2020 market expectations and positioning

[DukeCS33]

I hope people understand that DCA is not the magical formula. Things can still go against you no matter how low the odds are

We had 11 years of bull run and those who are doing DCA may have forgotten that DCA is a long term technique. The technique is still sound and applicable for most passive investors who do not have time to hone up their trading and investment skills and who want to invest but not pay hefty fees to fund houses or banks to buy their products. It is however a long term play and not a short term one. So the true test is when the market corrects and if people are still sticking to the discipline. For DCA to work, one needs time to compound their returns and not be blinded by short term gyrations.

 

[d9_lives]

I am really jelly with people who have a lot of cash to invest at this moment.
I bought BZUN last night and have to sit until next month.
Maybe I should liquidate my SSB...

Thanks to 2019, I am still sitting on >15% gain.
2019 was a great year.
Too bad some of you missed the gain due to fear/tried to time the market.

 

[DukeCS33]

I am really jelly with people who have a lot of cash to invest at this moment.
I bought BZUN last night and have to sit until next month.
Maybe I should liquidate my SSB...

Thanks to 2019, I am still sitting on >15% gain.
2019 was a great year.
Too bad some of you missed the gain due to fear/tried to time the market.

Are you active or passive in your investments?

 

[Majestic12]

That was why I asked how you estimate that we have reached oversold levels. If you look back at RSI and any other oscillators, they tend to hit oversold or overbought and remain at extreme levels when the underlying is just about to start trending strongly. So in a range bound market, all these indicators may be good at predicting turning points but when it comes to the start of trends, they fail miserably. And often one gets out early when the big meat is in staying with the trade.

My thoughts....

I find VSA a lot more useful in ascertaining the state of demand and supply. On the back of this, the selling pressure is still very high and potentially climatic. I am hazarding a guess that current levels may be a spot for a technical rebound or resting day for the following reasons:
1. It is Friday and cyclical profit taking days or squaring ahead of the weekend.
2. The SP has reached a level where it was the last break up level and where we had high congestion.
3. Climatic selling with volume transacted last night 2.7 times the 50day average volume.

I would need to see a technical reversal in the fractals to ascertain this though..... premarket moves do not count.

That’s because I’m a terrible trader.

The estimation was done on an intraday timeframe. I lack the guts to hold for a longer duration beyond a few nights. I went short on NASDAQ 100 at 9555, S&P 500 at 3,361 and DAX at 13,742 and covered all of them earlier this week before going everyday in to short on rebounds intraday. I remember looking at the monthly charts going parabolic and thinking this is a damn good position for a short.

If I had the guts, the profit would have been more significant. This is a character problem which I need to resolve.

Am also trading in size, not the usual $10k account. Trading is truly 99% psychology.

 

[d9_lives]

Are you active or passive in your investments?

More on passive, maybe in between.
Since beg.2019, about +/-70% of our take home pay will go to iwda/eimi regardless of the headline and then some "fun money" on individual stocks (only have tencent, jd, Baozun, Raffles med. and NIO, managed to get some of them at near bottom).
I haven't sold any yet, realized profit is zero.

 

[roflolmao]

I'm going to go in

Buy no scared, scared no buy
Be greedy when others are fearful
Time in the market, beats timing the market
Dollar cost averaging
Fundamentals have not changed
Long term, Dow Jones and s&p always increase
Every second you are not in the market, you are losing via opportunity cost

 

[feareality]

This is the moment when you save all your gems waiting for a premium gacha scout to come out. Still hoarding 100% cash, but I have my cpf funds already vested into sti

Sent from Under Your Bed using GAGT

 

[DukeCS33]

That’s because I’m a terrible trader.

The estimation was done on an intraday timeframe. I lack the guts to hold for a longer duration beyond a few nights. I went short on NASDAQ 100 at 9555, S&P 500 at 3,361 and DAX at 13,742 and covered all of them earlier this week before going everyday in to short on rebounds intraday. I remember looking at the monthly charts going parabolic and thinking this is a damn good position for a short.

If I had the guts, the profit would have been more significant. This is a character problem which I need to resolve.

Am also trading in size, not the usual $10k account. Trading is truly 99% psychology.

Maybe do not rely too much on all the common indicators and if you do, you would need to overlay an interpretation that combines other elements. If it is too obvious and easy, it is not an edge as most people will know how to use it. And the professionals with size will use this to their advantage. Once you realize this, and gain an edge, your trading psychology would improve.

Amongst the stocks that went parabolic, SPCE has retraced by some 50%. The next one to short is TSLA. There is still a lot of fat there.

 

[coolhead]

I'm still sitting out
at 43 stocks, 57 cash.

Posted from PCWX using Redmi K20 Pro

 

[DukeCS33]

I'm going to go in

Buy no scared, scared no buy
Be greedy when others are fearful
Time in the market, beats timing the market
Dollar cost averaging
Fundamentals have not changed
Long term, Dow Jones and s&p always increase
Every second you are not in the market, you are losing via opportunity cost

I beg to differ.

Fundamentals have changed.
And over the long term, fundamentals will change as economies experience cycles.

 

[limster]

S&P 500 is already close to 3000. In 2018 beginning it was
2872. So it is like 2 years of almost no return. It would be cruel for people who have been holding since 2017 if markets go below 2800.

you might say the same if STI goes under 3,000 again.

at least I can buy more and then collect dividend while waiting for recovery!

 

[hwarzoner]

Market sentiment and fundamental change already, so if keep dropping keep dca until when?

 

[Majestic12]

Maybe do not rely too much on all the common indicators and if you do, you would need to overlay an interpretation that combines other elements. If it is too obvious and easy, it is not an edge as most people will know how to use it. And the professionals with size will use this to their advantage. Once you realize this, and gain an edge, your trading psychology would improve.

Amongst the stocks that went parabolic, SPCE has retraced by some 50%. The next one to short is TSLA. There is still a lot of fat there.

I don’t use any indicators for entry, except for MA (350, 200 and to a lesser extent 50) as a gauge of levels. Purely price action (candlesticks) on various time frames. Indicators usually just confuse you.

Short Tesla via puts? Prices on these must have climbed tremendously?

 

[Majestic12]

I beg to differ.

Fundamentals have changed.
And over the long term, fundamentals will change as economies experience cycles.

In full agreement with you. The pandemic is both a supply and a demand shock. If people do not want to spend or travel, cutting rates to zero does zilch. But the market could still rally on an emergency rate cut, which could provides the impetus for a rebound and a subsequent short.

 

[Trader11]

I thought if market drop 50% you are supposed to increase your investment amount by double to DCA properly...People DCA using same amount each month or same number of units each month?

If drop 50%, go buy 4x.... The risk vs reward is different.....

 

[DukeCS33]

I don’t use any indicators for entry, except for MA (350, 200 and to a lesser extent 50) as a gauge of levels. Purely price action (candlesticks) on various time frames. Indicators usually just confuse you.

Short Tesla via puts? Prices on these must have climbed tremendously?

No just naked short for a scalping play and keep partial shorts while protecting with a trailing stop above.

 

[Majestic12]

No just naked short for a scalping play and keep partial shorts while protecting with a trailing stop above.

Thumbs up, you have more guts than me.

 

[articland05]

is Friday today...
better not to hold any positions.
over the weekend US may have more news on community spreading...that will tumble the markets on Monday

Sent from LGE LG-H990 using GAGT

 

[blue_denim24]

I'm going to go in

Buy no scared, scared no buy
Be greedy when others are fearful
Time in the market, beats timing the market
Dollar cost averaging
Fundamentals have not changed
Long term, Dow Jones and s&p always increase
Every second you are not in the market, you are losing via opportunity cost

My avg purchase price for iwda is 56. Seems it would be breached soon. I guess it makes sense to start buying adhoc then . Till then regular DCA

 

[DukeCS33]

In full agreement with you. The pandemic is both a supply and a demand shock. If people do not want to spend or travel, cutting rates to zero does zilch. But the market could still rally on an emergency rate cut, which could provides the impetus for a rebound and a subsequent short.

Excess liquidity has come to a point where it does more harm than good. At the end of the day, it would still boil down to the consumer. If this pandemic does not last beyond 6mths, I think we still have chance for a V-shape recovery but with a peak that may fall short of the recent highs.
Longer than that, we may see a longer protracted downturn.

At the end of the day, company profits would still be the main driver of the stock markets and I see a high risk that this boils over.