USA Stocks discussion - Part 3

[aurvandil]

BTW SPY companies derive 40%+ of their earnings overseas tio bor?
If rest of the world Recession, SPY earnings will drop also what.

Last week's economic numbers changed the complexion of everything.

The GDP decline was much smaller than expected. NFP also came in much stronger than expected. Current consensus is that if there is a slowdown in the US, it will be a very mild one. Expectations for FOMC have now shifted so that there is no rate cut for next two FOMC. For the whole year, expectations is for only 75 bps cut, starting toward the end of 2025. On inflation, the expectation is also that this will not come roaring back. FED forecast for May is that this will come in at 2.19%.

 

[DevilPlate]

Last week's economic numbers changed the complexion of everything.

The GDP decline was much smaller than expected. NFP also came in much stronger than expected. Current consensus is that if there is a slowdown in the US, it will be a very mild one. Expectations for FOMC have now shifted so that there is no rate cut for next two FOMC. For the whole year, expectations is for only 75 bps cut, starting toward the end of 2025. On inflation, the expectation is also that this will not come roaring back. FED forecast for May is that this will come in at 2.19%.

Why quote me and talk irrelevant stuff?

 

[aurvandil]

Why quote me and talk irrelevant stuff?

I have tightened the quote.

 

[DevilPlate]

I have tightened the quote.

So u mean US internal growth/consumption can offset international revenue decline?

To me it is like SPY will outperform the rest of the market by declining less according to yr reasoning?

 

[stanlawj]

So u mean US internal growth/consumption can offset international revenue decline?

To me it is like SPY will outperform the rest of the market by declining less according to yr reasoning?

You're making a terrible mistake.
Stock market =/= real economy.
Stock market is front-running the future economy that is imagined by the participants.
That imagination can change easily and we are only guessing what the majority is imagining. Your imagined future economy may not be what the majority is thinking!

 

[aurvandil]

So u mean US internal growth/consumption can offset international revenue decline?

To me it is like SPY will outperform the rest of the market by declining less according to yr reasoning?

Minus China, the tariffs are not that bad. The 10% universal is well tolerated and if it gets extended until the deals get done, we might not get a global recession. In fact we might get a boom in the rest of the world as supply chains adjust. For example Vietnam is doing well thanks to the tariffs on China. If they can get a deal of around 20 to 30% tariff while China gets stuck with what they have now, Vietnam is going to have an economic boom

 

[DevilPlate]

Minus China, the tariffs are not that bad. The 10% universal is well tolerated and if it gets extended until the deals get done, we might not get a global recession. In fact we might get a boom in the rest of the world as supply chains adjust. For example Vietnam is doing well thanks to the tariffs on China. If they can get a deal of around 20 to 30% tariff while China gets stuck with what they have now, Vietnam is going to have an economic boom

We are talking about tariff + ongoing USD devaluation
Alot of SME where got 20% profit margin?

for eg. If TW currency keep going up by another 10% will wipe out their businesses liao

 

[stanlawj]

So u mean US internal growth/consumption can offset international revenue decline?

To me it is like SPY will outperform the rest of the market by declining less according to yr reasoning?

FYI, this is my current SPY market theory and I'm trading accordingly:

No, a significant number of market players are betting that this is like 2018-like short-term correction, i.e. Trump will drop the tariffs to a lower number after the negotiations ended. The US society cannot withstand such high tariffs since reindustrialisation has barely started. The optimistic people will be betting that the future presidents (8 or 16 years later) may not even follow through completely Trump's policies (only partial reindustrialisation).

Entertainment time:


So the market may make a bounce up in the coming weeks, but this will be used by slow big money to unload more of their holdings. Slow big money have a lot of illiquid PE holdings that they can't liquidate, so they must resort to selling more liquid publicly-traded equities.

Which brings us finally to this view: we are at the start of a major bear market.... either already started, or going to start soon. Trump has significantly damaged foreign investor confidence in USA. Foreign SWFs may also need to sell their US equity holdings to get cash to fund domestic priorities in response to Trump's 10% minimum import tariffs.

In conclusion, the coming buying demand is likely to meet significant selling pressure. If Powell does nothing, financial system leverage will not increase much, then buying demand will dissipate easily.
By the time he starts cutting rates again, it will likely be too late to stop the downwards worsening economic momentum.


No bear markets are the same. If you think this bear market will be short and shallow such that one can DCA all the way till it regains ATH, then make sure you have a nice secure stable job in case it isn't.

We are giving ourselves cancer to deal with the long hair instead of just getting a haircut.

Also this:

One of the gurus I follow (Derick Tan), forecasts a bear market starting in H2 2025.
The bear market hasn't started yet, but the last push up from now till May will draw in alot of retail investors.
Trump's Liberation Day was a preview of what is to come.
@d5dude , you agree? Previously you say I'm conspiracy theorist.

Public portfolio (ETF only): https://www.etoro.com/people/timingnyou/portfolio
(stocks): https://www.etoro.com/people/dericktandt7/portfolio

 

[peachmouse]

 

[redname]

hi, asking the experts here

if a stock have been climbing for the last 6 months to +140%, is it time for it to drop?

 

[d9lives]

hi, asking the experts here

if a stock have been climbing for the last 6 months to +140%, is it time for it to drop?

ROFLMAO...

 

[DevilPlate]

Back in 1980s, USD/SGD 2.2+ sia
In 2000, 1.7+
In 2011 bottom around 1.2
today 2025 1.29

In 2030?
in 2040?

 

[ipaq4444]

GPGT

is that a pure buy put option for both instrument? are there any reason why MES is excluded?

 

[DevilPlate]

https://www.forbes.com/sites/tonyae...-treasury-bonds-to-tackle-the-us-debt-crisis/

Interesting sia

BitBonds at 1%

 

[ipaq4444]

Stilling holding onto equity futures swing long and waiting for another short-term and superficial Trump announcement (eg: "We have closed a deal with China") to spike prices up before exiting and shorting hard.

IMO, this is a bear market rally. Not a bullish reversal. Pretty bearish on US equity and bond markets (have a ZB short position from 119'24 level).

Will GLD or IAU be a good place if we are just looking to park for the time

 

[stanlawj]

Entered more shorts earlier today in ZB (bond), NQ futures earlier.

Expecting the bigger move down in both markets if my trading tea-sis is correct.

How's your short on ZB futures? UST bonds yields have been rising since May 1.

 

[davonir]

Doing well, better than my NQ shorts, which is still bouncing around and taking its time to drop. But I will expect NQ to drop once the hopium in the market has been drained. As usual, the bond market appears to be the leading indicator, while the stock market is driven by sentiment.

In the bond market, there is still lots of noise in the media that the Fed is going to have a few cuts until December. I am expecting a big move to the upside for yields and correspondingly, bonds prices to fall off a cliff. Holding onto my ZB shorts and adopting a "buy right, sit tight" approach until it reaches the big levels.

I am expecting that the Fed will be forced to intervene once the condition is right, but it is not time yet.

 

[davonir]

is that a pure buy put option for both instrument? are there any reason why MES is excluded?

Just future contracts. MES is highly correlated to MNQ most of the time. One could trade MES and MNQ separately as they have different levels, I prefer to trade either one of MNQ/MES and/or M2K (which is highly sensitive to interest rates) to make it easier to manage.

 

[stanlawj]

Sold TECS for US$1.6k. Short stonks overnight for pocket change.
Looks like BERZ is doing much better.

Long TECS (3X tech bear etf). Small amount. Hope to make $1k only during the pullback.
This market still looks like a strong bull with occasional pullbacks.

 

[stanlawj]

Doing well, better than my NQ shorts, which is still bouncing around and taking its time to drop. But I will expect NQ to drop once the hopium in the market has been drained. As usual, the bond market appears to be the leading indicator, while the stock market is driven by sentiment.

In the bond market, there is still lots of noise in the media that the Fed is going to have a few cuts until December. I am expecting a big move to the upside for yields and correspondingly, bonds prices to fall off a cliff. Holding onto my ZB shorts and adopting a "buy right, sit tight" approach until it reaches the big levels.

I am expecting that the Fed will be forced to intervene once the condition is right, but it is not time yet.

IMO, shorting QQQ or SPY is worthless pursuit. The only good time to short them is when there is exogenous shock event like Liberation Day or Covid.