forums

Off-Topic Stock Market & Crypto Discussion

Advertisement
We are headed toward an implosion in the debt market (the 10 year yield is increasing at an alarming rate). The stock market will crater shortly after the debt market implosion.
 
Empirical Cane said:
Obviously market in irrational freefall now.

What signs do we look for as to a turn around?

Understandably that could be months/years away.
Click to expand...
Remember that if I knew those answers, I'd be a billionaire now, but its a series of factors that you start piercing together. BTW, I dont believe the markets current behavior is irrational, last years was irrational due to huge eff ups by the Fed and Admin.

Some of what I am looking for include but are no limited to:

Longer term Interest rates - when they are start falling, the bond market is flashing recession, which at some point, the Fed will agree and stop raising and maybe lowering.

Technicals - we easily blew through 3800, so we are possibly/likely going down to 3500, maybe 3200. When a support finally holds, that is a positive.

The historical norm is for a weak summer and then a strong Q4 forward. With all of the negatives now, that seems like a likely pattern this year.

Similarly, midterm years tend to be weaker in the market, and this year is obviously no different.

Remember that its darkest before the dawn, so for a bottom, you generally want to see a panic sales day, huge downside with a sky high vix.

Psychology is hugely important; as a consumer or investor, you want to think/believe better times are ahead. A lot of economists and investors think the Fed really effed up, and more importantly, is perhaps not up to the task at hand. They need to change that perception, so tomorrow is critical. I could see a 2-3% or more move in either direction.

The administration has been way behind as well, and has thus far talked a much better game than actually done anything. If they are really serious about inflation, stop talking about more spending, and freeze/cancel/delay any non critical spending. That will also ease part of the shortage of workers and materials. They also need to address the energy and food inflation, those arent going away, in fact they are going to get worse.

Hope that wasnt too depressing.
 
SpikeUM said:
Remember that if I knew those answers, I'd be a billionaire now, but its a series of factors that you start piercing together. BTW, I dont believe the markets current behavior is irrational, last years was irrational due to huge eff ups by the Fed and Admin.

Some of what I am looking for include but are no limited to:

Longer term Interest rates - when they are start falling, the bond market is flashing recession, which at some point, the Fed will agree and stop raising and maybe lowering.

Technicals - we easily blew through 3800, so we are possibly/likely going down to 3500, maybe 3200. When a support finally holds, that is a positive.

The historical norm is for a weak summer and then a strong Q4 forward. With all of the negatives now, that seems like a likely pattern this year.

Similarly, midterm years tend to be weaker in the market, and this year is obviously no different.

Remember that its darkest before the dawn, so for a bottom, you generally want to see a panic sales day, huge downside with a sky high vix.

Psychology is hugely important; as a consumer or investor, you want to think/believe better times are ahead. A lot of economists and investors think the Fed really effed up, and more importantly, is perhaps not up to the task at hand. They need to change that perception, so tomorrow is critical. I could see a 2-3% or more move in either direction.

The administration has been way behind as well, and has thus far talked a much better game than actually done anything. If they are really serious about inflation, stop talking about more spending, and freeze/cancel/delay any non critical spending. That will also ease part of the shortage of workers and materials. They also need to address the energy and food inflation, those arent going away, in fact they are going to get worse.

Hope that wasnt too depressing.
Click to expand...
Real good write up.
 
SpikeUM said:
Remember that if I knew those answers, I'd be a billionaire now, but its a series of factors that you start piercing together. BTW, I dont believe the markets current behavior is irrational, last years was irrational due to huge eff ups by the Fed and Admin.

Some of what I am looking for include but are no limited to:

Longer term Interest rates - when they are start falling, the bond market is flashing recession, which at some point, the Fed will agree and stop raising and maybe lowering.

Technicals - we easily blew through 3800, so we are possibly/likely going down to 3500, maybe 3200. When a support finally holds, that is a positive.

The historical norm is for a weak summer and then a strong Q4 forward. With all of the negatives now, that seems like a likely pattern this year.

Similarly, midterm years tend to be weaker in the market, and this year is obviously no different.

Remember that its darkest before the dawn, so for a bottom, you generally want to see a panic sales day, huge downside with a sky high vix.

Psychology is hugely important; as a consumer or investor, you want to think/believe better times are ahead. A lot of economists and investors think the Fed really effed up, and more importantly, is perhaps not up to the task at hand. They need to change that perception, so tomorrow is critical. I could see a 2-3% or more move in either direction.

The administration has been way behind as well, and has thus far talked a much better game than actually done anything. If they are really serious about inflation, stop talking about more spending, and freeze/cancel/delay any non critical spending. That will also ease part of the shortage of workers and materials. They also need to address the energy and food inflation, those arent going away, in fact they are going to get worse.

Hope that wasnt too depressing.
Click to expand...
 
Advertisement
I put in an order for the VIX because whatever the Fed does, it should tank the mkt...lol
 
mr.h said:
I put in an order for the VIX because whatever the Fed does, it should tank the mkt...lol
Click to expand...

My suggestion for language would be a 100 bps hike, with the suggestion of another 100 bps hike at the next meeting, with a strong statement that they are front loading hikes to tame the beast. They need to show that they are taking inflation far more seriously than they have in the past, and stop with the soft landing, dual mandate crap.
 
SpikeUM said:
My suggestion for language would be a 100 bps hike, with the suggestion of another 100 bps hike at the next meeting, with a strong statement that they are front loading hikes to tame the beast. They need to show that they are taking inflation far more seriously than they have in the past, and stop with the soft landing, dual mandate crap.
Click to expand...
You may be right, but Powell said he would not go above 50 bps., so maybe he goes with more hikes than originally planned.
Higher mortgage rates are going to slow the housing market, which should help too. The Fed was blindsided by the last inflation report, so who knows.
 
Last edited:
Advertisement
A guy I follow says .75 and a market tank is buy time. ANYTHING else is a hold.

Opinions?
 
Advertisement
Bird4um said:
A guy I follow says .75 and a market tank is buy time. ANYTHING else is a hold.

Opinions?
Click to expand...
We have seen this recently. The market reacts one way upon the Fed announcement and then goes full 180 deg the next trading day. The Fed is putting a ceiling on this market and we won’t see the January highs until long after the Fed calls off the dogs. In my opinion, wait for the DOW to dip a bit more into the 20 thousands before bargain hunting.
 
Going back to a point I made earlier, you dont fight Fed, so at a point in time that they are both raising and doing QT, its simply not a good idea to add risk.
 
In my earlier summary, I mentioned that one has to have confidence in the folks in charge to change the psychology. The article below shows the administration is playing the blame game and not serious about inflation.

Edit: To explain financially and not politically, two of the biggest ways inflation hurts is food and energy. I have seen zippo on what the plans are to grow domestic agriculture, which will be the next big crisis. On Energy, if you dont allow domestic production to increase, oil only has one way to go and that is up. That adds to inflation, which forces the Fed to hike even more, which will cause a deeper recession and possibly stagflation.

www.cnbc.com

Biden tells oil companies in letter 'well above normal' refinery profit margins are 'not acceptable'

Biden's call comes as sky-high energy costs add to inflationary concerns across the economy.
www.cnbc.com www.cnbc.com
 
Last edited:
Advertisement
Advertisement
Back
Top