How Low Can We Go

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ProduceMan
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How Low Can We Go

Post by ProduceMan »

1. Hey chart experts, is this the beginning of a long way down?

2. Will the Covid Pandemic change the seasonal’s forever?
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Bubba
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Re: How Low Can We Go

Post by Bubba »

ProduceMan wrote:1. Hey chart experts, is this the beginning of a long way down?

2. Will the Covid Pandemic change the seasonal’s forever?
My strategy did well in the 90s, 2000, 2008 and now. It's based on seasonals. I would be shocked if they're less powerful. Look ar XLE. While oil went down to negative xle still rallied. That's seasonal investing.

VAmanBulls
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Re: How Low Can We Go

Post by VAmanBulls »

1) Define long way, ha. We won't see the March bottoms again in my opinion. From a valuation standpoint, the market is however overbought currently. It went up too fast and is not supported. The short outlook valuations see the S&P support around a 2550 to 2580 target. Longer look to year 2021 I think you're looking at a S&P target of 3250 or so. 2) No, the COVID situation panic is temporary for the most part. Businesses, citizens will adapt and overcome. May see a little panic in the fall with new COVID reports, but that will be temporary. Seasonal investing back in play after that. This current market favors stock pickers over index holders (like us in the TSP). Some stocks, companies and sectors are doing exceptionally well right now. Stay motivated and happy investing.

Bubba
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Re: How Low Can We Go

Post by Bubba »

VAmanBulls wrote:1) Define long way, ha. We won't see the March bottoms again in my opinion. From a valuation standpoint, the market is however overbought currently. It went up too fast and is not supported. The short outlook valuations see the S&P support around a 2550 to 2580 target. Longer look to year 2021 I think you're looking at a S&P target of 3250 or so. 2) No, the COVID situation panic is temporary for the most part. Businesses, citizens will adapt and overcome. May see a little panic in the fall with new COVID reports, but that will be temporary. Seasonal investing back in play after that. This current market favors stock pickers over index holders (like us in the TSP). Some stocks, companies and sectors are doing exceptionally well right now. Stay motivated and happy investing.
My best guess is the market will realize it's not a v shaped rally. When that happens, we'll probably get our next leg down.

Oh and this guy cracks me up https://bullsnbears.com/crash-of-2020/.

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Tomanyiron
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Re: How Low Can We Go

Post by Tomanyiron »

ProduceMan wrote:1. Hey chart experts, is this the beginning of a long way down?

2. Will the Covid Pandemic change the seasonal’s forever?
I'm no chart expert, but I play one on the internet. :lol: Here is my 2¢ worth.

1. Yes, beginning down. A "long way"? who knows, but I'm thinking this week will average down.

2.. No, it just shows everyone that it's stupid to rely only on one indicator. Mr Market was watching all the High Fives and Fist Bumps, in the seasonal posts. And he decide to throw a bucket of cold water on all y'all. :shock:
"A good decision is based on knowledge and not on numbers." Plato
"Perfect numbers like perfect men are very rare." Rene Descartes

Scorpio70
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Re: How Low Can We Go

Post by Scorpio70 »

The Fed keeps priming the pump. I would watch the 10 Year Treasury.

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bloobs
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Re: How Low Can We Go

Post by bloobs »

My guess is that the S&P has a 30% chance of ending positive by friday COB and 70% of being down.

Some seasonals always will win over the long term. Month to month, not so much.

Prepare for at least two opposing outcomes. Be agile; be always on the lookout and be prepared to act fast if it turns--but make sure you know what exactly to do first!
Anger and intolerance are the enemies of correct understanding.
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tspwizard1
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Re: How Low Can We Go

Post by tspwizard1 »

Yes the dead cat bounce is over. Run and hide and do it now. There will be no way out once blood is in the water.

The covid situation isn't going away. Just because America's short attention span would like to move on to something else doesn't mean much to a virus. MIT modeling shows 52% likelihood of 150,000 dead from virus by August 1st. Look at the data. And that is with moderate social distancing. It will likely be way more than that projection imo due to all the falsehoods being spread 'its the flu', etc. Add that into a huge asset bubble that burst, and >30 million unemployed. Don't fight for that last little upwards bull trap rally percentage. The risk is too high. Is it worth your retirement to be greedy now?

https://covid19-projections.com/

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stilljammi
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Re: How Low Can We Go

Post by stilljammi »

I was pretty bullish about a bounce back after a few weeks of flattening the curve and proving that enough of us have the self-control to beat this thing. Unfortunately, even with that, it's not going back to normal and some industries will never be the same. I don't think the market has priced that in yet. At the same time, some states are tired of mitigation and moving head-on to herd immunity, hoping that the past few months bought us enough time to make ventilators, PPE, etc.

tspwizard1
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Re: How Low Can We Go

Post by tspwizard1 »

Short the market at 2960

McWinning
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Re: How Low Can We Go

Post by McWinning »

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?

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bloobs
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Re: How Low Can We Go

Post by bloobs »

tspwizard1 wrote:Short the market at 2960
That's aiming a little high, don't you think? What's the rationale? Isn't that past the 62% retracement levels? There is a chance it won't even get there in the short term. If it does, it may improve market sentiment enough to push it up higher.
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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Tomanyiron
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Re: How Low Can We Go

Post by Tomanyiron »

Now (at 12:30) the market is going back up. :? I wished I had not followed your IFT to G, bloobs. :cry: :lol:
"A good decision is based on knowledge and not on numbers." Plato
"Perfect numbers like perfect men are very rare." Rene Descartes

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bloobs
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Re: How Low Can We Go

Post by bloobs »

Tomanyiron wrote:Now (at 12:30) the market is going back up. :? I wished I had not followed your IFT to G, bloobs. :cry: :lol:

Actually i am a big believer in selling while the market is flat/rising--so today hopefully is looking good so far. I do not enjoy the feeling of getting caught in a freefall.

I would have preferred to have gone to G or F last thursday but held off because i really wanted to follow my seasonal more faithfully this month.
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

tspwizard1
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Re: How Low Can We Go

Post by tspwizard1 »

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 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.

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.
Last edited by tspwizard1 on Mon May 04, 2020 2:13 pm, edited 1 time in total.

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