[WestRace]

Originally Posted by corn18

The markets have been close to all time highs for many years.

The word "crash" was used as an exaggeration, but there have been plenty of corrections. I could have made lots of money if I knew. You don't need to wait for a crash every ten years.

[WestRace]

Hm... Dow at all time high and all of a sudden the trade deal now in trouble ... this trade deal is getting to be very predictable.

Anyone cares to guess at what Dow level we hear something like "... deal back on track blah blah blah..."

[Tyga11]

Originally Posted by WestRace

Hm... Dow at all time high and all of a sudden the trade deal now in trouble ... this trade deal is getting to be very predictable.

Anyone cares to guess at what Dow level we hear something like "... deal back on track blah blah blah..."

Yeah that's why everyone should ignore the trade deal BS.

[WestRace]

The world has moved past cold war. Past nuclear arm race. Now it's the debts war - whoever manages to have more debts, wins lols.

[WestRace]

...are there still banks that are too big to fail?

https://www.marketwatch.com/story/fe...=mw_latestnews

The fact that you ask how much a Ferrari costs, and by asking is self admission of guilt. You definitely don't go into a Ferrari dealer and ask that. And the fact that you ask whether the banks are too big to fail, means there are something going on there.

The larger question is: Is AMERICA too big to fail? Hell yes.

[WestRace]

Another article predicting a severe correction. It's not wrong in theory but as always, if you don't get the timing right, then you're not right regardless.

Lots of zero interest, free for all money lately and well you have to have something or somewhere to spend these borrow funds. Probably a lot of that is in the emerging economies such as Asia and south-east Asia and so on. And some of that have gone into the so called "gig economies" that don't make that much money at the moment (Uber?). As long as there's room for these funds to go to and nobody looking, the music will keep playing. Can China keep playing? A lot of money invested and the ship has sailed and hopefully it won't be like the 2008 housing crisis. And hopefully it won't crash like the 737 MAX (which coincidentally getting a lot of orders from the emerging markets).

Will there be a day of reckoning? Will the Fed and the central banks around the world know exactly what they are doing (because they are doing the wand waving)? Can they control the money supplies such that everything balances out perfectly? I think they can control the money supplies but it's harder to control where the money go to.

Well I am drinking my coffee and getting the front seat look.

https://www.marketwatch.com/story/as...?mod=home-page

[corn18]

Originally Posted by WestRace

https://www.marketwatch.com/story/as...?mod=home-page

You lost me at marketwatch

[other_evolved]

The likelihood of a correction should be above average next year based on time alone. Historically we have seen a domestic equity correction (>10% drop in <30 days) about every 5 quarters. January will mark the start of the 5th quarter since we've last had one.

[MKSixer]

I'm sure everyone negative on the performance of the market will eventually be correct as the market is cyclical.

[bimmer456]

I wouldn't pull my money out of the market just yet seeing how things have been the last couple of days. I'm looking to triple my portfolio soon.

[Ric in RVA]

Originally Posted by bimmer456

I wouldn't pull my money out of the market just yet seeing how things have been the last couple of days. I'm looking to triple my portfolio soon.

We should start a Black Swan Death pool anyone?

Until then FOMO for all!!!!

[WestRace]

I suppose there are exceptions and there have been a few historic events with respects to the stock market crashes ... but I will approach these things as a "the house cashing in" kind of things.

Corona Virus is just an excuse. They are just trading and they need these things as a way to hype up or hype down in order to make money. Who the hell would buy Tesla anyway? Not that it's a bad company but there is no rationalization to see Tesla double its stock price in just a few days.

Beers ups! I am having a few Corona :-)

[2000cs]

Originally Posted by WestRace

I suppose there are exceptions and there have been a few historic events with respects to the stock market crashes ... but I will approach these things as a "the house cashing in" kind of things.

Corona Virus is just an excuse. They are just trading and they need these things as a way to hype up or hype down in order to make money. Who the hell would buy Tesla anyway? Not that it's a bad company but there is no rationalization to see Tesla double its stock price in just a few days.

Beers ups! I am having a few Corona :-)

No doubt there was a bit of froth in the market a week ago, but I think the selling spasms of Mon-Thu largely worked that thru, with the Corona concern as a catalyst for selling.

Friday’s sell off was more serious. The economic impact of Corona can be projected now, as airlines cut flights, businesses in China close/slow, etc. A bit of a panic sell, with continuing news of the day (CDC comments, Prez actions, news hype) contributing every time the market tried to rally a bit.

My guess is that the market has now priced in estimates that are a bit worse than midpoint, meaning there is still risk but the bias may be back to the upside. We’ll see what news develops over the weekend on Corona.

If I had more investable cash, I’d be putting in buy orders for Monday. But I like risk.

Originally Posted by 2000cs

My guess is that the market has now priced in estimates that are a bit worse than midpoint, meaning there is still risk but the bias may be back to the upside. We’ll see what news develops over the weekend on Corona.

Curious to see how Q1 earnings will eventually effect current priced in estimates. Not exactly bearish on current market conditions, but it seems likely that a dip will be inevitable once the actual figures paint a better statistical picture.

[chassis]

There was a short interview on Bloomberg Radio Friday afternoon Eastern US time where the interviewee made the case that the bull market is real. Evidence given is the market's shrugging off recent "news", corona virus included. 2019 earnings reports are flowing in.

As an example, Subaru US had a record year for unit volume sales in 2019, 3% higher than 2018, in a market where most automakers were flat or down. The consumer is strong. Residential construction is strong. Raw commodity inputs are low and stable in the near term. I can go on.

[WestRace]

Originally Posted by chassis

There was a short interview on Bloomberg Radio Friday afternoon Eastern US time where the interviewee made the case that the bull market is real. Evidence given is the market's shrugging off recent "news", corona virus included. 2019 earnings reports are flowing in.

As an example, Subaru US had a record year for unit volume sales in 2019, 3% higher than 2018, in a market where most automakers were flat or down. The consumer is strong. Residential construction is strong. Raw commodity inputs are low and stable in the near term. I can go on.

It sort of reminds of the dot com bubble. Just a little of good news the market will shoot up. The PE multiples are getting up there.

[WestRace]

OK, here is the moral/ethical question. Should the Fed step in to save the market?

People are staying home because of the Corona Virus. If the Fed steps in, it's like saying don't stay home, go out and risk getting the virus.

[2000cs]

Originally Posted by WestRace

OK, here is the moral/ethical question. Should the Fed step in to save the market?

People are staying home because of the Corona Virus. If the Fed steps in, it's like saying don't stay home, go out and risk getting the virus.

Not moral nor ethical, just financial/business/economy. At this point I don’t see what the fed can do that will matter. Supply is getting constrained, although it isn’t clear how bad. Demand is falling especially for travel (airline, hotel, cruise) but increasing for stay-at-home and health (screening, masks, etc). Fed monetary policy isn’t going to move the needle on either of those in this circumstance.

Sentiment might be an issue. Does the fed stepping in make people more concerned (since they had to step in) or less concerned (since they did)?

The market came back a lot in the last hour today. I think the Fed stays home and lets things normalize a bit. Otherwise they are telegraphing/confirming worst fears, IMO. I might feel different by Monday morning, based on what happens around the globe and in the US in particular this weekend.

[chassis]

Imagine the current e-commerce trend of shopping at home accelerating because of the virus.

Trucking and delivery companies benefit, retailers can further downsize their grossly oversized real estate footprints, consumers don't catch the flu. It's a win all around.

Separately, and remaining on topic, residential real estate remains tight. This means residential construction will continue to drive strength in the economy, for the simple reason that humans need a warm, dry place to sleep at night. Population growth combined with a tight housing market requires this. Virus or no virus.

[WestRace]

I was trying to think what's the chink in the armor with the FED QE program. I mean it works like magic - a little bit of down market but here comes the FED with their QE or interest rate cut or whatever and the stock market will just follow like rats following the piper. It has been working like a charm. It almost seems too easy - too good to be true.

But after seeing how the market reacting to the corona virus, it does show the weakness or flaw of this strategy. A little bit of an external shock, and the market will just take a dive.

If you look at the S&P, it's right at about 3000 which goes back all the way back in 2018 which acts like a support line. The S&P 500 was at exactly at 2900 on Sept 2018. Therefore, so you could say all the run up since the S&P 3000 level has been just a FED rally - that is a rally based not on fundamental but on the FED QE. You can see the flaw of this strategy.

Of course all of these also has to do with the "algo trading", but I would say most of it was caused by the FED.

On the bright side, unless the virus things will get all out of control, I think the S&P 2900 level is the bottom. And if you blink, you might miss the rally back thanks to the "algo trading". I wouldn't be surprised to see a +2000 DOW points rally :-) There are just too much cash on the side line (thanks to the FED ..... sigh ......)

[2000cs]

I know the interest rate markets have priced in a 100% probability of a 50 bps fed rate cut yet this month. However I think it is more likely we will see renewed QE to inject liquidity. I also expect a TARP or other major stimulus/bailout program (starting with airlines and hotels, cruise lines), just not sure how fast the prez will propose and Congress will act, especially since it is an election year.

[WestRace]

The stock market showing some signs of bottoming ... but then it could go lower with another headline risks.