Where did the bear market go?

[Specterx]

So you think a worldwide pandemic and complete shutdown of 75% of the earths population and world economies only merits a 3 week bear market?
After the “peak” illness hits its not like everything will return back to normal.

I think the 11 year bull has really really distorted what people expect from the stock market.
It’s not supposed to be free money.
You have to take some lumps along the way, and 3 weeks every 11 years isn’t enough.

The issue isn't whether these events are dramatic, unprecedented, historic etc - obviously they are, the issue is what's priced in vs. the way events are likely to actually unfold. It's just basic logic that however bad the hits to GDP, earnings and so on turn out to be, the market isn't going to tank another 30% if the news is "as bad as expected". Rather it would have to be meaningfully worse than expected, and at this point Q2 is already a cataclysmic writeoff.

The government has pretty much taken over the credit markets, and the banking system is solid, so there doesn't seem to be much chance of a bearish shock coming from there (at least for the time being). So, the bear case rests on lockdowns stretching into Q3 and/or people failing to resume "normal" behavior by late June, even after restrictions are formally lifted.

Possibly the lockdowns go on longer than expected, but once they end I think restaurants, service industries and so on will see business return to normal practically overnight, and indeed will see a surge of pent-up demand at the start. Personally we've already rescheduled travel plans that we were forced to cancel, to the July-September timeframe.

 

[KCalhoun]

Let’s see how we got to the “end of the bear market” so quickly over the last 5 trading days-

1- As oversold a market as any point in history
2- Pension rebalancing with largest Stock $ amount to buy on record
3- End of month window dressing
4- End of qtr window dressing
5- THREE massive liquidity injection/bailout packages.

After tomorrow 1-4 will be over.

The market is handing you a great short opportunity on a silver platter.

Absolutely right - like I said over the weekend, dcb early this week to be followed by massive selling within a week.

Thursday unemployment numbers will spark Thursday Friday selling. I'm scaling back into SQQQ SDOW VXX TVIX etc.

The world's biggest stock market selloff is just beginning. It's a common pattern to see bull traps, relief rallies in bear markets that are short lived.

#bearseatbulls

 

[Atikon]

Curious why ppl compare this to other crisis? The FED is buying up debt and providing liquidity to secondary lenders, also they hinted at buying up Equities (they even got the permission from the FED Board of Directors). So Liquidity risk reduced, reduces the deleveraging spiral, debt buying program eliminates the default risk (increases Sovereign Default risk, granted) and if the FED starts buying Equities, the Investor is even spared the Business risk.

Given that the FED said QE to Infinity and beyond It's like the Greenspan Put on Steroids.

IMO shorting the market is betting against the FED in this Situation.

 

[dozu888]

Curious why ppl compare this to other crisis? The FED is buying up debt and providing liquidity to secondary lenders, also they hinted at buying up Equities (they even got the permission from the FED Board of Directors). So Liquidity risk reduces the deleveraging spiral, debt buying program eliminates the default risk (increases Sovereign Default risk, granted) and if the FED starts buying Equities, the Investor is even spared the Business risk.

Given that the FED said QE to Infinity and beyond It's like the Greenspan Put on Steroids.

IMO shorting the market is betting against the FED in this Situation.

watch these morons completely ignore your logic and keep pulling numbers out of their ass

 

[KCalhoun]

Curious why ppl compare this to other crisis? The FED is buying up debt and providing liquidity to secondary lenders, also they hinted at buying up Equities (they even got the permission from the FED Board of Directors). So Liquidity risk reduces the deleveraging spiral, debt buying program eliminates the default risk (increases Sovereign Default risk, granted) and if the FED starts buying Equities, the Investor is even spared the Business risk.

Given that the FED said QE to Infinity and beyond It's like the Greenspan Put on Steroids.

IMO shorting the market is betting against the FED in this Situation.

Good point, so I'm just scaling into inverses small. Every recent time the fed tried to prop up markets this year it failed, though it's impossible to predict with latest news.

The big picture pandemic and record unemployment will outdo the fed artificial pump efforts, I think.

But hey if markets bounce I'll trade TQQQ like I did today..... exciting times

 

[madbrain]

My $1.5M portfolio that was about 70/30 and turned into $1.25M. I haven't sold any of the stock positions. But I do believe the rally in the last week is a dead cat bounce. I sold about $110k of bonds in my Roth IRA and tipped my toes at some bearish bets last Thursday. I'm waiting for experts to tell me how stupid these are. I think we will retest lows or close to that, and they will pay off nicely. No idea how soon, that's why I bought them 6 months out. They aren't day trades.

 

[dozu888]

My $1.5M portfolio that was about 70/30 and turned into $1.25M. I haven't sold any of the stock positions. But I do believe the rally in the last week is a dead cat bounce. I sold about $110k of bonds in my Roth IRA and tipped my toes at some bearish bets last Thursday. I'm waiting for experts to tell me how stupid these are. I think we will retest lows or close to that, and they will pay off nicely. No idea how soon, that's why I bought them 6 months out. They aren't day trades.

yes you are very stupid.

change to 100% QQQs.

 

[kashirin]

The issue isn't whether these events are dramatic, unprecedented, historic etc - obviously they are, the issue is what's priced in vs. the way events are likely to actually unfold. It's just basic logic that however bad the hits to GDP, earnings and so on turn out to be, the market isn't going to tank another 30% if the news is "as bad as expected". Rather it would have to be meaningfully worse than expected, and at this point Q2 is already a cataclysmic writeoff.

The government has pretty much taken over the credit markets, and the banking system is solid, so there doesn't seem to be much chance of a bearish shock coming from there (at least for the time being). So, the bear case rests on lockdowns stretching into Q3 and/or people failing to resume "normal" behavior by late June, even after restrictions are formally lifted.

Possibly the lockdowns go on longer than expected, but once they end I think restaurants, service industries and so on will see business return to normal practically overnight, and indeed will see a surge of pent-up demand at the start. Personally we've already rescheduled travel plans that we were forced to cancel, to the July-September timeframe.

The only thing is priced in is the Fed pump
At current levels stock are overpriced even without virus

If you think everything back to normal overnight you re delusional.

Most things will change forever. Many will not recover for many years. Some will never recover

Without the Fed this stock market should be under 1000. With the Fed printing maybe 2000

They can of course put any price on it. But what's the point to have non functional market with pe 40

 

[madbrain]

yes you are very stupid.

change to 100% QQQs.

I work in tech and I don't want my portfolio too correlated with my job. Also I don't have the appetite for 100% equity portfolio - never have, never will.

 

[madbrain]

They can of course put any price on it. But what's the point to have non functional market with pe 40

Try NaN P/E when E goes to 0. Or more likely, negative P/E.