All things STOCKS

[Velo Vol]

 

[05_never_again]

I'm just wondering how you (or anyone) is so confident that in the short-term, with the information known now, the market is going substantially lower.

You talk mostly about the Fed. Plausible enough reason for a market hit. Except hasn't the Fed already said (in broad terms) what it's doing? Slowly reducing the balance sheet, raising rates in 0.25-0.5% increments to the 2.5-3.0% range. Why isn't that variable already priced in?

The market being aware of what the Fed is going to do and the ultimate impact on the economy from what the Fed does are two different issues.

Personally, I think the market activity over the last several trading sessions is more indicative of worries about growth (the yield on the 10-year is down about 35 bps from the high) rather than uncertainty about what the Fed is doing. The equity market decline in Q1 I think was about Fed uncertainty - now there is more visibility into what the Fed is doing, yet the market is still declining. IMO that is demand destruction from inflation concerns, recession concerns, hell, maybe even "how bad is the recession going to be" concerns.

 

[Majors]

12% drop by the DJ in 3 months. High gas prices and stock market dropping below 31,000 is a pretty good indicator of how things are for everyone.

 

[Thunder Good-Oil]

Nice to see a lot of green at the close after the day started out bad. Maybe the computerized trades didn’t want to be short over the weekend. A handful of blue chip names saved my butt today. Need a lot more of these days (and better) though. I’d rather not be seeing CAT and THO as a couple of my biggest percentage losers though.

 

[GoDucks349]

12% drop by the DJ in 3 months. High gas prices and stock market dropping below 31,000 is a pretty good indicator of how things are for everyone.

Maybe you're using a different time period, I've got the DJ off 7% over the last 3 months and finishing friday at 31,261. Certainly not great numbers by any measure. Yea, gas is spendy now. I used Feb 22 to May 20 period.

 

[Majors]

Maybe you're using a different time period, I've got the DJ off 7% over the last 3 months and finishing friday at 31,261. Certainly not great numbers by any measure. Yea, gas is spendy now. I used Feb 22 to May 20 period.

You’re correct at 7%, I pulled 6 months numbers.

 

[Thunder Good-Oil]

Nice to be long and not start out the week getting abused. At this point I’ll take anything that ends green.

 

[Big Orange#1]

 

[lawgator1]

View attachment 457616

Ooooorrrrrr.. they have a non unique product in an incredibly oversaturated market and it was a matter of time until the herd was due to be thinned.

 

[Thunder Good-Oil]

Ooooorrrrrr.. they have a non unique product in an incredibly oversaturated market and it was a matter of time until the herd was due to be thinned.

And a nearly $40 billion market cap with a 10x sales multiple. And a net loss on the bottom line. Their key to success is to hang on to all of their users as they grow up. The value is most likely as a buyout candidate with a huge tech company wanting their user data.

 

[lawgator1]

And a nearly $40 billion market cap with a 10x sales multiple. And a net loss on the bottom line. Their key to success is to hang on to all of their users as they grow up. The value is most likely as a buyout candidate with a huge tech company wanting their user data.

So, like basically every social media company that isn't FB.

 

[Thunder Good-Oil]

So, like basically every social media company that isn't FB.

I’m not sure what the other independent ones are right now. Facebook, Microsoft, and Google have bought several of them through the years. Put LEAPS on any could be a good idea - except for the buyout probability AND the irrational meme stock potential.

 

[Big Orange#1]

Ooooorrrrrr.. they have a non unique product in an incredibly oversaturated market and it was a matter of time until the herd was due to be thinned.

Yeah It’s hilarious that Snapchat is tanking the market today. I think it’s because ad revenue is down big time through the app. Which is bad sign for tech and the economy in general

 

[allvol123]

Ooooorrrrrr.. they have a non unique product in an incredibly oversaturated market and it was a matter of time until the herd was due to be thinned.

Yea…it could be because of a deteriorating economy. No wayz.

 

[mrorange211]

Snap is just the excuse. The rally was being sold one way or the other. There hasn’t been a panic yet.

 

[05_never_again]

I want to see another flush with a VIX spike to about 45-50 and I'll take a smidge of my long-term cash and put that to work. That probably isn't "the" bottom but would probably be a place to make some decent purchases. Maybe 3600-3700 in the S&P.

This selloff has still not felt panicky at all, even though there have been multiple down 4-5% days. The VIX hasn't even crested the 40 level, and it hasn't even gotten above 37 on this April/May downleg.

 

[mrorange211]

our thoughts align quite a bit it seems. I’m waiting on a big spike in VIX to buy in some small LT positions as well. I’ll probably just invest all of it into VOO. We just aren’t panicked enough yet.

 

[05_never_again]

our thoughts align quite a bit it seems. I’m waiting on a big spike in VIX to buy in some small LT positions as well. I’ll probably just invest all of it into VOO. We just aren’t panicked enough yet.

Yep - I don't even own any individual stocks anymore. In my taxable account I just spread it across a handful of index/low cost ETFs. 401(k) is just on complete autopilot and remains totally invested all the time in FXAIX. I'm lucky to be at the age I am because I can view these things as opportunities to buy more and bring your cost basis down for a long time, and I've been sitting on a lot of cash for a long time outside of the 401k.

I'd be more nervous about these markets if I was in my 50s, because I'm not sure we're at or maybe even close to a bottom.

 

[Velo Vol]

because it's common sense. 13 years of faucets releasing unlimited liquidity into the market and now it's over, and we are only at the beginning. It's not priced in because even now people expect the Fed to step in and save the day. Many of these retail traders have only existed in a market that "goes to the moon". It's why every dip is being bought because there is an assumption it will turn around because Daddy Powell will come in and save the day.

The financial media has been talking about the Fed tightening for months. There's no remaining (negative) surprise there.

Now maybe the resulting lack of liquidity from QT could exacerbate sell-offs creating a greater negative feedback loop, there could be an economic slowdown, etc. But the timing of those seems tough to predict, IMO. I do know that the pricing in of stuff today happens a lot quicker than it did in the '70s. So I don't expect a repeat of the early '70s bear market.

 

[Velo Vol]

 

[Carp]

My theory on why were seeing such massive dumps after earnings:

It's retail driven. This new era of retail trading hasn't really seen a bear market. We saw some side ways trading in mid to late 2020 heading into election, but it definitely not a bear market. I've only been investing/trading for 2 years, but looking back at the dot com bear market, I don't see quite same single day massive sell offs from big caps like we're seeing now. Of course, I only looked up about 10-15 companies.

The institutions are probably loving it, as they rode it to the top, sold, likely bought some puts, and now they'll buy it back at a 30+% discount.

 

[Orange.]

SNOW reports after close tomorrow.

 

[Thunder Good-Oil]

My theory on why were seeing such massive dumps after earnings:

It's retail driven. This new era of retail trading hasn't really seen a bear market. We saw some side ways trading in mid to late 2020 heading into election, but it definitely not a bear market. I've only been investing/trading for 2 years, but looking back at the dot com bear market, I don't see quite same single day massive sell offs from big caps like we're seeing now. Of course, I only looked up about 10-15 companies.

The institutions are probably loving it, as they rode it to the top, sold, likely bought some puts, and now they'll buy it back at a 30+% discount.

I think that programmed selling/algorithmic trades are kicking in with the institutional money after EVERY green day. There aren’t any positive events that are lifting prices out of this extended drop. Hoping that Putin will die, Mexico will curtail the lawlessness, Canada and Alaska can be drilled and dug, and China takes a big move away from their eff’d up political system.

 

[Velo Vol]

My theory on why were seeing such massive dumps after earnings:

It's retail driven. This new era of retail trading hasn't really seen a bear market.

I don't think Target, etc., plummeted because of "new" investors.

More likely this:

 

[Thunder Good-Oil]

I almost got to green after starting the day pretty deep into the red. -0.04%. I’ll take it.