2020 market expectations and positioning

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Trader11

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DukeCS33 said:
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.
Click to expand...

I see a U shape. Only after Trump election then market gonna rally. That coincides with one year of coranavirus
 
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Majestic12

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DukeCS33 said:
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.
Click to expand...

Does fear drive the market declines or do the market declines drive fear? I think they are in a reflexive loop in which the spiral has started.

Consumer not spending = companies slashing earnings guidance = drop in equity prices and asset values = consumer not spending due to further drop in confidence = etc.
 
coolhead

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goro avg price: 3.25
goro current price: 4.60

k92 avg price: 2.32
k92 current price: 3.66

struggling to think if i should sell... if i sell, I'm 100% cash liao...
but these are good companies with increasing gold output this year... yesterday's onslaught gold miners are not spared the trauma.

Posted from PCWX using Redmi K20 Pro
 
Trader11

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Majestic12 said:
Does fear drive the market declines or do the market declines drive fear? I think they are in a reflexive loop in which the spiral has started.

Consumer not spending = companies slashing earnings guidance = drop in equity prices and asset values = consumer not spending due to further drop in confidence = etc.
Click to expand...

In reality, it is liquidity driving the market. The supply and demand. Everything else is secondary....
 
SpeedingBullet

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revhappy said:
I have another 100k to allocate. If STI falls 5% more, I allocate 50k. If STI falls 10% more, I allocate another 50k. Then I am done.
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LOL same, i don't really know what else to buy in Singapore, so I'm just boosting my ES3.
 
revhappy

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I think most of this is just Options driven selling. Since last august as markets started moving up, people kept buying calls and selling puts, the market makers have to hedge their position by going long into equities. This activity went through the roof in Jan as S&P 500 crossed 3200. Options are by definition leveraged plays. So as the corona virus news hit, people start unwinding their bullish options positions. So market makers now have to sell the underlying to keep their risk neutral. All this is happening so fast so the downside is accentuated.
 
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vix.jpg


Vix during GFC was 79. Now is 39. Two to three years from now, we will look back and ask why we didn't buy during this period. :s13:
 
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Majestic12

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athulican said:
vix.jpg


Vix during GFC was 79. Now is 39. Two to three years from now, we will look back and ask why we didn't buy during this period. :s13:
Click to expand...

You can always buy equities when the RSI on the monthly chart goes into oversold territory. That has happened only once - back in Q3 2009.
 
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DukeCS33

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athulican said:
vix.jpg


Vix during GFC was 79. Now is 39. Two to three years from now, we will look back and ask why we didn't buy during this period. :s13:
Click to expand...

Hindsight trading is always perfect. :s13::s13::s13:

I think the big boys are waiting for the dip buyers to come in and then drive prices even further below. Everyone is calling this officially a correction but I think it will morph into a bear market. This is still early stage selling.

Look at the redemptions of SPY ETF:

https://www.etf.com/etfanalytics/etf-fund-flows-tool

The FOMO crowd is getting hit. The DCA players would be next and their conviction would be challenged.
 
coolhead

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DukeCS33 said:
Hindsight trading is always perfect.
:s13:
:s13:
:s13:

I think the big boys are waiting for the dip buyers to come in and then drive prices even further below. Everyone is calling this officially a correction but I think it will morph into a bear market. This is still early stage selling.

Look at the redemptions of SPY ETF:

https://www.etf.com/etfanalytics/etf-fund-flows-tool

The FOMO crowd is getting hit. The DCA players would be next and their conviction would be challenged.
Click to expand...



assuming this is a bear market on the US economy, the recession should start in 6 months time in US. give or take 2 months.
the lead time from yield curve inversion in september last year to August-september this year is about 1 year in this case...

hmm...

Posted from PCWX using Redmi K20 Pro
 
coolhead

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Majestic12 said:
You can always buy equities when the RSI on the monthly chart goes into oversold territory. That has happened only once - back in Q3 2009.
Click to expand...



then you'll be prompted to buy 2 days ago...

Posted from PCWX using Redmi K20 Pro
 
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