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If 70% of the market is ALGO; perhaps the devices had the power switch moved to the "on" position. A kinda "market uber" self driving the price actions, eh? Could be this simple, yet.
NOTE: IEF etf, 7-10 Treasury, coughed up a -.47% today, giving back much of its recent gains.
The market began its rise right at the point when the S&P500 hit "bear market," as it was down 20% from recent highs at its low point this morning. Hardly seems a sophisticated algorithm if that's all it does. (But I'll sure take it.)
@ MFO Members: I don't believe today's market was a dead cat bounce. Its the beginning of the "Santa Claus Rally", the increases in the stock market that occur in the last week of December through the first two trading days in January. The market is greatly oversold. Regards, Ted
Strong holiday sales seemed to have given a boost to this market. Can it come back to new highs in 2019? I wouldn't bet on it.
If Ted is right about a Santa rally, the 2nd trading day in January may be a good time to reduce equities a bit if you haven't done so already. That's not a recommendation, just thinking out loud. I might even take a small position in a gold ETF for 2019. I've had a buy order in for IAU the last couple weeks, but the price is slowly moving away from my bid.
I believe it was a bottom. Technically, the market had to decide today whether the last 3 months was a correction or the beginning of a bear market and it decided in favor of the correction.
This was too big to be just a relief rally or a 'bottom' or a trend change imho. Let's see what carrythrough tere is into year-end.....
Yes big-time PP today. Watching Bloomberg much of the day, it sounds like:
(1) Individual #1 has now promised Powell that he’s got the Fed job for life. He’s “100%” behind him (and forget about all those naughty things he’s been saying about him).
(2) Individual #1 made statements to the effect and / or tweeted to the effect that stocks are a great buy now and urged people to “buy the dip”.
(3) Treasury Secretary Mnuchin assured the markets that the nation’s banks are in great shape - correcting an impression he incorrectly put forth last week that there might be problems with bank reserves.
(4) Mnuchin also repeated (White House Acting Chief of Staff) Mic Mulvanry’s previous assertion that Individual #1 does not have the authority to fire Fed Chief Powell (although some experts speculate he could).
So sounds to me like Powell is OK for now, but I’d urge him not to wander too close to the Saudi consulate.
Well, I wonder if Powell will sleep better tonight. The upswing must undoubtedly be due to the fine work at the Fed, since the downside was all Powell's fault. Right?
Well, I wonder if Powell will sleep better tonight. The upswing must undoubtedly be due to the fine work at the Fed, since the downside was all Powell's fault. Right?
I think he’s like that weird uncle that families sometimes shut away in the closet. Hear that door close?
I am lousy at market timing, as I seem to have to re-learn every few years, but these massive drops & fast bounce-backs remind me of 2008, when the bottom was still a ways off.
But it also seems to me that a lot of stocks are good long-term buys right now. I'll be adding to my Roth IRA & solo 401K as soon as I can, start of next year -- just after the post-Santa rally, if @Ted is right, and probably right in time to catch another downturn.
It was time for a bounce in the stock market as it was extremely oversold. I'm staying with my all weather asset allocation of 20% cash, 40% bonds and 40% equity. To me, this appears to be nothing more than a "Big Money" ploy ... run the market down to force selling by the weaker investor so it can then be bought up by the stronger investor. Then "Big Money" begins to sell towards the peak ... and, the process then repeats. In short words the "Big Money" trading systems are creating a swing in the markets dancing to the rate increase music created by the FOMC's rate increase campaign. I'm thinking there was a lot of leverage in the markets to begin with and as the FMOC continues to raise rates (increasing the cost to use leverage) many leveraged investors sell down their leveraged positions. How much of the market was/is leveraged? Your guess is as good as mine but I guessing possible a good third. With this, I plan to continue to remain cash heavy. I'm also thinking should the FOMC continue with their planned interest rate increase campaign then there will be more selling by the leveraged investor as interest rates rise.
With this, I am sitting on the side lines thinking there is still yet a good bit of stock market volatility still to come. Should corporate earnings get paired back and fall short of current forward estimates of around $170.00 (2019) for the S&P 500 Index then I see the stock market moving even lower. Let's see with estimated forward earnings at around $170.00 times a P/E Ratio of 14 puts the Index somewhere around 2380. That's about 100 point below where the Index is currently trading. I'm thinking there is now better value to be had in foreign stocks over domestics.
Bear markets are prone to sudden violent 1-2 day upshots (like today’s) only to resume the downward trend. That’s not so much a prediction as an observation. I’ve been expecting this.
With some IRA money moving right now between fund houses I feel like I’m flying blind. The goal is to get 100% out of Oakmark and stash it at T. Rowe and D&C. Problem is it converts temporarily to “cash” as it wings its way by mail from one custodian to another. Can remain in that state for 1-2 weeks or longer. On rare occasion two houses will collaborate and move the $$ between them much faster electronically. That’s the exception, however, and I’ve never been able to figure out why it isn’t always done that way.
With such market volatility, “where it lands no one knows ...” .
Well, my own positioning is where it ought to have been, had I made the proper move back at the end of the summer. I'm heavier in bonds and lighter on stocks, but glad I still have a significant amount in equities. Never saw a day like today in my portfolio before.
I randomly chose yesterday to do sell two stock funds in my taxable account for a tax loss sale. Good timing, particularly if the markets drop today or remain steady, because I plan to reinvest in a different fund right away. I never try to time the markets, but I’m pleases when it works to my benefit.
"Today, quantitative hedge funds, or those that rely on computer models rather than research and intuition, account for 28.7% of trading in the stock market, according to data from Tabb Group--a share that's more than doubled since 2013. They now trade more than retail investors, and everyone else.
Add to that passive funds, index investors, high-frequency traders, market makers, and others who aren't buying because they have a fundamental view of a company's prospects, and you get to around 85% of trading volume, according to Marko Kolanovic of JP Morgan .
"Electronic traders are wreaking havoc in the markets," says Leon Cooperman, the billionaire stock picker who founded hedge fund Omega Advisors.
Behind the models employed by quants are algorithms, or investment recipes, that automatically buy and sell based on pre-set inputs. Lately, they're dumping stocks, traders and investors say."
If it's a "game",then it's surely like roulette at a shady casino. Lots of extra wires and odd mechanical things under the table where you can't see them.
"Today, quantitative hedge funds, or those that rely on computer models rather than research and intuition, account for 28.7% of trading in the stock market, according to data from Tabb Group--a share that's more than doubled since 2013. They now trade more than retail investors, and everyone else.
Add to that passive funds, index investors, high-frequency traders, market makers, and others who aren't buying because they have a fundamental view of a company's prospects, and you get to around 85% of trading volume, according to Marko Kolanovic of JP Morgan .
"Electronic traders are wreaking havoc in the markets," says Leon Cooperman, the billionaire stock picker who founded hedge fund Omega Advisors.
Behind the models employed by quants are algorithms, or investment recipes, that automatically buy and sell based on pre-set inputs. Lately, they're dumping stocks, traders and investors say."
Possibly a lot of short covering also.
Back to the game.
*************************** I knew that shit --- oops, I mean STUFF--- was going on. I had no idea about the full extent. The entire picture really sucks and smells. Leon Cooperman is correct! ...And it's getting to the point that looking at the overnight futures indicates precisely NOTHING meaningful about the next day...
Day-trading institutional algos are going to kill the markets one day. The Flash Crash of '10 and the insanity of 5-600-point intraday swings (not to mention Wed's 1000-point spike on the Dow) are just a preview of things to come.
I daytraded futures in the latter years of grad school (and did fairly well) just when algos were coming into widespread use. So glad I'm out of that world now - between the various QE's over the years and algos/indices/ETFs that trade for themselves, there's practically no such thing as 'natural price discovery' anymore.
This market still feels very shaky - like we are a few bad Donnie tweets away from going down the tubes. As the current "regime" has every incentive to keep markets afloat, you would think keeping things quiet would be a priority.
But that is never really an option with Donnie. I'm betting that he will muck it up further in 2019. Political antics usually don't matter so much, but it seems the markets are watching now. And something doesn't smell right.
Personally, I am still very heavy in cash. My limit (BUY) orders are out there. Worst case scenario, I will just earn ~2.5% in 2019. Game on.
It's now thought the 1000 point rise was mostly due to pension funds rebalancing their portfolios before year end, ie: selling bonds and buying stocks. That makes sense to me.
Back in October a few here expressed surprise when I said we had entered a bear market. Well we are in a bear market that will last about 6 months in total. I expect the final low in February around 20,500 on the DOW and around 2200 on the SPX.
@Simon Many expect recession next year or in 2020. You suggest the bear market will end in 3 months before a recession even started. Therefore we will have to see another bear market before the recession. It is very difficult to justify that.
Ned Davis, a quant shop whose research I read through Schwab -- and who has a pretty good track record -- are making a call similar to @Simon. Their forecast is for a bear market without a recession, which is why they expect the bear to be brief.
I'm not saying they have a cristal ball, but it's as plausible a scenario as any.
Comments
This was too big to be just a relief rally or a 'bottom' or a trend change imho. Let's see what carrythrough tere is into year-end.....
NOTE: IEF etf, 7-10 Treasury, coughed up a -.47% today, giving back much of its recent gains.
It's funny how Barry states it was his market until > 2.5 wks ago when everything started heading south (after 24 months lol still Bary market) ...
If we have another 1987 I am pretty sure it's chubby trump market..
We will know in 4-8 wks
Regards,
Ted
If Ted is right about a Santa rally, the 2nd trading day in January may be a good time to reduce equities a bit if you haven't done so already. That's not a recommendation, just thinking out loud. I might even take a small position in a gold ETF for 2019. I've had a buy order in for IAU the last couple weeks, but the price is slowly moving away from my bid.
Yes big-time PP today. Watching Bloomberg much of the day, it sounds like:
(1) Individual #1 has now promised Powell that he’s got the Fed job for life. He’s “100%” behind him (and forget about all those naughty things he’s been saying about him).
(2) Individual #1 made statements to the effect and / or tweeted to the effect that stocks are a great buy now and urged people to “buy the dip”.
(3) Treasury Secretary Mnuchin assured the markets that the nation’s banks are in great shape - correcting an impression he incorrectly put forth last week that there might be problems with bank reserves.
(4) Mnuchin also repeated (White House Acting Chief of Staff) Mic Mulvanry’s previous assertion that Individual #1 does not have the authority to fire Fed Chief Powell (although some experts speculate he could).
So sounds to me like Powell is OK for now, but I’d urge him not to wander too close to the Saudi consulate.
But it also seems to me that a lot of stocks are good long-term buys right now. I'll be adding to my Roth IRA & solo 401K as soon as I can, start of next year -- just after the post-Santa rally, if @Ted is right, and probably right in time to catch another downturn.
With this, I am sitting on the side lines thinking there is still yet a good bit of stock market volatility still to come. Should corporate earnings get paired back and fall short of current forward estimates of around $170.00 (2019) for the S&P 500 Index then I see the stock market moving even lower. Let's see with estimated forward earnings at around $170.00 times a P/E Ratio of 14 puts the Index somewhere around 2380. That's about 100 point below where the Index is currently trading. I'm thinking there is now better value to be had in foreign stocks over domestics.
With some IRA money moving right now between fund houses I feel like I’m flying blind. The goal is to get 100% out of Oakmark and stash it at T. Rowe and D&C. Problem is it converts temporarily to “cash” as it wings its way by mail from one custodian to another. Can remain in that state for 1-2 weeks or longer. On rare occasion two houses will collaborate and move the $$ between them much faster electronically. That’s the exception, however, and I’ve never been able to figure out why it isn’t always done that way.
With such market volatility, “where it lands no one knows ...” .
Edit: Someone is rage-tweeting again, that may explain things, too.
"Today, quantitative hedge funds, or those that rely on computer models rather than research and intuition, account for 28.7% of trading in the stock market, according to data from Tabb Group--a share that's more than doubled since 2013. They now trade more than retail investors, and everyone else.
Add to that passive funds, index investors, high-frequency traders, market makers, and others who aren't buying because they have a fundamental view of a company's prospects, and you get to around 85% of trading volume, according to Marko Kolanovic of JP Morgan .
"Electronic traders are wreaking havoc in the markets," says Leon Cooperman, the billionaire stock picker who founded hedge fund Omega Advisors.
Behind the models employed by quants are algorithms, or investment recipes, that automatically buy and sell based on pre-set inputs. Lately, they're dumping stocks, traders and investors say."
Possibly a lot of short covering also.
Back to the game.
I knew that shit --- oops, I mean STUFF--- was going on. I had no idea about the full extent. The entire picture really sucks and smells. Leon Cooperman is correct! ...And it's getting to the point that looking at the overnight futures indicates precisely NOTHING meaningful about the next day...
I daytraded futures in the latter years of grad school (and did fairly well) just when algos were coming into widespread use. So glad I'm out of that world now - between the various QE's over the years and algos/indices/ETFs that trade for themselves, there's practically no such thing as 'natural price discovery' anymore.
But that is never really an option with Donnie. I'm betting that he will muck it up further in 2019. Political antics usually don't matter so much, but it seems the markets are watching now. And something doesn't smell right.
Personally, I am still very heavy in cash. My limit (BUY) orders are out there. Worst case scenario, I will just earn ~2.5% in 2019. Game on.
Back in October a few here expressed surprise when I said we had entered a bear market. Well we are in a bear market that will last about 6 months in total. I expect the final low in February around 20,500 on the DOW and around 2200 on the SPX.
HNY
I'm not saying they have a cristal ball, but it's as plausible a scenario as any.