We will rally and then re test the bottom

[dozu888]

I think you're seeing a short term bump in sentiment. Look at all the things that have happened in the past few days. Italy's numbers are finally coming down; Our own government is talking about ways to send people back to work, and the federal government just issued a 2T stimulus package (the largest in history). Add to that the market just had the quickest and most rapid sell-off in history.

There was bound to be a relief rally.

Here's what's not captured in the rally the past few days. We haven't even begun to understand the economic impact of this shutdown. We just saw last week's unemployment numbers before the $%^& really hit the fan. More and more people (including office personnel) are going to be laid off in the next couple weeks. That is going to drag on everyone's sentiment.

We are going to start hearing rumors of bankruptcies as companies that depend on consumers for cash have evaporating balance sheets (retail, airlines, automotive, food service). After that the cash flow is going to make its way down the supply stream as the manufacturers as companies on net 30, net 60 or net 90 start failing to make payments (clothing manufacturers, oil and gas distribution, secondary and tertiary automotive suppliers, food packaging, retail food distribution).

We are only at the beginning stage of this recession, and I have a feeling it's going to be pretty painful. The best case scenario is that the US is somehow insulated from how this spreads in Europe because we all drive in cars and live farther apart. In that case, maybe we are out of this in 4 weeks. More realistically, I think we follow the trend of Italy and we have to shut down for at least 6-8 weeks.

And what happens after that? Does everyone bust out of their doors and rush back to their jobs that fired them only two months ago? Not likely.....the spigot will slowly turn on as companies try to gain some sense of normalcy after the biggest economic pause ever.

Then of course, we might have flare ups in the fall......

people are fcking brain dead.

when we had 5% treasury yes the 'normal' p/e is 15 whatever... now we have 0% rates.... where else are you gonna get returns... just answer the fcking question.

fair p/e is 50. minimum.

use the brain and think for 30 seconds please.

 

[Cuddles]

I wonder if we just need to inflate less than everyone else to win. Where will investors turn? They have nowhere to hide from the printing presses.

i suppose good 'ol redistribution of wealth by colonization/warfare is always on the table

 

[BurtBurton]

I wonder if we just need to inflate less than everyone else to win. Where will investors turn? They have nowhere to hide from the printing presses.

Gold, Anyone?

 

[ET180]

Big picture, consumer confidence and passive investing created the bubble.

Now with millions unemployed and virus deaths skyrocketing, there's not much propping up stocks but the fed..

This current bounce is a short lived dead cat bounce/short squeeze that will be overcome by massive virus death headlines next week.

Ive traded bounces TQQQ MGM PENN HTZ TLRY etc but am strong bear bias and will re-enter inverses SQQQ TVIX VXX SOXS TWM on bounces. Or TQQQ if mkt goes up... good luck all

I thought market would be weak until the death rate stops falling. Even with Fed intervention. So you're short here?

 

[farmerjohn1324]

Gold, Anyone?

Real estate?

 

[hhiusa]

We have only seen unemployment up to March 21, 2020. Things only started shutting down in most places last week. Most Americans only have savings to last 1 to 2 weeks. 1-2 weeks from the shutdown puts us at the beginning of April, i.e., rent, building leases, etc. due. Firms are still buying the dip on futures with brokers not requiring enough margin for taste. It's pretty plain to see; open a chart on Bloomberg or IB (assuming you have market data) and look at the volume on a granular level for each individual contract. Contracts have been bought at 10,000s at a time intermittently resulting is 9 figure positions that can be obliterated delta neutrality be damned. That went out the window a while ago.

2008ish
Brian Hunter - Amaranth Advisors - Gas Futures -$6.5bn loss
Jérôme Kerviel - Société Générale - European index futures - $6.95bn loss
Howie Hubler - Morgan Stanley - CDS - $8.67bn
Boaz Weinstein - Deutsche Bank - $1.74bn loss
etc.

They'll do it again and again and again. It doesn't matter what safeguards are place in normal times, people loose their heads in times like these. They think the market has reached bottom and go all in on one side.

2020
Ronin
MFA
soon to be more. June contracts will come due and even more firms will go belly-up.

The pension unfunded liabilities in California is anywhere from $990bn to $1.3 trillion. States can't print money. California only makes around $151 billion in tax revenue. There has been a net exodus of people leaving the state (only their not), they are becoming residents of Nevada or somewhere else like Wyoming, or South Dakota, but remaining California; thus, draining services. The average income of the family that fake-leaves the State is $213K, while the average income of the family that enters is around $35K. People make the argument that everybody wants to go to California and New York. This is true; however, those people are low-income or grey economy workers that can hide income from taxation through tips and the like. So while California's tax paying base is indeed increasing, the taxbase is shrinking. The tax base has been shrinking for the past 15 years except for random years in between. Add insult to injury about the coronavirus.

The IRS will be drowning in red ink.

 

[BurtBurton]

Real estate?

If inflation starts picking up, fed will finally have to raise interest rates and that will send housing prices down.

But I agree.....if you can get good cash flowing real estate in this environment, it would be a good long term investment.

 

[BurtBurton]

people are fcking brain dead.

when we had 5% treasury yes the 'normal' p/e is 15 whatever... now we have 0% rates.... where else are you gonna get returns... just answer the fcking question.

fair p/e is 50. minimum.

use the brain and think for 30 seconds please.

If you think a 50 P/E is fair, good on you. That still doesn't change the fact that you are going to see bankruptcies skyrocket as debt-laden corporations struggle to refinance debt. That means your 50 P/E stock is headed straight to zero.

Where am I putting my money? Cash, precious metals and precious metals mining.

 

[KCalhoun]

I thought market would be weak until the death rate stops falling. Even with Fed intervention. So you're short here?

Just a bit, re long inverses TVIX plus MGM ERX NUGT, mostly cash til next week

 

[ironchef]

How about earnings drop already factored in and now stimulus getting factored in. If corona virus let’s up what do you think will happen? The panic has already subsided. I can tell by comparing grocery shopping yesterday to 3 weeks ago.

You are a good trader! Reminded me of Peter Lynch.