Discussion in 'Economics' started by dozu888, Jan 13, 2020.

  1. dozu888


    ok - let me create a thread that may be a bit interesting...

    200:1 like dislike ratio.... other doom channels have similar feed backs.

    guys believe me, mortgage your house and go all in on the QQQ, or AAPL.... the sheep crowd is empty handed and they are all watching these doom channels everyday as pain killer pills just to feel a little better.
    comagnum and nooby_mcnoob like this.
  2. Overnight


  3. Seaweed


    Ok, let's make this more scientific. How much does the market have to decline before you consider yourself wrong? For example, at the end of 2018, we had a 24% decline for the NQ. Back in 2008 it was about 55%, and in 2000, it was a whopping 84% until the low hit in 2002.

    NQ - weekly.png

    Since you are suggesting people mortgage their house, do you think they should hold through a 20% draw down? Even a 50% drawdown? Obviously if its a leveraged investment even a 10% drawdown can be very painful.

    I quite like the videos of this George Gammon guy and he is sharing important info in my opinion. He is even the first to point out that gold for him is only insurance and hardly a "get rich quick" scheme, so he isn't your typical doom and gloom gold bug type of guy.

    Now it is true that the repo madness seems to have subsided going into 2020 (haven't watched the linked video yet), but it doesn't take a genius to understand that this entire market rally is fueled by FED liquidity. When that stops, the party stops. If you watch enough of his videos, you also learn that perhaps the FED won't be able to control things like interest rates much longer, and these are all important things to be aware of.

    Your only premise of the market forever going higher can only work in one type of environment that the FED may not be able to keep up for much longer. So your prediction really needs some metrics, and hence why I ask.

    Lastly, on my chart I outline via red arrows the first exuberant run-up to the 2000 high, and wouldn't you say that it looks pretty damn steep at the current level? So how much of a pull back are you saying is acceptable?
  4. Seaweed


    Now I will also be the first to admit that nothing has slowed this market down. Even this latest Iran issue was shrugged off. You might call this is a strong market, but some might call it irrational exuberance, and we all know how that ends.

    Lets also not forget that we are living in a time with much more passive investing, which can lead to greater drops when everyone runs for the exits and ETFs are forced to sell to meet redemptions. So this time around, we really don't know what to expect going forward. Heck, this massive amount of liquidity and non-existent interest rates for so long is also something new that more than likely cannot really be modeled. So it has lead to this hated rally in my opinion, but it can also lead to a devastating correction.

    Basically, what I'm saying is that everything has to go right to keep this party going, but just one thing going wrong can really make things ugly quite quickly.
    wrbtrader likes this.
  5. maxinger


    When the market is at record high, you will start to see thousands of reports
    saying the world is going to end soon.

    It happened many times over the past few decades.
    And it will continue to happen again and again like clockwork.

    beginner66 likes this.
  6. wrbtrader


    Now that's market context.

    Overnight and Seaweed like this.
  7. Seaweed


    Sadly, I'm not really sure how much market context matters these days. I mean so much of trading from the past was based on certain fundamental laws of business, or economy, or whatever else you want to call it. But this current environment is nothing like it. APPL can very well go to 1000 as dozu says if the FED directly starts buying stocks at the slightest hint of weakness, just like Japan does. With unlimited FED liquidity and low interest rates for this long, there is no playbook really to help guide you.

    We really have no idea how far the FED can go, and since every other country is in just as bad or worse shape, the US can probably get away with it for much, much longer.

    In fact, its watching George's videos that really taught me so much. Even understanding why the US dollar is still so strong was an eye opener, and this may very well continue. The FED wants to see inflation, which it has, but in asset prices which they don't seem to care about. Its inflation in consumer prices that they want to see more of, which has been the tricky part, if they were of course looking hard enough. But regardless of all these nuances, the system is really messed up, but if its for 6 months or 10 years, nobody really knows. Its just that when it does start to go down, that is when it will get ugly, based on everything I've learned till now. But until then, it really is smooth sailing.
    .sigma likes this.
  8. Overnight


    Your chart illuminates how scary the NQ (and equities in general) are getting at this point. Because a 50% drop 10 years ago will not be as bloody as a 50% drop today. There will be lives lost on this next major bear-drop, and it IS coming between now and 2024 in my estimation. (This depends on who wins the election.)

    I am sad I missed the majority of the ride up, because swinging long at the tops killed my faith in the sustainability of my ability. Damned trade war forced me back into day trading.
    .sigma likes this.
  9. dozu888


    legit questions...

    but the difference maker is the market reading skills.... I have personally guaranteed a few trades and have never failed..

    I can get scientific but I have explained everything already.

    this is once in a life time opportunity to mortgage the house... today!
    .sigma likes this.
  10. dozu888


    unfortunately this is the internet, and any true wisdom quickly get overwhelmed by the doubters, which is normal.

    so... most people don't deserve to be rich any way. lol.
    #10     Jan 13, 2020
    _eug_ likes this.