April contract, yes. You didn't specify.
Black Monday
- Thread starter bond_trad3r_II
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April contract, yes. You didn't specify.
True but we usually talk about the closest expiry month.
My point is that I believe oil below $70 and above $100 is very bearish to the market. $44 is in danger zone. Oil costs $15 to $20 extract and many countries now are selling at around $38 because of the quality and other reasons. This translates to lower to no income to oil producing countries that will trickle down to other non oil producing countries and will have big negative effect. Market has a kind of ignored this fact so far.
They are already doing it. Example? Russia, Iran,....
They may be increasing production, but it's not to make up for lost sales. They're not that stupid.
Although none of this has anything to do with tomorrow morning.
I think that it is possible to predict a Black Swan but only when you're very close to its occurrence. The usual stock market advice is to never panic. But if you do have to panic, try to panic before everyone else does.
To get a good Black Tuesday kind of sell-off, you need to begin from very high valuations. Cash has to be a very attractive alternative to stock ownership. I'd love to see a table of market panics which listed how much the market dropped (over a 7 day period for example) along with how high short term bank interest rates for cash were (or maybe t-bill rates). My guess is that you won't see any significant panics with t-bills under about 3%. Right now, interest rates are at a fraction of that number.
To get a good Black Tuesday kind of sell-off, you need to begin from very high valuations. Cash has to be a very attractive alternative to stock ownership. I'd love to see a table of market panics which listed how much the market dropped (over a 7 day period for example) along with how high short term bank interest rates for cash were (or maybe t-bill rates). My guess is that you won't see any significant panics with t-bills under about 3%. Right now, interest rates are at a fraction of that number.
Over the past 3+ years, we have only travelled from the upper limit to the lower limit of the weekly trend channel and back again, at least in the ES/SPX. Whenever we roll over, the end-of-the-bull-market and correction threads begin, but then we turn at the lower limit and go right back up again. Eventually, this will end (this is the seventh year of this market), but I expect we'll at least have a lower high first.