II

Is a Black Swan market crash in the making? Stocks are becoming volatile once again (a good thing for us traders), US dollar index is soaring the most since Lehman, WTI is crashing to new lows, economic indicators are trending downward (Core PPI was -0.5%), except for new jobs with a boom in bartenders and barmaids. The mixed economic news is providing cover for Yellen by delaying inevitable rate increase by the Fed.

I don't know guys, this may be my 20th Black Monday thread but this time feels different. A storm is brewing which may even surpass the damage did by the one in 2008.
 
Downward cycle for some time to go, all moves up should be considered pull backs in the downtrend.

New lows coming to a planet near you!
 
As far as Monday being "black", the ones I remember were preceded by Fridays that closed near the lows. For now, my guess is that there will buying of the dips.
 
I guess this is what makes it a market, I've been waiting for a market pullback to get long and went long at 3:59PM on the Nasdaq (QQQ) to attack the all-time highs.
 
You forgot to add in the debt ceiling. ...were already past and bills are due...im going to call my credit card companies and ask them to raise my credit line....lets see what they say.....but no worries about the debt ceiling, they will raise it for the 75th fucking time because in this fantasy like world there is no such thing as failure. ...just keep raising it and raising it. They will give it another extension and raise it to $22 trillion or so...Why don't they just raise it to $389 trillion so we don't have to worry for the next 178 years. We can just keep spending as much as we want...no limits. Just keep the printing press on....everything you were taught about economics 101 throw it out because there is no such thing as economics 101 in this new world economy. Failure is praised. Debt ceilings are lifted, bailouts for everyone. QE and tarp ...rates at historical lows and a fed that bows to wallstreet ...yep economics 101 was all a lie.....
 
bond_trad3r_II said:
Is a Black Swan market crash in the making? Stocks are becoming volatile once again (a good thing for us traders), US dollar index is soaring the most since Lehman, WTI is crashing to new lows, economic indicators are trending downward (Core PPI was -0.5%), except for new jobs with a boom in bartenders and barmaids. The mixed economic news is providing cover for Yellen by delaying inevitable rate increase by the Fed.

I don't know guys, this may be my 20th Black Monday thread but this time feels different. A storm is brewing which may even surpass the damage did by the one in 2008.
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Black Monday is possible, but now adays with the fed bowing to wallstreet they will step right in....but maybe this time they step in and anything and everything they do will do nothing to stop the collapse.
I think that's a possibility ...could be such a collapse that liquidity dries up and wallstreet shuts down for the day. They wouldn't let a 20% drop happen in one day. Circuit breakers would kick in and the markets would go into automatic shutdown.
I would say let the free markets make that decision but we all know the market is rigged so free markets don't exist and never will exist ....
Anyway Monday should be interesting ....the buy the dip crowd always comes in to save the market. One day however I think that's all going to change where buying the dip will prove to be worthless. The vix will climb out of its range of 12-20 and surge to 25, 28, 34, 38, 43, 45, 47, 50.....I think volatility is going to stay throughout 2015 and I really believe this year at some time there is going to be a significant run in the vix to levels we haven't seen in a very very very long time. Im actually thinking 40-50 could be a possible level as markets start to break to the downside.....October lows are also certain in my opinion....so black Monday maybe not but definitely a break down in the markets is coming...just keep in mind fed meets next week and they will most likely keep the word patience in their statement to keep wallstreet calm because we all know with the trillions in debt we are in there is no way the fed can afford to raise rates to even .50%.....
 
As far as money printing ruining the value of the dollar, I think the thing to watch for would be a sudden increase in the velocity of money. Right now wealthy people and corporations are sitting on huge amounts of cash. Inflation really needs those people to begin spending. And I think that huge cash hoard makes it unlikely that we'll have a big market crash. For a real market crash you want a situation where everyone in the public thinks that stocks are the only thing worth owning. Right now I know way too many people (admittedly academic) who don't trust the stock market. And the others are fully invested only in their retirement accounts but those they let the professionals manage. Every week they send more money into their retirement accounts and that money has to be invested by the pros. So there really isn't much room for panic there.

As far as the budget deficits destroying the dollar, I think the problem is intimately tied up with the trade deficit. What's been happening for years is that foreign countries have been sucking dollars out of the US. If we hadn't printed it, they'd have driven the dollar value to infinity and stopped us from being able to export anything. Eventually that turns around, but with the US the only superpower it doesn't look like it would happen except by the market being saturated. To compute the market saturation point, note that as foreign countries get wealthier, they're going to want to increase their foreign reserves and that means they keep wanting more dollars. The process ends when the majority of the planet is as wealthy as the US. And that isn't going to happen for many decades.

So I don't see a cause for a real market crash any time soon. I remember 1987 really well. If I went to a major league baseball game, no one was talking about sports. They were talking about stocks and how much money they were making. I don't see a 1929 type crash until we get back to stocks being that much the subject.

Sure the valuations are high, but interest rates (t-bills, say) are extremely low and the value of stocks is supposed to be high when interest rates are low. Is the Fed going to raise rates? Sure but my guess it won't be by much and it won't be for a long time. Unemployment is down but that's because a lot of people have quit looking or are doing odd jobs because their unemployment insurance ran out.

There are just too many stocks out there paying dividends of 3% and higher for me to be worried about stock prices. Now maybe my view on this is messed up because the stocks that used to pay 0.1% or nothing at all are now the established giants. And the giants of 2030 are now trading at ridiculous multiples with no dividends. But how much of a percentage of the market are they? I don't have a feel on this.

One thing that you can observe through history is that as a country's economy matures, it becomes more resistant to the occasional depression cycles. Thus in 1929 the US did a lot worse than the older economy in Britain and by 2008 the US was a lot more mature and had less effect than 1929. The same applies to most of the rest of the world (which suffers these things approximately simultaneously but to differing degrees). Now if I were invested in BRIC stocks I'd be a lot more inclined to worry and maybe that's why the US dollar is rising.
 
It looks like there was support at the lows of yesterday, so I believe that we'll move up on Monday. Had it closed at or near the low, that'd be a different story.
 
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