Next Crash Scheduled for 2nd Quarter 2021?

[Clubber Lang]

Who knows, but whats evident is.... the more prices crash upwards, the more of a liklihood of prices crashing down even more vicious. Look at most of the volatile crashes.. prices literally were sky rocketing prior to the crash.

The difference now is during prior crashes there was a flight to safety and yield in bonds. Now there is zero yield so where does that money go?
It’s not going to sit idly in cash I can tell you that.
So that’s the great riddle. Can we really have a crash and bear market (2000-2002) with ZIRP and never ending QE??

 

[.sigma]

The difference now is during prior crashes there was a flight to safety and yield in bonds. Now there is zero yield so where does that money go?
It’s not going to sit idly in cash I can tell you that.
So that’s the great riddle. Can we really have a crash and bear market (2000-2002) with ZIRP and never ending QE??

wait, so if there’s no safety flight then maybe the cash will just cycle through equities until there is a flight to safety worth flowing to? Or?

 

[BlueWaterSailor]

wait, so if there’s no safety flight then maybe the cash will just cycle through equities until there is a flight to safety worth flowing to? Or?

Banks, for one, can't really carry a lot of equities on their balance sheet; see the Volcker Rule. Plenty of other toys they can play with - bonds, swaps, CPDOs, market-making, etc. - but it would take higher-quality sources than anything available to us retails to track it.

But yeah, it's a question that's been cycling in the back of my mind. I'm extremely skeptical of that moronic hook used by trading "gurus" - "just follow the big money! Let me show you how!" - but having at least some clue of where things are moving would be useful. And now that the QE fire selector has been set to full auto and JPOW is keeping the trigger down, that picture has become a lot muddier.

 

[Overnight]

...And now that the QE fire selector has been set to full auto and JPOW is keeping the trigger down, that picture has become a lot muddier.

It's clear as day to me!

 

[David's faith]

The difference now is during prior crashes there was a flight to safety and yield in bonds. Now there is zero yield so where does that money go?
It’s not going to sit idly in cash I can tell you that.
So that’s the great riddle. Can we really have a crash and bear market (2000-2002) with ZIRP and never ending QE??

they can still speculate on higher bond prices, the interest rate isn't all they care for. And in a worst case scemario a Dollar at the govt is still more secure then in a meddium quality equity

 

[Arnie]

One day in the future, the Great Asset Inflation will come to a halt and certain classes/sectors will suffer a crash / de-rating, which lasts years or decades rather than a few weeks. But that day could itself be years off and a long way up from current levels. Trade accordingly...

I think recent market behavior has conditioned people to see any selloff as a buying opportunity. But what if we get a decades long roll over not unlike what happened in Japan? The market always seems to do its best at getting the most people on the wrong side of a trade.

 

[RedDuke]

I think recent market behavior has conditioned people to see any selloff as a buying opportunity. But what if we get a decades long roll over not unlike what happened in Japan? The market always seems to do its best at getting the most people on the wrong side of a trade.

absolutely. After last years, everyone is sure market only goes up. Dip are great buying opportunity.

 

[David's faith]

I think recent market behavior has conditioned people to see any selloff as a buying opportunity. But what if we get a decades long roll over not unlike what happened in Japan? The market always seems to do its best at getting the most people on the wrong side of a trade.

Fed has given them every reason to do so. Add in the leverage effect of call options (brokers having to hedge) and some shorts beeing to early getting squeezed and you get the perfect meltup.

 

[Nine_Ender]

I think recent market behavior has conditioned people to see any selloff as a buying opportunity. But what if we get a decades long roll over not unlike what happened in Japan? The market always seems to do its best at getting the most people on the wrong side of a trade.

You mean like the one poster Schizo insisted we were in last March within days of the bottom ? Why expect the worst outcome in the strongest markets ?