Bear Market or just a correction?
- Thread starter goldmom
- Start date
One interesting thing to note is oil is at the lowest it's been in years, and it is usually a high oil price time. So as the months move on oil will continue to drop. That will put a damper on growth for several companies.
The futures have crashed hard. S&P down 50 points, Dow over 400 points. Looks like it will be ugly in the morning.
- Germany's Dax tumbled below10,000, down nearly 4.5%. The FTSE was down 3.8% in London.
This is where the big boys make make their money folks.
I sold some stuff last Monday, because I was just not happy with the market. I'll hold on to my blue chip/dividend stuff and could be a buyer as the market falls. If the Fed raises rates now in a colossal show of stupid it will doom the market. Like the WSJ says right idea wrong time.
It's a host of factors. Macro wise, deflation is simply hitting stocks. Now is the time to watch the blood flow in the streets, but buying now is catching a falling knife.
Dow as low as 12,000? Possibly. Full crash to 2009 levels? Doubtful. But prices are determined by buying and selling, and there is ALOT of panic going on right now, panic will get a lot worse potentially. 10 years for now this will all be moot, as all markets are bull markets in terms of inflation, and cheap buying levels.
Markets don't go straight up. Corrections, while painful, are healthy.
This is not my area but I'm curious how much of the selling and volatility is due to automated trading.
I can't ever shake the feeling that it's all rigged.
I can't ever shake the feeling that it's all rigged.
Jim Kramer called it a full crash in China. Dow opened down 1000 points and now is off 200. Leave it up to the media to sensationalize the -1000 point open and that is still the headline on all the sites but good grief it's now only down 200 after 3 hours of trading. It's fun sitting on the sidelines for this mess with no skin in the game.
For a few years I've strongly considered investing counter to everything Kramer discusses/shouts on his show - buy if he screams sell, short-sell anything he touts as a great buy.
I'm convinced that, had I done so with all of my portfolio starting in about 2012, I would be very, very wealthy.
Just talked to my financial planner. The Dow was never really down 1000 points. There were just a ton of computer initiated trades this morning. I think the Dow averages just couldn't keep up.
This is a correction that many have been waiting for.
This is a correction that many have been waiting for.
"I'm sorry, Dan. I'm afraid I can't do that." - HFT Algos everywhere
These days, it's algorithms that are written to buy or sell upon certain benchmarks. Then the low buy progra kick in about 10 a,m. Then joe investor starts to sell after getting his morning handy, cup of coffee and checking CNN after seeing what Kim K. Wore the night before.
China, their economy is stalling. It's a global economy. Oil demand is down and oil prices at the lowest it has in years.
Also Glen Beck told me to put my money in gold!! Wtf.
Also Glen Beck told me to put my money in gold!! Wtf.
If my Financial Planner had told me that I'd probably start looking for someone else.
I don't follow the market very closely on a daily basis. What is the over/under for time it takes the market to surpass where it was in July?
"Today an ounce of gold sells for $300, more or less. Now suppose that a modern alchemist solves his subject's oldest problem by finding a way to produce unlimited amounts of new gold at essentially no cost. Moreover, his invention is widely publicized and scientifically verified, and he announces his intention to begin massive production of gold within days. What would happen to the price of gold? Presumably, the potentially unlimited supply of cheap gold would cause the market price of gold to plummet. Indeed, if the market for gold is to any degree efficient, the price of gold would collapse immediately after the announcement of the invention, before the alchemist had produced and marketed a single ounce of yellow metal.
What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation." - Ben Bernanke, 2002.
The problem with this
is that it doesn't stay like this
it turns into this
What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation." - Ben Bernanke, 2002.
The problem with this
is that it doesn't stay like this
it turns into this
Our adviser feels it is an overdue correction. I'm in it for the long term anyway so I'm not too worried about it.
I love writing options when the volatility spikes like this. People panic and are willing to pay a steep premium for protection. It is not for the faint of heart indeed, but if you can keep a level head and don't mind a little risk, these types of markets can be very rewarding.
Had my retirement sitting in treasuries waiting for this drop for several months. Anyone that thought the dow was going to stay at over 18k was just being silly.
Glad I'm not you. I'm very happy with the return my Financial Planner has gotten me.
A majority of trading is now automated. Each of them has algorithms to destroy other algorithms. We also have the Fed's plunge protection team in play at any given time. My longer term charts /ES were starting to turn over, over the weekend, but it takes a few days to confirm. I will try to post some screen grabs at some point. This will be interesting.
It is certainly rigged in the sense that HFT's are front running all quotes and thereby skimming on transactions.
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"And this is how Virtu explains its unprecedented trading succes, one which takes the Holy Grail of trading and updates its to Ver 2.0:
"Technology and operational efficiency are at the core of our business, and our focus on market making technology is a key element of our success. We have developed a proprietary, multi-asset, multi-currency technology platform that is highly reliable, scalable and modular, and we integrate directly with exchanges and other liquidity centers. Our market data, order routing, transaction processing, risk management and market surveillance technology modules manage our market making activities in an efficient manner and enable us to scale our market making activities globally and across additional securities and other financial instruments and asset classes without significant incremental costs or third-party licensing or processing fees."
Which is just a lot of fancy words for perfectly legal, regulator-endorsed and risk-free frontrunning of legitimate trades.
And just in case the punchline was lost in all that, here it is again: Virtu made money on 1,484 of 1,485 trading days.
This is a successful track record of 99.93%, or as the SEC and the math PhDs who have taken over the market would call it: "perfectly normal.""
Notice how the Dow is up almost 300 and CNBC keeps running the headlines:
DOW RETREATS FROM HIGH - so the DJIA is up 300 and in retreat. Talk about spin.
DOW RETREATS FROM HIGH - so the DJIA is up 300 and in retreat. Talk about spin.
