How Low Can We Go

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bloobs
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Re: How Low Can We Go

Post by bloobs »

tspwizard1 wrote:
McWinning wrote:
tspwizard1 wrote:Short the market at 2960
Yeah, I'm thinking the same thing but maybe even a bit higher like 3100. What's your downside target?
2960 is 61% back from recent low, it is going to tank there or at 50% from recent low. I think there is enough greedy uninformed people that it creeps back 61% (2960) before the buyers run out. It isn't hard to predict what is going to happen here. We are on top of the flat curve of new virus cases per day with ^1.0x transmission each day. The squeaky wheel is getting the grease and states will reopen early, market will see this as a positive sign and react. However, unadvised state early openings will increase virus transmission rates. Remember there is a delayed timer on this virus; 7 days to show symptoms, 7 days to decide whether or not to go to hospital, 10 days average in ICU (live or die). So the uptick in daily deaths from the increase in transmission won't show up for 24 days. When daily deaths go up by quite a lot, and they will, the market will swiftly downturn and the next downward leg will begin.

The downside target will be based on people's view of the economy. When a bubble bursts, a bull trend cannot happen until people feel hopeless. I've always thought that was ironic. So I will be looking at people's sentiment toward the economy. I'm thinking way way lower though. 70% off all time highs. This was the biggest artificial 'everything' asset bubble in human history that burst. The virus was just the catalyst. Mind you a terrible catalyst because a massive amount of lost jobs aren't coming back.

This is so obviously the 'back to normal phase' of a bubble. The sharp decline after this bull trap rally will be something to tell your children about. My only question is how aggressive of a short I'm placing at 2960.
If and when 2960 happens, what are you using to short with? Also, why do it all at once versus incrementally shorting on the way down to manage the risks?
Anger and intolerance are the enemies of correct understanding.
― Mahatma Gandhi

If it's a choice between a difficult truth and a simple lie, people will take the lie every time. Even if it kills them.
― Paul Murray

McWinning
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Re: How Low Can We Go

Post by McWinning »

tspwizard1 wrote:
McWinning wrote:
tspwizard1 wrote:Short the market at 2960
Yeah, I'm thinking the same thing but maybe even a bit higher like 3100. What's your downside target?
2960 is 61% back from recent low, it is going to tank there or at 50% from recent low. I think there is enough greedy uninformed people that it creeps back 61% (2960) before the buyers run out. The downside target will be based on people's view of the economy. When a bubble bursts, a bull trend cannot happen until people feel hopeless. I've always thought that was ironic. So I will be looking at people's sentiment toward the economy. I'm thinking way way lower though. 70% off all time highs. This was the biggest artificial 'everything' asset bubble in human history that burst. The virus was just the catalyst.

This is so obviously the 'back to normal phase' of a bubble. The sharp decline after this bull trap rally will be something to tell your children about. My only question is how aggressive of a short I'm placing at 2960.
If 62% retracement is your target, you don't think the recent intra-day high of 2954 counts as close enough? In which case, we won't see 2960 and you may miss the entry.

I didn't want to miss the opportunity, so I scaled into SH when S&P was as 2740 and then again at 2930. That's why i'm more comfortable waiting till 3100 for the next lot. Otherwise, I'll just keep the first two lots for the ride down.

tspwizard1
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Re: How Low Can We Go

Post by tspwizard1 »

Yeah, I'm thinking the same thing but maybe even a bit higher like 3100. What's your downside target?[/quote]

2960 is recovery 61% back from recent low, it is going to tank there or at 50% from recent low. I think there is enough greedy, uninformed, delusional people that it creeps back 61% (2960) before the buyers run out. It isn't hard to predict what is going to happen here. We are on top of the flat curve of new virus cases per day with ^1.0x transmission each day. The squeaky wheel is getting the grease and states will reopen early, market will see this as a positive sign and react. However, unadvised state early openings will increase virus transmission rates. Remember there is a delayed timer on this virus; 7 days to show symptoms, 7 days to decide whether or not to go to hospital, 10 days average in ICU (live or die). So the uptick in daily deaths from the increase in transmission won't show up for 24 days. When daily deaths go up by quite a lot, and they will, the market will swiftly downturn and the next downward leg will begin. Look at the data. MIT model predicts 52% chance of 150,000 dead by Aug 1st if we stayed locked down til June 1st (which isn't happening.)

https://covid19-projections.com/

The downside target will be based on people's view of the economy. When a bubble bursts, a bull trend cannot happen until people feel hopeless. I've always thought that was ironic. So I will be looking at people's sentiment toward the economy. I'm thinking way way lower though. 70% off all time highs. This was the biggest artificial 'everything' asset bubble in human history that burst. The virus was just the catalyst. Mind you a terrible catalyst because a massive amount of lost jobs aren't coming back.

This is so obviously the 'back to normal phase' of a bubble. The sharp decline after this bull trap rally will be something to tell your children about. My only question is how aggressive of a short I'm placing at 2960.[/quote]

If 62% retracement is your target, you don't think the recent intra-day high of 2954 counts as close enough? In which case, we won't see 2960 and you may miss the entry.

[/quote]I didn't want to miss the opportunity, so I scaled into SH when S&P was as 2740 and then again at 2930. That's why i'm more comfortable waiting till 3100 for the next lot. Otherwise, I'll just keep the first two lots for the ride down.[/quote]

I'm waiting roughly 24 days after these states reopen. That is when the daily deaths will really jump up and most likely tank the market. I outlined the reasons above. I see no reason to worry about short position early. It will creep back up to 2960 on sentiment 'everything is fine, back to normal, we did it!' when states first reopen. The delayed timer on the virus is key to note.

tspwizard1
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Re: How Low Can We Go

Post by tspwizard1 »

I know its yahoo but this story demonstrates my point well.

https://www.yahoo.com/news/trump-admini ... 00753.html

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bloobs
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Re: How Low Can We Go

Post by bloobs »

McWinning wrote:.... I scaled into SH when S&P was as 2740 and then again at 2930. That's why i'm more comfortable waiting till 3100 for the next lot. Otherwise, I'll just keep the first two lots for the ride down.
Hmm good strategy 8-)
Anger and intolerance are the enemies of correct understanding.
― Mahatma Gandhi

If it's a choice between a difficult truth and a simple lie, people will take the lie every time. Even if it kills them.
― Paul Murray

Scorpio70
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Re: How Low Can We Go

Post by Scorpio70 »

The Treasury is taking another $3 Trillion from the fed. I have a feeling like some is heading to the markets in one way or another.

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userque
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Re: How Low Can We Go

Post by userque »

Walter Morrow: There Ain’t No Such Thing as a Free Lunch
Geoffrey Chaucer: The chickens come home to roost.
KJV: There shall be weeping and gnashing of teeth...

Image
"In the land of idiots, the moron is King."

tspwizard1
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Re: How Low Can We Go

Post by tspwizard1 »

Scorpio70 wrote:The Treasury is taking another $3 Trillion from the fed. I have a feeling like some is heading to the markets in one way or another.
Is this true?!? If so that is HORRIBLE news. Printing money is not the solution here. How can we be so stupid?

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userque
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Re: How Low Can We Go

Post by userque »

tspwizard1 wrote:
Scorpio70 wrote:The Treasury is taking another $3 Trillion from the fed. I have a feeling like some is heading to the markets in one way or another.
Is this true?!? If so that is HORRIBLE news. Printing money is not the solution here. How can we be so stupid?
Doesn't matter.

Whether the money is "borrowed" or printed, guess who ultimately foots the bill.
"In the land of idiots, the moron is King."

tspwizard1
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Re: How Low Can We Go

Post by tspwizard1 »

userque wrote:
tspwizard1 wrote:
Scorpio70 wrote:The Treasury is taking another $3 Trillion from the fed. I have a feeling like some is heading to the markets in one way or another.
Is this true?!? If so that is HORRIBLE news. Printing money is not the solution here. How can we be so stupid?
Doesn't matter.

Whether the money is "borrowed" or printed, guess who ultimately foots the bill.
Printing trillions of dollars and giving it all to corporations huh? How is this capitalism again? UNREAL this is going on.

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userque
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Re: How Low Can We Go

Post by userque »

Governments can borrow money via treasury bonds. Or they can print money. Or they can raise taxes. Or they can cut spending.

Either way, at our levels ... esta es no bueno. Just a matter of time, like all fraudulent schemes.

U.S. Government Bonds: Sounds Like a Ponzi Scheme to Me
https://seekingalpha.com/article/147076 ... heme-to-me

"...

If you use the capital from today's new buyers to meet your redemption obligations for today's sellers, that is a recipe for disaster isn't it? It's unsustainable. It sounds uncomfortably like a Ponzi scheme. Ponzi schemes collapse when the buyers dry up and the sellers come calling in volume.

..."
"In the land of idiots, the moron is King."

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userque
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Re: How Low Can We Go

Post by userque »

FYI:

Is the Federal Reserve Printing Money?
https://www.thebalance.com/is-the-feder ... ey-3305842
"In the land of idiots, the moron is King."

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userque
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Re: How Low Can We Go

Post by userque »

tspwizard1 wrote:Printing trillions of dollars and giving it all to corporations huh? How is this capitalism again? UNREAL this is going on.
You raise a point I've pondered over the years.

I've come to the conclusion that corporations, per se, aren't the enemy.

Corporations employ thousands of Moms and Pops. Saving a corporation saves lots of regular folks. And thousands of Mom and Pop and Children have money invested in corporations. Not to mention the public service they provide.

Some corporations are in essence, government entities (Lockheed Martin, Northrop Grumman, Etc.), or crucial to the our infrastructure (Amtrak, Etc.), and should not be allowed to fail.

However, the corporate setup in our country lacks checks and balances. A CEO can drive a corporation into the dirt, and walk away with a substantial bonus...even after taking government bailouts.

As long as America is concentrating on the latest TikTok videos, nothing will change. We will simply go the way of all previous empires.
"In the land of idiots, the moron is King."

tspwizard1
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Re: How Low Can We Go

Post by tspwizard1 »

userque wrote:
tspwizard1 wrote:Printing trillions of dollars and giving it all to corporations huh? How is this capitalism again? UNREAL this is going on.
You raise a point I've pondered over the years.

I've come to the conclusion that corporations, per se, aren't the enemy.

Corporations employ thousands of Moms and Pops. Saving a corporation saves lots of regular folks. And thousands of Mom and Pop and Children have money invested in corporations. Not to mention the public service they provide.

Some corporations are in essence, government entities (Lockheed Martin, Northrop Grumman, Etc.), or crucial to the our infrastructure (Amtrak, Etc.), and should not be allowed to fail.

However, the corporate setup in our country lacks checks and balances. A CEO can drive a corporation into the dirt, and walk away with a substantial bonus...even after taking government bailouts.

As long as America is concentrating on the latest TikTok videos, nothing will change. We will simply go the way of all previous empires.
You're right. It is a matter of time before it all falls apart. This is utter madness. Create a giant asset bubble and then print HUGE amounts of money when the longest bull market of all time finally turns bear. So I guess the bear market is a thing of the past now? Anytime there is trouble on the horizon just print a few trillion and give it to the corporations with no strings attached? Meanwhile 1/3 of Americans haven't been able to pay their rent for the last 2 months. Nothing to see here folks.. Look down at your phones and walk on.

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bloobs
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Re: How Low Can We Go

Post by bloobs »

userque wrote:
tspwizard1 wrote:Printing trillions of dollars and giving it all to corporations huh? How is this capitalism again? UNREAL this is going on.
You raise a point I've pondered over the years.

I've come to the conclusion that corporations, per se, aren't the enemy.

Corporations employ thousands of Moms and Pops. Saving a corporation saves lots of regular folks. And thousands of Mom and Pop and Children have money invested in corporations. Not to mention the public service they provide.

Some corporations are in essence, government entities (Lockheed Martin, Northrop Grumman, Etc.), or crucial to the our infrastructure (Amtrak, Etc.), and should not be allowed to fail.

However, the corporate setup in our country lacks checks and balances. A CEO can drive a corporation into the dirt, and walk away with a substantial bonus...even after taking government bailouts.

As long as America is concentrating on the latest TikTok videos, nothing will change. We will simply go the way of all previous empires.
You're right, corporations aren't the enemy--it's the people who run them.

There is nothing fundamentally wrong with the government giving large corporation billions of dollars to bail them out, as long as most of that trickles down at least to its workers, or is reinvested as capital expenses that increase the productivity of the corporations.

The problem is that it never happens this way. Time and again, most of this money (which is 100% debt by the way) is used to fund bonuses of the people at the top, or to pay outsized dividends to its shareholders or as we all know by now, for share buybacks that artificially inflate its share prices. All of these factors return zero value to its employees or customers. What it does is lead to 2020.

So yeah, corporations by itself are not evil--but i smell rotten fish in the boardroom.
Anger and intolerance are the enemies of correct understanding.
― Mahatma Gandhi

If it's a choice between a difficult truth and a simple lie, people will take the lie every time. Even if it kills them.
― Paul Murray

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