We will rally and then re test the bottom

[jghall00]

Stock prices just got to fair valuation WITHOUT an earnings decline. It was historically overpriced!

So is the virus earnings hit priced in, or nah?

 

[ElCubano]

So is the virus earnings hit priced in, or nah?

Not according to his model

 

[BurtBurton]

Fair Value, overpriced, underpriced. The market could be any of those at any given time.

No doubt.....but I don't think the heavy hitters will start hitting the buy button en masse until valuations become underpriced.......that's what has historically happened in most bear markets.

 

[NY_HOOD]

This happened in 2000 and 2008. Market hit a low amid massive selling only to rally on bad news. Then the selling started again trapping people and panic selling started again and new lows were made ( double bottom ).

 

[ET180]

^^^^^^^THIS. ^^^^^^^

Then in that case, looks like Gundlach and Ackman timed it perfectly.

 

[cdcaveman]

This happened in 2000 and 2008. Market hit a low amid massive selling only to rally on bad news. Then the selling started again trapping people and panic selling started again and new lows were made ( double bottom ).

Yes and yes. Stimulus won't fix the lost earnings and cash hoarding....money is gonna go into inflating the prices of everyday goods.. anyone getting back in at this point is gonna get hammered

 

[tommcginnis]

Then in that case, looks like Gundlach and Ackman timed it perfectly.

I won't say for others, but a slightly-tuned MACD would have you long into February; reversed two days before the big drops started, and reversed (back to long) today. And with a little work,.......

 

[BurtBurton]

So is the virus earnings hit priced in, or nah?

I don't think so.....Market Cap/GDP (Buffett Indicator), CAPE ratio were very high before this virus even hit. Add to that an absolutely insane level of corporate debt, and the market wasn't even close to fairly valued. You're going to see bankruptcies and defaults on high yield debt this year which is going to further drop this market.

Listen - the Fed has already said they are backstopping SOME high quality corporate debt, which works great for anyone who isn't junk status, but look at all the companies that are sliding into junk status now! United, Delta, Ford all downgraded to junk. Boeing may be close behind them. All these companies are going to have skyrocketing lending costs which could lead them straight into bankruptcy.

 

[ET180]

I won't say for others, but a slightly-tuned MACD would have you long into February; reversed two days before the big drops started, and reversed (back to long) today. And with a little work,.......

Would have to see the entire history to make conclusions and commit money. If all traders need to make a lot of money is an MACD, then why do funds spend so much money on much more expensive research to make investment decisions?

 

[jghall00]

I don't think so.....Market Cap/GDP (Buffett Indicator), CAPE ratio were very high before this virus even hit. Add to that an absolutely insane level of corporate debt, and the market wasn't even close to fairly valued. You're going to see bankruptcies and defaults on high yield debt this year which is going to further drop this market.

Listen - the Fed has already said they are backstopping SOME high quality corporate debt, which works great for anyone who isn't junk status, but look at all the companies that are sliding into junk status now! United, Delta, Ford all downgraded to junk. Boeing may be close behind them. All these companies are going to have skyrocketing lending costs which could lead them straight into bankruptcy.

That's what I thought too, and I figured the debt downgrades would exacerbate the downturn. So what am I missing in the current market? I anticipated expectations for a stimulus to push the market higher last week. What is the market anticipating right now, a quick return to normalcy? People don't spend when they are worried, even if they are collecting unemployment.