Yes, but also equally there's people that ignore all the warning signs, when the probability actually does favor a larger pullback. That is equally as weak of logic and irrational. However, to be fair equity markets are naturally bullish bias, so it's general better to have that view, than to be a perma bear. You have to look at the case, technical analysis and facts. Not just say "well this person is always calling for a crash so he must be wrong".
Is this sell off only the beginning ?
- Thread starter gunner_trader
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Yes, but also equally there's people that ignore all the warning signs, when the probability actually does favor a larger pullback. That is equally as weak of logic and irrational. However, to be fair equity markets are naturally bullish bias, so it's general better to have that view, than to be a perma bear. You have to look at the case, technical analysis and facts. Not just say "well this person is always calling for a crash so he must be wrong".
The jobs number had something to do with today as well.
Remember how the market tanked the end of 2018 when Powell mentioned raising rates? They fell hard until he back peddled and changed his mind. I think the markets are in big trouble.
Remember how the market tanked the end of 2018 when Powell mentioned raising rates? They fell hard until he back peddled and changed his mind. I think the markets are in big trouble.
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Larger players aren't typically going day by day to sell. This down move was set into motion awhile ago, via a lot of different ways to see the probability was fairly high this was the likely outcome even though not guaranteed.
It wasn't that he mentioned raising rates...It was that he mentioned raising rates faster than what had been happening for the previous 2 years.
Remember, the Fed fund rate was at the level it is at now since just after the October 2008 crash, up until around end of 2015, when Yellen started increasing them ever so slowly. The markets handled the increases just fine up until Powell took the helm in early 2018.
We saw four rate hikes under his leadership in 2018 alone, which paused after that nasty 2018 Q4. So the hikes paused, and started coming down again mid-summer 2019. Markets breathed a sigh of relief.
But then March 2020 hit, and IIRC they held an emergency rate-decision meeting in middle of March. They had already dropped the rate by 50 basis points in beginning of March. Then in the emergency session, BAM, an instant 100-basis point drop further, to the levels we are at now.
Something tells me that your perceived "market troubles" won't be as bad as the 2015 scenario.
You keep claiming that "probability" but there is no real basis to make that claim yet. You overreacted to a 2% move ( 1% in Canada ). Just like in September some overreacted to a 4% move ( 1% in Canada ). The best you can say is things are unclear. Those calling for a "crash" are delusional there is no chance of one in 2022 unless something brand new and horrible occurs.
When we were at 4400 in September, were the bears on here ignoring the warning signs that we were going higher ? Because a whole group of them said 3400-3600 in short order and got rather overconfident and snippety about it. I don't see bulls getting like that on here, but I suppose those of us who were confident about certain areas of the market late 2020 maybe could have been but chose not to. It's the bears on here making the wild claims.
What down move ? We have hardly moved from ATHs especially in Canada. In fact, several of my stocks made new 52 week highs this week. For a Friday, markets hardly moved today I actually made money ( no short positions ). Money is rotating not leaving markets.
This is what I've noticed with a lot of posters here, If we go up 1-2% on a day, crickets. If we go down 1-2%, it's supposedly very meaningful. In a choppy, flat market, it would be characterized as a an imminent correction in motion on here. In reality, it's not even a choppy flat market yet; we are in a long term uptrend still. A least wait until it ends before you call it over.
That's fair. I didn't mean to claim or say that a full on crash is coming, although I am definitely keeping my eyes open. My intention was basically to say this pullback had several warnings sign in advance and people saying that "we just never know" I mean that is true, no one ever knows 100%. But from the metrics I use this pullback wasn't exactly random and there we're several warnings signs from a technical analysis standpoint.
Of course I am not claiming to KNOW it was going to come down or I would of went all in short. So, to be clear I am just saying this is likely going to turn into a little more than a standard pullback. That it was the probability shows from what I use to measure the markets. Also, yes I use the word "probability" because that's all I have. I don't KNOW and I also don't want to GUESS. Of course whether you believe the metrics I use are bogus or not, I understand if you do. But I do believe in my analysis.
That's understandable. When I speak I am speaking of trading, more particularly day trading. Getting the heads up and having "probability" of these types of moves, is a pretty helpful thing, as you can be more aggressive on short signals and know to avoid longs or only take A+ setups and take profits quickly.
My short term Nasdaq target is 13000. Then 12000 and 10,500. 12k is only giving up one years worth of gains and 10,500 will barely be a year and a half worth of gains.
My opinion remains that sectors aren't highly correlated to each other and index wide analysis is kind of useless at the moment. For example, something like Cloudfare got killed in recent weeks but Crescent Point went on a tear recently ( and I noted some of that strength was Americans buying it on NYSE even days the TSX was closed ). Other recent strong mini-trends were small caps starting to rally after tax loss selling, TSX energy of course, and even some miners were waking up. The Fed put a halt on some of those moves remains to be seen if they are over for now or will start up again. Energy does it's own thing anyways, but I have to walk the line between a strong fundamental area and any events that pull all stocks back.