ES Journal - 2017/2018

[FriskyCat]

Super glad that I did.



Hard to argue with facts, now. We are down nearly 20%. Over 300 of the s&p stocks are down greater than 20%, some near 40%. This is a major correction. Only time will tell if it turns into a sustained bear market, personally, I still don't see it. Whether or not you acknowledge it, markets don't move up or down based on arbitrary inputs like technical indicators or other kinds of silliness that are often espoused here. Big money with long-term economic outlooks move markets and the horizon is still pretty sunny right now. Glad to see the market get a haircut, would be happy to jump back in on signs of consistent strength and will wait for the market to reinforce that view before I make any moves. So far, every time I dip my toe in the tide goes out again

Out of curiousity, were you in the markets back in 2000 and 2007/08?

 

[FriskyCat]

We've been down at these percentage levels about 6 or 7 times in the last 10 years. Are you insinuating that those were all bear markets? In my eye, this is a much needed correction and will hopefully be a short-lived one at that.

Yes, and each of those times we had an uber-accomodative Fed and central banks worldwide were still doing the full court press reflation. Pull up a chart of all of the so-called "leadership" stocks that the financial media covers each day. AAPL, AMZN, NFLX, NVDA, GOOGL. FAANG's really. Look at weekly charts of those stocks and tell me how many times you've seen parabolic moves of that nature not retrace a very significant percentage of the entire move. Heck, AMZN is still up roughly $200 from 12/31/17 and double the price it was at some point that year.

Secondly, retail investors plowed back into this market post 2016 election in a big way. Margin debt grew noticeably and investor sentiment reached peak levels before this thing topped out. IMO, a key ingredient for any sustained move lower (correction or bear market) is cashing out at the top and transferring risk to either retail investors or the plethora of do-nothing hedge funds that simply stopped trying and parked themselves in FAANG's and hedge fund hotel names.

 

[schweiz]

After the 2008-2009 crash, the biggest drawdown of the ES was 18.322% (8/8/2011).
Today we are at a drawdown of 17.829%. Top was 09/21/2018.
Under Trump's presidency we will probably make the biggest drop after the 2008-2009 crash. When the markets went up it was, according to Trump, because he was such a good president. This drop he will probably not claim... it will probably be fake news or incompetent people in govenment, FED or SEC.

 

[mastacoli71]

A bounce back scenario to consider: US gov magically comes up with deal over the weekend to ignite Santa rally. ES Aggressive short at 2514, modest short 2548 line in the sand 2581. Just levels to consider should we bounce off 2408.

If we do get bounce Monday what a gift it would be for retail investors right before Xmas. Ho Ho Ho!

Merry Xmas to all!...enjoy the time with your families as that is one of the most important things to consider IMO during the holiday season. The mkt will always be there to make $$$

 

[mastacoli71]

After the 2008-2009 crash, the biggest drawdown of the ES was 18.322% (8/8/2011).
Today we are at a drawdown of 17.829%. Top was 09/21/2018.
Under Trump's presidency we will probably make the biggest drop after the 2008-2009 crash. When the markets went up it was, according to Trump, because he was such a good president. This drop he will probably not claim... it will probably be fake news or incompetent people in govenment, FED or SEC.

Like the analysis. He could be blamed for the volatility because he cannot bite his tongue. He’s not afraid to speak his mind but as president you have to filter which unfortunately he cannot.

As I mentioned before this could have all been avoided if Yellen started raising 4 years ago when the signs of good economy were there. It’s a shame because we could have had a soft landing but she was like a drunk at the Xmas party punch bowl in addition to her heavily weighted liberal policy mindset. Note she only raised once when Obama was in office. All others were when Trump took over. Coincidental...I think not!

 

[mbondy]

The last 6 to 7 times over the last 10 yrs are different this time around. Rates are now higher, QE is being withdrawn here and in Europe, record low unemployment, inflation, etc...the list goes on and on.

We could get a bounce higher when hitting 2330-2400. How high will we go...2700-2770 then selling resumes into 2019 and hitting 1500’s by 2020. I’m not big valuation guy. I believe in patterns and also believe in mkt staying irrational longer than you and I can stay solvent.

I could effectively argue the other side of everything you've said to demonstrate how none of those things are as meaningful as you are prone to believe, but I'd bet it wouldn't change your opinion.
For what it's worth, I AGREE with you - yes rates are higher, the Feds liquidity is being withdrawn, etc - I just think those things are relative and I do not think that long-term, they are going to have the side-effect that you're expecting although to some extent, the market IS validating your view so who am I to speculate further?

 

[Spooz Top 2]

I don`t put too much emphasis on what "type' of market we are in , as long as we have
Vol, it`s a good market.

I`m sure that that there are quite a few here that have never experienced a Bear before... this is pretty much it to a T... grind down, consolidate followed by strong leg...with the occasional PPT/ CT buy rip from left field to tag weak shorts.

 

[mbondy]

Yes, and each of those times we had an uber-accomodative Fed and central banks worldwide were still doing the full court press reflation. Pull up a chart of all of the so-called "leadership" stocks that the financial media covers each day. AAPL, AMZN, NFLX, NVDA, GOOGL. FAANG's really. Look at weekly charts of those stocks and tell me how many times you've seen parabolic moves of that nature not retrace a very significant percentage of the entire move. Heck, AMZN is still up roughly $200 from 12/31/17 and double the price it was at some point that year.

Secondly, retail investors plowed back into this market post 2016 election in a big way. Margin debt grew noticeably and investor sentiment reached peak levels before this thing topped out. IMO, a key ingredient for any sustained move lower (correction or bear market) is cashing out at the top and transferring risk to either retail investors or the plethora of do-nothing hedge funds that simply stopped trying and parked themselves in FAANG's and hedge fund hotel names.

I was around in 08.

If I'm not mistaken, some data would indicate that retail did a massive retreat from the market in Jan-Feb of 2018 and then again in August-Sept which has been earmarked as the reason for the big drop earlier this year and again later so on that topic, we are on opposite ends.

I've not seen any indication that margin debt is as you describe especially relative to previous market routs.

 

[Specterx]

I register that some of the people who insisted we were in a minor correction back then now seem to be of a different opinion.

Certainly my expectations for this December were way off. But that's a good example of why it doesn't pay to "insist" too much in trading, and why an opinion ain't a position...

Not going to complain one bit about the elevated volatility, though.

 

[mastacoli71]

I could effectively argue the other side of everything you've said to demonstrate how none of those things are as meaningful as you are prone to believe, but I'd bet it wouldn't change your opinion.
For what it's worth, I AGREE with you - yes rates are higher, the Feds liquidity is being withdrawn, etc - I just think those things are relative and I do not think that long-term, they are going to have the side-effect that you're expecting although to some extent, the market IS validating your view so who am I to speculate further?

It’s all good man. There are always differences of opinions. At the end of the day I just want to be day /swing trading based on the predominant Trend.