Start of a bear market - DJIA January 2018

[beerntrading]

While I see brand/corporation surviving, with a total replacement of all board members and executives. Gen-X is tired (I am one of them), so the offers better be kind. Millennials lack experience, but will be assistive in this generational transfer. Back to the point: companies and audits are forthcoming. Don't underestimate the significance of recent Pentagon discoveries. Arthur Anderson went under in 2001, I believe, and auditing will make a comeback.

That's an interesting set of points, and particularly the generational point. I think this is a bigger deal that people give it credit for. But I think that's opposite what you're saying--not for any belief in exceptionalism but purely as a function of demographics. There's a LOT of millennials, and they span a very long time. Quite simply more people to create and consume stuff. The vanguard of millennials are only a few years into maturing as major earners and financial players, the tail end of the generation is still in high school.

I personally am still bullish on the market, though earnings season has signaled caution, but we're now back to where earnings-based valuations have been trending during the last years--at least as I view it. So I don't see any reason that this bull market cannot continue and the fundamentals are still strong. I've previously laid out my case here for an unprecedented bull market in which we're at the start of a bubble with the big gains still ahead. But that opinion isn't set in stone and actually the earnings pause has be concerned.

I do agree that we just tested a major level. And I'm ready to get bearish if we break under here much further.

Also, the Dow exaggerates bullishness even in logarithmic charting, the move so far this month hasn't been anywhere near as big as it looks in long-term linear charts.

 

[KevinD]

I forecast the 2008 (or 2009?) bottom BEFORE it happened. It's not hard to do but you have to understand market fundamentals.


Sorry, it's still BS. If there is any critical thinking, the following elements are missing:

-Give the Forecast
-Give an Explanation of the Forecast
-Give Data/Evidence to support the Forecast

Otherwise it's still just guessing up/down.

a). He gave you the forecast.
b). He does not need to explain to "jinxu" why he gave his forecast.
c). You will dismiss the data/evidence to support your opposing narrative.

 

[vanzandt]

The vanguard of millennials are only a few years into maturing as major earners and financial players, the tail end of the generation is still in high school.

No. I think they use 20 years +/- for the "generations". The Boomers were from '45 to '65, then you had Gen X which would be '65 to '85, then the Millenials which should be from '85 to '05 right? They are also called "Gen Y" or the "MTV Generation". I don't know what they're calling people born after 2005. But there are no Millenials still in HS.... unless they are really dumb. Right?

EDIT... my bad. You're right.

 

[jinxu]

a). He gave you the forecast.
b). He does not need to explain to "jinxu" why he gave his forecast.
c). You will dismiss the data/evidence to support your opposing narrative.

What opposing narrative? I have not yet made any claims that agree or disagree with his OP. Now you're just making $#!% up. Ignored. Again the format is:

Forecast. Reason. Evidence.

Anything less is BS.

 

[volente_00]

No. I think they use 20 years +/- for the "generations". The Boomers were from '45 to '65, then you had Gen X which would be '65 to '85, then the Millenials which should be from '85 to '05 right? They are also called "Gen Y" or the "MTV Generation". I don't know what they're calling people born after 2005. But there are no Millenials still in HS.... unless they are really dumb. Right?

EDIT... my bad. You're right.

Speaking of boomers, we are nearing a time where many are getting out of the market or at least restructuring retirement accounts to less risky instruments. As rates rise and redemptions hit, where will of all of the new money come from to support the equity markets ? The damn millenials stay at home Til age 30 mooching and the work ethic is pure shit and they damn sure aren't going to be investing at rates seems by previous generations who knew what the words accountability and responsibility meant.

 

[vanzandt]

where will of all of the new money come from to support the equity markets ?

Crypto's!

 

[beerntrading]

Speaking of boomers, we are nearing a time where many are getting out of the market or at least restructuring retirement accounts to less risky instruments.

This is a tiny drop in the bucket. You're only talking about the first couple million that people have made that will be seriously reallocated. Fixed income is still going to hold collared ETFs. They said the same thing in the while the boomers were coming of age in the 80s. This actually did manifest itself as the smaller Gen-X and Y generations came of age from about 2000 to the 2010s.

People overlook the importance of demographics to an economy. Overlay a population rate of growth chart in Japan with the Nikki. Or consider India and China (and remember that the urbanizing middles class is effectively "population growth" of the investing population).

The damn millenials stay at home Til age 30 mooching and the work ethic is pure shit and they damn sure aren't going to be investing at rates seems by previous generations who knew what the words accountability and responsibility meant.

I'll take up the other side of the trade premised on that belief. Consider the cities that millennials move to and how those economies compare to the cities they move out of. I suspect if you plotted average or median age of a city it would have an inverse relationship to that city's economy. Aging Japan is a pretty compelling story of this too (keeping in mind that the aging of Japan has been a 30-40 year trend).

No. I think they use 20 years +/- for the "generations". The Boomers were from '45 to '65, then you had Gen X which would be '65 to '85, then the Millenials which should be from '85 to '05 right?

I don't like hard cut-off dates for defining generations. A generation is that which shares common traits and experiences. Millennials, I think are best defined as those who grew up more fluent in technology than their parents--specifically those who knew it before learning it in school (I actually failed testing out of keyboarding based on technique in spite of the fact I was more than 2x as fast at typing as the teacher). Boomers were those who were born to previously urban dwelling parents who opted for the white-picket-fence existence....

Boomer's parents, the (now twice eclipsed) greatest generation grew up in the depression and carried the burden of the second world war...

By that metric, Gen-Y is overlapped almost completely by the emerging millennial generation, the oldest of who were born in maybe 1980. By 1988 or 1990 I'd say all births were millennials. The 20+ year span of large families of the largest generation means we're just seeing the first waves of this rising tide.

 

[Sweet Bobby]

I live in a very comfortable position of not caring where the market is. I trade the market where it is and trade the probabilities presented in the options chain. This got me out of the business of predicting price movement. Now I simply make sure that the odds are in my favor. It’s very liberating once you accept that you can’t predict the future.

 

[lawrence-lugar]

I live in a very comfortable position of not caring

very liberating once you accept that you can’t predict

Trading the market seems like a piece of cake,

I just came from a Walmart store shopping, then browsed online at home what it takes to get your own product into Walmart.
I've always wanted to create my own food product/line, and have it exposed in major stores.

Between those two options, potential success in the market seems like a walk in the park. -- or much more feasible. Rather then experiencing retail product success.

Put a steak and potato into a box, and call it a frozen package dinner, Sweet Bobby
Make a million doing that.

 

[MidwesternTrader]

https://www.tradingview.com/chart/DIA/DLx9RBWR-Start-of-a-bear-market-DJIA-January-2018/

Near term I see $180 DIA as a breathing place for support.

The 180 mark is also the start of the DIA's parabolic move on the chart from Nov. '17 through end of Jan. '18 where a 44% increase occurred in 13 months with an average 3.4% increase per month during that time.

Before last parabolic thrust up, the DIA up move from Mar. '09 through end of Nov. '17 was a 155% increase over 92 months with an average 1.7% increase per month during that time. Giving back all the final parabolic move probably isn't unreasonable to help reset some balance.

Everyone was so worried about the market cap loss in potential crypto unwinding. That is dust compared to the market cap loss that would accompany an equities unwinding if DIA were to hit 180 and all the other major markets worldwide pullback in a similar fashion.