Long or wrong until further notice
Topped out. Went short tonight
- Thread starter athlonmank8
- Start date
Long or wrong until further notice
I think one thing that might help think about it this say you were and have been long the market for years. Equities represent a substantial part of your savings and investments. If you "were" to sell, tell me where you would put your money in a negative interest rate world? I think sometimes it helps to have some perspective on this. Historically speaking yield usually rise as bull markets mature from the onset of the usual inflation that comes from growth. As yields rise, bonds become cheaper and cheaper. At some point the value pendulum swings. Equities become rich and bonds become poor and investors can take the profits from the bull market and invest them into cheap bonds at attractive yields at say 5% to 7%. This is a nice switch. Then as equities sell off, bonds rally, yields drop, at some point bonds become very expensive and equities become cheap and investors switch again.
Now however we don't have that. Bonds are very very expensive. The yields are zero. Equities actually appear cheap in comparison to bonds. If investors were for some reason to sell out of stocks, where should they put that money. I don't have the answer, I'm just asking. Real estate is very pricey in most desirable areas, bonds are expensive across all durations and risk levels. You can't put your money under your bed. You could just say eff it, I'll put it in the bank and earn zero but there are transaction costs and timing issues to deal with. There is no reason to sell because there is no where to go.
I agree, under normal circumstances where we are in this bull market, it would make sense to move into bonds and protect your cash with some yield but that is not available. Let's pretend for a second that we got the worst job report in the history of job reports. Would you still sell stocks and why? Again, there is no alternative. If that were to happen, bonds would become even more expensive and it would be even worse to switch. Let's say we get the best jobs report in the history of job reports, would you sell stocks then? Why? And do what? Bond yields would start to go up and bond prices would plummet. At some point they would become attractive but not now while they are in free fall. I'm just asking a rhetorical question here, one that I think traders often don't think about it because they are trading minute to minute.
Now I don't think there is any reason for the market to go much higher, but I also don't see the reason for the selloff. In other words, we are range bound. This can go on for years. Meanwhile, I caught a nice move in Beans. There are good markets out there, just not in equities.
wake me up when we get back to the pre NFP price.
I think one thing that might help think about it this say you were and have been long the market for years. Equities represent a substantial part of your savings and investments. If you "were" to sell, tell me where you would put your money in a negative interest rate world? I think sometimes it helps to have some perspective on this. Historically speaking yield usually rise as bull markets mature from the onset of the usual inflation that comes from growth. As yields rise, bonds become cheaper and cheaper. At some point the value pendulum swings. Equities become rich and bonds become poor and investors can take the profits from the bull market and invest them into cheap bonds at attractive yields at say 5% to 7%. This is a nice switch. Then as equities sell off, bonds rally, yields drop, at some point bonds become very expensive and equities become cheap and investors switch again.
Now however we don't have that. Bonds are very very expensive. The yields are zero. Equities actually appear cheap in comparison to bonds. If investors were for some reason to sell out of stocks, where should they put that money. I don't have the answer, I'm just asking. Real estate is very pricey in most desirable areas, bonds are expensive across all durations and risk levels. You can't put your money under your bed. You could just say eff it, I'll put it in the bank and earn zero but there are transaction costs and timing issues to deal with. There is no reason to sell because there is no where to go.
I agree, under normal circumstances where we are in this bull market, it would make sense to move into bonds and protect your cash with some yield but that is not available. Let's pretend for a second that we got the worst job report in the history of job reports. Would you still sell stocks and why? Again, there is no alternative. If that were to happen, bonds would become even more expensive and it would be even worse to switch. Let's say we get the best jobs report in the history of job reports, would you sell stocks then? Why? And do what? Bond yields would start to go up and bond prices would plummet. At some point they would become attractive but not now while they are in free fall. I'm just asking a rhetorical question here, one that I think traders often don't think about it because they are trading minute to minute.
Now I don't think there is any reason for the market to go much higher, but I also don't see the reason for the selloff. In other words, we are range bound. This can go on for years. Meanwhile, I caught a nice move in Beans. There are good markets out there, just not in equities.
the smart money will 'invest' in physical commodities inc gold for the repricing of equities if trump gets in. Looks like you have been doing some already with your soybeans play!
Well, the "smart money" might do just that however commodities will be challenged by a strong dollar. The issue here is this, I agree the "volatility" and therefore the trading opportunities will be in commodities, but for mom and pop public, they are not interested in that volatility and will stay where the markets are dull, boring and relatively quiet. And there in lies the rub. That "smart money" comprises a very small group of people who really are not going to move the needle much, the large majority of the investing public of which there are trillions of dollars stashed away are going to stay in the dull boring world that traders for some reason love to watch and hate, equities.
If retail keeps moving their stops up like I think they are...this market will get there by the close.
You could slice volume by, at least, 10 if retailers were the main players.
https://en.m.wikipedia.org/wiki/Commitments_of_Traders
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Now I don't think there is any reason for the market to go much higher, but I also don't see the reason for the selloff. In other words, we are range bound. This can go on for years. Meanwhile, I caught a nice move in Beans. There are good markets out there, just not in equities.
Totally agree. I caught the upmove in July Sugar on Thursday.