And I'll be selling him those puts.
Buckle up Guys its starting
- Thread starter propwarrior
- Start date
What I gather from this awesome graphic, besides that these drops are typically trading opportunities, is that you can go many years without a 5% drop, but they start to happen fairly regularly when they surface and has meant a bear is near. Additionally, the graphic is obviously not updated in 2015, even though the results are in.
At the beginning of January 2015, the S&P was sitting at 2044.81. On September 9th 2016, its at 2127.81. In 21 months, it as risen only 4%. We've been treading water for 21 months. The S&P has gone almost nowhere. I think we're due for the RESUMPTION of the BULL market!!
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Dow: 17823 on January 2nd, 2015. Up less than 2% in the last 21 months.
Edit:
Dow: 17823 on January 2nd, 2015. Up less than 2% in the last 21 months.
Thanks for the update....even worse.
You can make a case either way, though I tend to agree...near term correction before the bull resumes. No doubt, though, that there is a bear on the not-too-distant horizon. Always keep some dry powder handy.
I'd also add that the DOW is only up 150% since 2008/2009 low. That may seem like its a lot, but actually given that it was recovering from such a significant plunge, its not as big as it appears. Its only up 29% from its pre-crisis high. For 8 years, that is a truly miserable return.
I think there is lots of upside still.
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Yes, agreed, but the end of a bull market brings overbought conditions. Those pre-crisis highs were overbought conditions, and the final leg of this bull market will bring the same. While it's certainly trade-able, one must understand that they are buying high. Being able to sell before the herd or having the stomach and liquidity to ride out the downturn are key at this stage.
Agreed, but that's actually my point. If you combine my two posts together, you will realize that this 21 month treading water period indicates that we aren't in an overbought position. There is no "irrational exuberance". This last 21 months have been a period of consolidation. I think the USA and my country, Canada, are poised for a significant surge in their respective economies. The inevitable increase in interest rates may have a short-term negative impact on the stock markets, but it will be eventually viewed as a sign of confidence in our growing economies.
Yes, don't max out your available margin. This is not a time to borrow heavily to invest. However, one shouldn't sit on the sidelines. There is LOADS of room for growth.
Here's Monday's trade.....
Let VXX get real fat in the opening 20 minutes..... then go balls to the wall and buy the $40 puts after the "second" pullback it puts in. Not the first. If for some reason it comes out of the gate heading south....ie markets open green....buy the puts on the first jump north for VXX.
That'll be my trade at least. We shall see.
The Fed is not going to raise this month. December is priced in. S&P will take out 2187. The big correction will be in February.
Let VXX get real fat in the opening 20 minutes..... then go balls to the wall and buy the $40 puts after the "second" pullback it puts in. Not the first. If for some reason it comes out of the gate heading south....ie markets open green....buy the puts on the first jump north for VXX.
That'll be my trade at least. We shall see.
The Fed is not going to raise this month. December is priced in. S&P will take out 2187. The big correction will be in February.
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Why February?