The bears den

[[M]aiev]

To cut long story short, I see this dip as a buying opportunity.

Gotta apply same rules which happened at last year Dec !

 

[[M]aiev]

Those people who claimed low interests rates causing assets bubbles will just remain delusional.

I will probably agree in the short term.

In the longer term, stocks will remain attractive because of the higher expected returns.

You just need to adjust your allocation accordingly.

Just look at this 10Y chart. I doubt the rate will go back to like those in 1980s.

https://fred.stlouisfed.org/series/IRLTLT01USM156N

low interest rate will not cause assets bubbles. It is caused because people keep buying. If interest rate hit like double digits, then it is gotta to be interesting.

As for now, I am waiting for index to go down at least 10%.

 

[Mecisteus]

Just a fun fact.

I called for a max of 20% correction in S&P500 last year.

https://forums.hardwarezone.com.sg/116945480-post179.html

And you know how much S&P500 had corrected till the bottom of Dec 2018.

This time around, I expect a max 8% correction.

Again this is just for fun only.

DYODD!

 

[coolhead]

I think Powell has just dug a very deep hole for the Fed. He is trying to placate all stakeholders but leaving none satisfied with his actions.
On the one hand, Trump and the Market is demanding for rate cuts and a rather aggressive easing path. He fell short of this. On the other hand, there has been increasing clamor from economists and top officials including 2 Fed voters that the rate cut is not necessary and by delivering one cut and dropping hints that it may be a one off, he has not amply placated this group.
I guess Powell must have been in a difficult situation but I think he should just have stuck on to a no rate cut path and not u turn from this position that was communicated to the markets just some 3 months ago. That way, the Fed's credibility and independence would have remained intact.

I suspect that the Markets, both bonds and equities would be sending more signals to tell Powell that his decision may not be the right one and Trump would add on to the political pressure. So the Fed may well be fighting the market from here and their credibility take a further hit if they were to cave in if economic data does not back up such a case.

Last night's sell off was on the back of the heaviest volume since 13 May. Immediate support would be at 2960 in the S&P500 and was the level that it bounced off against overnight. Unless we have good news from the Trade front, the Market would be unravelling the aggressive rate cut path and we may see the downside tested again. There is potential for a heavier correction from here if the Trade talks breakdown again. However, against a backdrop of excess liquidity, there would be ready bargain hunters at major support levels and one should not get carried away with shorting the market.

For long term investors, they may well await better levels to scoop up some bargains. Traders may find the increased volatility a welcome but need to take quick profits as the bearish turn in sentiments would be met with demand from the backdrop of excess liquidity. I have traded more defensively as directionally, I have been quite conflicted into the leadup to the FOMC meeting. Stops were raised to entry point at the earliest opportunity as market traded sluggish then. Now, I would be more inclined to trade short for my intraday but it depends on the opportunities presented. Good luck!

I don't think he's trying to placate any shareholders. His justifying for rate cut is low inflation rate and external factors such as slowing global economy and trade tensions impact on US manufacturing sector.
Increased volatility was awesome yesterday though. Hedge abit of my gold losses with uvxy play.
Sent from HMD Global TA-1004 using GAGT

 

[theMKR]

so fed cut rates, means bears died like shyt?

 

[churnmaster]

I think Powell has just dug a very deep hole for the Fed. He is trying to placate all stakeholders but leaving none satisfied with his actions.
On the one hand, Trump and the Market is demanding for rate cuts and a rather aggressive easing path. He fell short of this. On the other hand, there has been increasing clamor from economists and top officials including 2 Fed voters that the rate cut is not necessary and by delivering one cut and dropping hints that it may be a one off, he has not amply placated this group.
I guess Powell must have been in a difficult situation but I think he should just have stuck on to a no rate cut path and not u turn from this position that was communicated to the markets just some 3 months ago. That way, the Fed's credibility and independence would have remained intact.

I suspect that the Markets, both bonds and equities would be sending more signals to tell Powell that his decision may not be the right one and Trump would add on to the political pressure. So the Fed may well be fighting the market from here and their credibility take a further hit if they were to cave in if economic data does not back up such a case.

Last night's sell off was on the back of the heaviest volume since 13 May. Immediate support would be at 2960 in the S&P500 and was the level that it bounced off against overnight. Unless we have good news from the Trade front, the Market would be unravelling the aggressive rate cut path and we may see the downside tested again. There is potential for a heavier correction from here if the Trade talks breakdown again. However, against a backdrop of excess liquidity, there would be ready bargain hunters at major support levels and one should not get carried away with shorting the market.

For long term investors, they may well await better levels to scoop up some bargains. Traders may find the increased volatility a welcome but need to take quick profits as the bearish turn in sentiments would be met with demand from the backdrop of excess liquidity. I have traded more defensively as directionally, I have been quite conflicted into the leadup to the FOMC meeting. Stops were raised to entry point at the earliest opportunity as market traded sluggish then. Now, I would be more inclined to trade short for my intraday but it depends on the opportunities presented. Good luck!

Welcome back Duke .. Yes, its a sell on rally for the US markets now. If we break below 2950-2960, we should see some decent sell off. What is interesting is the way the currency markets are behaving esp USD which has been rallying over the last few days. In the past, USD Index strength has lead to sell offs across asset classes, so let's see what we get over the next few days.

 

[littleredboy]

Sibei heng ytd. Went in buy gold 2am, hit my profit resistance within 5mins and I went to sleep. Morning wake up, see gold actually plummet after. Sibei heng and had a good bee hoon and kopi breakfast. Dumb luck.

 

[churnmaster]

Just a fun fact.

I called for a max of 20% correction in S&P500 last year.

https://forums.hardwarezone.com.sg/116945480-post179.html

And you know how much S&P500 had corrected till the bottom of Dec 2018.

This time around, I expect a max 8% correction.

Again this is just for fun only.

DYODD!

Congrats! You were right.

 

[d9_lives]

I will be looking at allocating to ex-US markets during weakness.

I am sure you said you'll stay away from the rigged market.
The itch is unbearable right?

 

[Trader11]

Sibei heng ytd. Went in buy gold 2am, hit my profit resistance within 5mins and I went to sleep. Morning wake up, see gold actually plummet after. Sibei heng and had a good bee hoon and kopi breakfast. Dumb luck.

Gambler.........

 

[littleredboy]

True that it was a short gamble, something tells me must be quick. Maybe 7 month gates open earlier.

Gambler.........

 

[DukeCS33]

Welcome back Duke .. Yes, its a sell on rally for the US markets now. If we break below 2950-2960, we should see some decent sell off. What is interesting is the way the currency markets are behaving esp USD which has been rallying over the last few days. In the past, USD Index strength has lead to sell offs across asset classes, so let's see what we get over the next few days.

The USD is rallying because the Fed would not be cutting rates as aggressively as priced. Probably the equity market may sell off a little as the rate cut expectations get reined in. Down the road, I would expect the markets to again price in a more aggressive rate cut and that may be the catalyst for the next cyclical upswing. The fundamentals are not exactly favoring the equity markets.... earnings recession amidst a slowdown in growth globally but the excess liquidity in the system is putting a floor to how far equity markets can correct.

 

[DukeCS33]

I don't think he's trying to placate any shareholders. His justifying for rate cut is low inflation rate and external factors such as slowing global economy and trade tensions impact on US manufacturing sector.
Increased volatility was awesome yesterday though. Hedge abit of my gold losses with uvxy play.
Sent from HMD Global TA-1004 using GAGT

Good on you. I think the current market conditions do not favor intermediate holding periods. Either take quick profits or ride it out over the long term.

 

[DukeCS33]

Duke, now the gap between US markets and rest of the world is huge. I think there are opportunities in the rest of the world now. US markets may just tread water from here.

I will be looking at allocating to ex-US markets during weakness.

I beg to differ. I still think that the liquidity would find its way back into the US markets. The US equity markets are arguably the deepest one globally and its a case of deeper and more liquid markets sucking out even more liquidity from other markets onto itself. There may be rotation play but the US markets would likely be leading the rest. Baring a US concentric crisis, I think one can do some rotation play but core allocations still need to be in the US from a liquidity flow perspective.

 

[DukeCS33]

Central Bankers don't work alone. There must be reason why Draghi and Powell didn't cut interest rate further

Probably they want fiscal policy rather than monetary policy or avoid overuse interest rate protection

There is an tacit currency war happening right under our nose now. Central banks are mindful that they do not over do monetary policy easing to the point that the currency war gets explicit and explodes.
I think fiscal would not feature unless we have a recession... EU hands are tight as the EU rules have very tight regulations around use of fiscal measures. The US has a large debt... of course one can print money but that may result in more dire consequences down the road.

 

[coolhead]

Good on you. I think the current market conditions do not favor intermediate holding periods. Either take quick profits or ride it out over the long term.

It was still a daily nett loss yesterday on my gold miner holdings. Shall see if I should uvxy again tonight. The repricing of the fed stance makes for slightly more exciting times.

Sent from HMD Global TA-1004 using GAGT

 

[[M]aiev]

Just a fun fact.

I called for a max of 20% correction in S&P500 last year.

https://forums.hardwarezone.com.sg/116945480-post179.html

And you know how much S&P500 had corrected till the bottom of Dec 2018.

This time around, I expect a max 8% correction.

Again this is just for fun only.

DYODD!

anything go beyond 20% is bear territory liao. How come is 8% ? TA or what.

Anyway for my case is I will buy if there is significant margin of safety aka % off from its high.

 

[Mecisteus]

anything go beyond 20% is bear territory liao. How come is 8% ? TA or what.

Anyway for my case is I will buy if there is significant margin of safety aka % off from its high.

Nothing technical.

Just judging based on the severity of the correction.

 

[churnmaster]

The USD is rallying because the Fed would not be cutting rates as aggressively as priced. Probably the equity market may sell off a little as the rate cut expectations get reined in. Down the road, I would expect the markets to again price in a more aggressive rate cut and that may be the catalyst for the next cyclical upswing. The fundamentals are not exactly favoring the equity markets.... earnings recession amidst a slowdown in growth globally but the excess liquidity in the system is putting a floor to how far equity markets can correct.

Well, I just hope the markets remain volatile with big intraday swings to enable us to make some money.

 

[Lasogette]

Yup, business as usual.

Yeah no script changed for now.