The bears den

[theMKR]

but this year is election, trump would want the market to shoot to the sky no?

 

[theMKR]

Need ta experts to validate if the next support levels for the s&p500 are:
2751
2745
2739

Thanks.

Sent from HMD Global TA-1004 using GAGT

2745 no resistance at all

2739 is being tested now

 

[theMKR]

oh my 3rd option is ITM liao

i hope my last option also can ITM

 

[coolhead]

2745 no resistance at all

2739 is being tested now

i got those support numbers from investing.com

 

[theMKR]

haiz made a big big mistake.... i think my pets suck at picking stocks they just wanna eat

 

[theMKR]

now market closing seems like all shorties are buying back their positions

 

[theMKR]

zzzz i screwed up
wanted to sell tsla last minute knowning it will be pumped up, end up ibkr overwrite me to call margin, now i stuck with so many tsla (long)

 

[NewInvestor]

I suppose everyone has their story/view.

It is giving too much credit to Trump that he can cause the stock market to fall and as a result, financial conditions tighten.

Imo, it's the other way. Financial conditions tighten and hence stock markets plunge. The tightening of the financial condition is largely determined by the Fed.
Of course worsening economic outlook can cause banks to tighten corporate loans. However, worsening economic outlook meant that the economic data is already going from bad to worse and hence, the Fed can act to cut interest rates in order to promote lending and to counteract the bad economic data.

As of now, I do not see the causality that Trump wants to lower interest rates by causing the stock market to fall due to his trade war actions. But as a result of his trade war actions which cause the economic outlook to worsen and henec financial conditions to tighten, this will then cause both the stock market to plunge as well as Fed to possibly lower interest rates.

The bottomline is that rates will be cut and the market has already anticipated that. The question is when and by how much.

 

[coolhead]

The bottomline is that rates will be cut and the market has already anticipated that. The question is when and by how much.

It's not my bottomline for now

 

[DukeCS33]

The bottomline is that rates will be cut and the market has already anticipated that. The question is when and by how much.

The Fed need not give in to Market's anticipation. (imho, they would not give a hoot about the stock market unless there is a massive selloff... this current decline has been rather orderly) And the bar to cut is going to be rather high. Relative to the rest of the World, the US is still growing, employment is healthy and inflation is just flirting the 2% threshold which is deemed as warranting a hike. The Market anticipates a slowdown from the tradewar and higher tariffs would increase cost - that is inflationary in itself. Cutting rates may push the USD lower and stroke imported inflation.

 

[revhappy]

I suppose everyone has their story/view.

It is giving too much credit to Trump that he can cause the stock market to fall and as a result, financial conditions tighten.

Imo, it's the other way. Financial conditions tighten and hence stock markets plunge. The tightening of the financial condition is largely determined by the Fed.
Of course worsening economic outlook can cause banks to tighten corporate loans. However, worsening economic outlook meant that the economic data is already going from bad to worse and hence, the Fed can act to cut interest rates in order to promote lending and to counteract the bad economic data.

As of now, I do not see the causality that Trump wants to lower interest rates by causing the stock market to fall due to his trade war actions. But as a result of his trade war actions which cause the economic outlook to worsen and henec financial conditions to tighten, this will then cause both the stock market to plunge as well as Fed to possibly lower interest rates.

I think we both are saying the same thing. If stock markets remain elevated, whether it is cause or effect, the Fed won't have reason to cut rates, unless other things break. In Oct 2018, the credit markets froze as bond yields shot up and there was not a single high yield issuance and buy backs had stopped, which prompted Powel to step in with his 'patience'. Now all that has reversed.

 

[revhappy]

zzzz i screwed up
wanted to sell tsla last minute knowning it will be pumped up, end up ibkr overwrite me to call margin, now i stuck with so many tsla (long)

Did you sell OTM Calls?

 

[coolhead]

I think we both are saying the same thing. If stock markets remain elevated, whether it is cause or effect, the Fed won't have reason to cut rates, unless other things break. In Oct 2018, the credit markets froze as bond yields shot up and there was not a single high yield issuance and buy backs had stopped, which prompted Powel to step in with his 'patience'. Now all that has reversed.

I maintain that stock market forces do not cause the fed to cut rates.

Sent from HMD Global TA-1004 using GAGT

 

[DukeCS33]

The S&P500 may have declined 0.28% last night but looking at the breadth of the market, stocks that advanced outnumber those that declined 2:1. So I think we may be looking at an upside test unless there are more headline news driving further risk aversion. I am going to watch for reversals and start dipping into some very short term swing longs.

 

[Trader11]

The S&P500 may have declined 0.28% last night but looking at the breadth of the market, stocks that advanced outnumber those that declined 2:1. So I think we may be looking at an upside test unless there are more headline news driving further risk aversion. I am going to watch for reversals and start dipping into some very short term swing longs.

Yes. But this is start of the month where funds are transacting. Hence more movement than usual.

 

[DukeCS33]

Yes. But this is start of the month where funds are transacting. Hence more movement than usual.

Not sure about that seasonality factor. I am approaching this from a short term trading mentality. I see stocks getting oversold and based on the factors I consider, I think it is poised to test topside resistance at 2800.

A countertrend rally may be coming.... this would be an opportunity for a 3 to 5 day swing long trade on stocks that are still maintaining strength, outperforming the SP index and still hugging their longer term uptrend.

 

[DukeCS33]

Yield curve inversion starting in May is a sign of coming recession in about 1 year time & it has about 75% prediction accuracy. Let's see whether it is true again this time.

I do not see yield curve inversion - not when the 2s 10s are still positive. Also, I am viewing inversions with a big dose of scepticism for now.... if there is inversion, it was manufactured by the Fed's recent switch to buy 10y UST instead of MBS. There has not been that high an intervention in the curves historically and so I would temper my read of yield curve inversion being a predictor of recession.
I also find it hard to believe in a recession scenario when employment is high.

 

[revhappy]

The S&P500 may have declined 0.28% last night but looking at the breadth of the market, stocks that advanced outnumber those that declined 2:1. So I think we may be looking at an upside test unless there are more headline news driving further risk aversion. I am going to watch for reversals and start dipping into some very short term swing longs.

Just 15 mins before the close, the price action was very scary. S&P500 was down about 0.75% low of the day and then it miraculously pulled back.

 

[DukeCS33]

Just 15 mins before the close, the price action was very scary. S&P500 was down about 0.75% low of the day and then it miraculously pulled back.

I think the funds see levels very oversold and hence the buy orders were executed near the close of the day. Remember, the amateurs do the opening while the close is managed by the professionals. The start of the session on a Monday is always dominated by stops and orders and I tend not to read too much into this for the initial 30mins... thereafter, I would see if there is a closure of any gaps... And would start trading the day's direction thereafter.

The breadth of the Market is very telling. And it is a ratio that I would watch for underlying strength... typically when things get oversold, I tend to watch this indicator closely to see if there may be a sign of reversal. That said, sentiment is still negative so it makes intraday trading very tricky.

 

[revhappy]

FAANGs & Nasdaq has fallen quite a bit. It looks like utilities and defensives is supporting this market now. So headline S&P500 index looks still strong at 2750, the composition of the market now is very different from how it was in Oct 2018, I think. It would be interesting to analyse how different sectors have done in this downmove.

https://eresearch.fidelity.com/eresearch/markets_sectors/sectors/sectors_in_market.jhtml