The bears den

[DukeCS33]

Wait for some fake trade news by Trump admin to arrest the fall. Something as vague as, 'we will have a trade deal sooner than you think'. Sooner than who thinks? I think it will happen in 10 years, so it may happen in 5 years. But, dumb markets can be manipulated.

But I think even if we have a trade deal right now, remove all tariffs and go back to Pre Trump status, the economy won't improve so fast, so it is foolish of markets to keep bidding up in the hope of a deal.

No. The market is not foolish. It could be somethingelse that you or I may not have picked up. There has already been so many false starts, tweets of an imminent deal but yet, we have regressed since the first tweet. The wall of liquidity out there is keeping the Markets from falling unless there is a piece of news of shock value. We had that last night via record low ISM numbers but I think the effect may not last unless we have follow through by way of more bad news.

 

[revhappy]

No. The market is not foolish. It could be somethingelse that you or I may not have picked up. There has already been so many false starts, tweets of an imminent deal but yet, we have regressed since the first tweet. The wall of liquidity out there is keeping the Markets from falling unless there is a piece of news of shock value. We had that last night via record low ISM numbers but I think the effect may not last unless we have follow through by way of more bad news.

I wonder how does liquidity help in driving up asset prices. People can make use of the liquidity to add leverage. Cost of money is cheap. But that alone is not enough to keep asset prices elevated. I think it is more to do with TINA. People who have stocks are not spooked enough to sell and people earning new money are also putting it into ETFs regardless of the price.

So I think it is just a matter of confidence crisis. If people lose confidence that their stocks will be worth higher in the future, they will then sell regardless of the price.

 

[DukeCS33]

I wonder how does liquidity help in driving up asset prices. People can make use of the liquidity to add leverage. Cost of money is cheap. But that alone is not enough to keep asset prices elevated. I think it is more to do with TINA. People who have stocks are not spooked enough to sell and people earning new money are also putting it into ETFs regardless of the price.

So I think it is just a matter of confidence crisis. If people lose confidence that their stocks will be worth higher in the future, they will then sell regardless of the price.

The liquidity needs to be deployed somewhere and in an environment where yields are dropping, anything that yields slightly more would attract that liquidity. eg if I can borrow at 1%, and an alternative investment would yield me 2% within my risk profile, I would borrow and hit that investment. And this can be an investment that may not make sense or look attractive in a higher interest rate environment. Add the multiplier effect on this line of thought and you can get a very potent force driving capital and asset markets. So unless there is a strong risk that the asset would decline in value, it would not shake away this default mode. Add computer trading, quants, passive investments, algo and the internet age disseminating information at must faster speed than before, you could get a very toxic force. These type of environment is very tough on the permabear. For now, I think the risks and wall of worry is building up - but would it then transcend into fear that drives markets lower? I think we are not at the tipping point as yet. But this make it hard for the position and swing trader / investor as we have wide range volatile markets and not one that is trending.

 

[revhappy]

Nice tweet thread about WeWork, must read. This whole thing is going to implode guys. Softbank, Vision fund. In 2008 crash, Softbank lost 99% of its value. They didnt learn anything from it.

https://twitter.com/profgalloway/status/1179149677167566848

 

[revhappy]

 

[revhappy]

2 full percentage points down. Still a long way to go, this time I hope it is proper crash and no false alerts please.

 

[revhappy]

What's happening with the markets?

Revhappy has gone silent.

You shouldn't have recalled me, see I brought the bear along with me

 

[roflolmao]

Being a bull now!

Buy no scared, scared no buy!
Be greedy when others are fearful!
Time in the market, beats timing the market!
Dollar cost averaging!
Every second you spend waiting is opportunity cost!
Time and tide waits for no man!
You snooze you lose!
No one ever got rich waiting!
S&P has historically increased on an average every year!

 

[Trader11]

For such an accumulation exercise, the big insto boys would not target a mere 30%. I guess you are looking at the more immediate picture while I was looking at a much longer timeframe.

Downtrend now for this ATVI. Support is broken

 

[MrHighlander]

Still far from correction

Curious - what do you plan to buy ?

2 full percentage points down. Still a long way to go, this time I hope it is proper crash and no false alerts please.

 

[DukeCS33]

Downtrend now for this ATVI. Support is broken

I hold a different view. Last night's price action for ATVI is bullish. The market sold off and ATVI participated initially but look at the strong close to push above the opening. Volume was higher than average and it shows that the bulls are still buying this and taking advantage of the market sell off to accumulate. It also bounced and closed above the prior resistance line that was broken.

 

[Trader11]

I hold a different view. Last night's price action for ATVI is bullish. The market sold off and ATVI participated initially but look at the strong close to push above the opening. Volume was higher than average and it shows that the bulls are still buying this and taking advantage of the market sell off to accumulate. It also bounced and closed above the prior resistance line that was broken.

I agree with you. There were buyers later on that retraced the price back.

 

[DukeCS33]

I agree with you. There were buyers later on that retraced the price back.

I seldom trade Wcykoff's setup as I do not typically trade breakouts. Typically, the breakouts fly after a valid breakup signal. This is one of the few that has a retest that makes it a safer entry and is more inline with my inclination to trade retracements. Anyways, readers need to do their own diligence. I am planning an entry when we have a weak volume or successful supply test.... heavy candles suggest that there is still some overhead supply.

 

[DukeCS33]

Bears, please do not get carried away with the pessimism that has been amplified by the media. The Manufacturing ISM is only one data point and even though we have some writings about slower hiring from yesterday's private payroll numbers, it does not tell the full picture. The recession case is only made because ISM was at a 10 year low print. We all know that this slowdown in manufacturing (further exaggerated by trade war) has been ongoing. The hiring numbers are still at trend and does not point to a drop that may lead to a recession. Tonight's ISM service numbers would be more important as it is a larger part of the US economy and if we have a good print with supporting NFP numbers, the sentiment may well reverse. There is always a case of viewing a glass half full or half empty.

 

[revhappy]

Still far from correction

Curious - what do you plan to buy ?

I think this is not the time to think what to buy. This is the time to think what to sell.

People will have the bad memories of December last year and fear that a repeat of that will happen again this year. Typically people like retirees sell in December for their expenses for the next year. So those kind of guys will not want to wait until December and start selling now.

Add to that Brexit, HK protests, China trade war, EU trade war, middle east tensions, oil crashing and Saudis looking to raise cash from Aramco, general global PMIs all falling with US being the last and hardest to fall, Trump impeachment and all energy of Trump admin will be spent on fighting the impeachment.

What do you have? Still thinking to buy?

 

[Shiny Things]

Nice tweet thread about WeWork, must read. This whole thing is going to implode guys. Softbank, Vision fund. In 2008 crash, Softbank lost 99% of its value. They didnt learn anything from it.

Which “whole thing” is going to implode?

Even if We and Wag are toast (and I think they are), the end result is just going to be that Vision Fund takes an entertainingly large write down. And given that Vision Fund is >50% Saudi PIF money, it really couldn’t happen to a nicer bunch of people.

 

[Shiny Things]

2 full percentage points down. Still a long way to go, this time I hope it is proper crash and no false alerts please.

What’s your definition of a “proper crash”—when are you going to start buying? Or are you shorting the SPX all the way to zero?

 

[Trader11]

I seldom trade Wcykoff's setup as I do not typically trade breakouts. Typically, the breakouts fly after a valid breakup signal. This is one of the few that has a retest that makes it a safer entry and is more inline with my inclination to trade retracements. Anyways, readers need to do their own diligence. I am planning an entry when we have a weak volume or successful supply test.... heavy candles suggest that there is still some overhead supply.

This is interesting as there is some commonalities in our methods. But we are getting too technical for this thread. Wanna to create a specialized thread for such methodology.

 

[Trader11]

What’s your definition of a “proper crash”—when are you going to start buying? Or are you shorting the SPX all the way to zero?

Crash is a stupid word. I would say drawdown of 30-50%

 

[revhappy]

What’s your definition of a “proper crash”—when are you going to start buying? Or are you shorting the SPX all the way to zero?

It is all about risk/reward. Given all the risks out there, S&P500 is just few percentage points away from ATH. This tells that people are still positioned optimistically. The best returns are made not when people are positioned optimistically. It is when people are selling like an armegedon is coming. You think it will never happen or that we cannot time it. But history shows that it happens when people least expect it.