Q4 2013: A Market Inflection Point
- Thread starter cmdtytrdr
- Start date
Don't sweat it. A few of those points were yours truly. Nikkei too. Although looks like it's starting to pop back up a drop - which is great. I want to buy puts and short US stocks tomorrow and will do so right on or before the open. I hope we rally.
With respect to individual stock and option positions I like some names that aren't super liquid and it's just dumb to leave myself open to get squeezed.
If I tell you I think oil is headed to mid to low 80s this quarter that's so liquid that you, me, and a hundred traders on this board won't make a shit of a difference. It's going to go down quite naturally.
Personally, I think you're a year early...
-- the unintended consequences of Obamacare haven't shown themselves yet...
-- the unintended consequences of the US gov't shutdown haven't shown themselves yet...
-- the "shot across the bow" in the form of a very public hedge fund/prop firm blow-up coinciding with a market peak hasn't occurred yet...
-- the bellwether in a frothy sector hasn't warned/missed their earnings yet...
-- a third world default hasn't occurred yet...
-- QE hasn't ended yet
-- the stock market isn't in a "boom" or "bubble" because the "public" hasn't participated in the stock market in the last 5 years
-- the public is in gloom and doom mode. No optimism to be found
I can realistically see the end of the commodities boom, however. Especially if QE ends... But the end of commodity and bond booms usually sends the money into equities...
And a rising stock market -> increased profits -> increased company investment/expansion -> increased employment is the usual formula for greater public optimism... We've seen the first 2 items. The last 2 have been non-existent...
The gloom and doom of the public has yet to be the cause of a sell-off/panic. Conversely, all sell-offs/panics occurred near the peak of public optimism...
For the last 10 years, I've felt the 2000s were a rehash of the 1970s. Once QE ends, we'll have a hard landing (not a slow deflation of the commodities bubble) and a short recession, but then it'll be August 1982 / August 1995 all over again...
If the Fed gives up the easy money this quarter, the stock market boom bell should be ringing some time between late 2014 to election 2015
-- the unintended consequences of Obamacare haven't shown themselves yet...
-- the unintended consequences of the US gov't shutdown haven't shown themselves yet...
-- the "shot across the bow" in the form of a very public hedge fund/prop firm blow-up coinciding with a market peak hasn't occurred yet...
-- the bellwether in a frothy sector hasn't warned/missed their earnings yet...
-- a third world default hasn't occurred yet...
-- QE hasn't ended yet
-- the stock market isn't in a "boom" or "bubble" because the "public" hasn't participated in the stock market in the last 5 years
-- the public is in gloom and doom mode. No optimism to be found
I can realistically see the end of the commodities boom, however. Especially if QE ends... But the end of commodity and bond booms usually sends the money into equities...
And a rising stock market -> increased profits -> increased company investment/expansion -> increased employment is the usual formula for greater public optimism... We've seen the first 2 items. The last 2 have been non-existent...
The gloom and doom of the public has yet to be the cause of a sell-off/panic. Conversely, all sell-offs/panics occurred near the peak of public optimism...
For the last 10 years, I've felt the 2000s were a rehash of the 1970s. Once QE ends, we'll have a hard landing (not a slow deflation of the commodities bubble) and a short recession, but then it'll be August 1982 / August 1995 all over again...
If the Fed gives up the easy money this quarter, the stock market boom bell should be ringing some time between late 2014 to election 2015
I'm going to bed. Things look to be slowly going down in ES and overseas right now. Slowly. No panic...yet.
You bring up good points. What are you and I debating? Timing. Timing is everything. You may be right and I may be wrong, and I'll lose a lot of money if my timing is off.
But I want to go in now. There's plenty of froth.
I can give you reasons, but they're mainly psychological - every trader is different. I may be a little early, but I think we're on the cusp RIGHT NOW of something major happening.
Nobody else believes that. That's a good thing from my point of view. When that moment happens and everyone rushes for the exits it will be too late to get in.
I think my timing is good right now. r/r is very good and I have a nice stop. Your view is intelligent, but is kind of the consensus, for better or worse. I'm comfortable being contrarian in the face of the evidence I have. Good luck to you - I'm sure you'll probably be shorting too if and when the market drops another 3-4% from here. I get that. It's cool. Lots of ways to skin this cat.
