Feels like we are tethering on a crash...

KCalhoun · May 12, 2022

Millionaire said:
Not as scary as the Covid sell off was, not yet any way.

Although the Fed might not be able to come to rescue in the same way, if hands are tied by inflation, no pumping $5 Trillion into the markets like they did last time.

Right. No more fed pump = selloff likely. Wouldn't be surprised to see retest and loss of March 2020 lows by fall.

RedDuke · May 12, 2022

KCalhoun said:
Right. No more fed pump = selloff likely. Wouldn't be surprised to see retest and loss of March 2020 lows by fall.

agree not far fetched.

Millionaire · May 12, 2022

KCalhoun said:
Right. No more fed pump = selloff likely. Wouldn't be surprised to see retest and loss of March 2020 lows by fall.

Fall this year feels a bit early.

The 2000 crash took 30 months to bottom.
The 2008 crash took 18 months.
The 2020 crash took just a couple of months.

In 2020 they shutdown the economy and killed GDP so the market went down crazy fast.

I think this time it might be more like the crash of 2000, so it might take till the fall of 2023.

nitrene · May 12, 2022

KCalhoun said:
Right. No more fed pump = selloff likely. Wouldn't be surprised to see retest and loss of March 2020 lows by fall.

My guess is JPow and crew will just stop raising rates pretty soon. They already know what happens at 3.25% on the 10-year bond (see the carnage in December 2018 -- 17% drop in 3 weeks). The western economies are all addicted to ZIRP. That's the only way these zombie companies can survive.

Silicon Valley companies? The new wave of "tech stocks" are just built on the deflation model. All they know how to do is gain market share by selling below cost via free money from the Fed but can't make a fucking nickel. Look at the "successful" software companies like Palo Alto Networks or Uber -- 10 years in existence and can't even produce free cash flow or a positive EBITDA. I won't even get into the endless worthless SPACs that went public. Their exit plan is being bought out by the FAANG cohorts.

RedDuke · May 12, 2022

nitrene said:
My guess is JPow and crew will just stop raising rates pretty soon. They already know what happens at 3.25% on the 10-year bond (see the carnage in December 2018 -- 17% drop in 3 weeks). The western economies are all addicted to ZIRP. That's the only way these zombie companies can survive.

Silicon Valley companies? The new wave of "tech stocks" are just built on the deflation model. All they know how to do is gain market share by selling below cost via free money from the Fed but can't make a fucking nickel. Look at the "successful" software companies like Palo Alto Networks or Uber -- 10 years in existence and can't even produce free cash flow or a positive EBITDA. I won't even get into the endless worthless SPACs that went public. Their exit plan is being bought out by the FAANG cohorts.

not this time around. Like I said before many have never seen real tightening for a very long time.

kashirin · May 12, 2022

People hold stocks now as inflation hedge.
If interest rates stay below inflation - which they will - stock market will go higher, much higher.
You don't want to hold cash with 8% inflation and you don't want those money in 3% bond either

lwlee · May 14, 2022

iceman1 said:
This post must be a signal of bottom VERY near.

Feeling confident are we?? Nice pop on Friday but to be expected after so many down days. Still no fear driven selling. VIX is high but never really spiked. Those 50 basis pts increases are still coming.

deaddog · May 14, 2022

kashirin said:
People hold stocks now as inflation hedge.
If interest rates stay below inflation - which they will - stock market will go higher, much higher.
You don't want to hold cash with 8% inflation and you don't want those money in 3% bond either

Did someone forget to tell the stock market. The best way to make money is not to lose money. I've been heavily in cash as the market trends down. The best way to control your risk is to have a strategy that takes you out of a bear market. Nothing wrong with cash!!

SimpleMeLike · May 14, 2022

deaddog said:
Did someone forget to tell the stock market. The best way to make money is not to lose money. I've been heavily in cash as the market trends down. The best way to control your risk is to have a strategy that takes you out of a bear market. Nothing wrong with cash!!

Hello deaddog,

You are right.

I was just telling a trading buddy who is holding a some stocks long and asking what to do.

It is ok to be long only trading/investment, but it is imperative to know when to exit the trade position.

KCalhoun · May 14, 2022

deaddog said:
Did someone forget to tell the stock market. The best way to make money is not to lose money. I've been heavily in cash as the market trends down. The best way to control your risk is to have a strategy that takes you out of a bear market. Nothing wrong with cash!!

Great point, I'm mostly cash here... swingtrading either way here is risky, cash is good