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21,514,691 Views | 223258 Replies | Last: 7 hrs ago by Heineken-Ashi
jmcfar_98
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Stole this from the Politics board.

Interesting commentary from a well regarded but low profile money manager:


The Fed is dealing with what has been called the "Tinbergen dilemma," named for the economist Jan Tinbergen, who first described it. The dilemma describes when a policymaker faces two policy problems but only has one policy tool. It is sometimes described as "trying to shoot two bad guys with one bullet." The Tinbergen dilemma can only be resolved if the two policy problems can be fixed by the same solution. The Fed is facing an economy that is still rather strong (though momentum is clearly weakening), which supports tighter policy, and financial markets that are signaling increasing stress, which begs for easing. What has the financial markets so upset is that there is evidence that, in the past, the Fed has tended to placate the financial markets when facing a similar Tinbergen dilemma.

Essentially, financial markets have become accustomed to being favored when the aforementioned Tinbergen dilemma exists. Powell is trying to weave a path that addresses both but, in reality, it looks like the Fed is more concerned about the economy overheating than it is about a weak stock market or a flattening yield curve. This position increases the likelihood of a policy mistake, one of our four potential threats to the expansion we discussed in our 2019 Outlook.

So, what happens now? Equity market valuations are improving and sentiment is becoming increasingly negative. Both tend to favor a bounce at some point. The proverbial "Santa Claus Rally" probably won't happen this year, but we would expect a January bounce.
badharambe
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To be clear, I'm a bear by nature and have enjoyed the last few weeks. However, I just can't shake the suspicion that the market is going through a massive shake out. One instrument I like to follow is sentiment, here's a tweet that shows the power of sentiment and the current market:



It's pretty interesting. Overall sentiment on this board seems to be pretty bearish (and for good reason) but we weren't near as bearish 3 months ago, which is when we should have been.

Just food for thought.
drill4oil78
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badharambe said:

To be clear, I'm a bear by nature and have enjoyed the last few weeks. However, I just can't shake the suspicion that the market is going through a massive shake out. One instrument I like to follow is sentiment, here's a tweet that shows the power of sentiment and the current market:



It's pretty interesting. Overall sentiment on this board seems to be pretty bearish (and for good reason) but we weren't near as bearish 3 months ago, which is when we should have been.

Just food for thought.
Sentiment is just one indicator and it can go higher as far as bear %. It is also s short term indicator that can change quickly. I agree the bears are around 50% and that is bullish, but it can go higher in a bear market. It was that way a few weeks ago and the media was spouting off how bullish of an indicator it was. How did that work out. As long as the media is spouting about it than it is a bearish indicator. When they forget about it and don't pay attention it will mean something bullish. In fact they are still talking about negative sentiment indicating a bottom. There are still plenty of fundamental bullish people on TV stating things are over done and there is great value out there and this is a correction not a bear market even though 70% of the stocks are in bear trends. They will be saying this if we go down another 10% with a smile on their face.
badharambe
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Agreed. Can't base any actionable move on one indicator or one idea without diagnosing the whole market. Sentiment can go as high/low as an RSI can go low. Oversold can always be "Oversolder".

Totally agree. Anything on any network is pure rubbish. I don't watch any of it because it's just noise. "Squawk box" is most ironic name ever.
Wrighty
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When the market is up so high and has been on such a good run for so long, it seems that the typical "10% drop=correction" and "20% drop=bear market", need to be revisited. If the label for the % drop was proportional to the preceding % climb, then it would make more sense.

Within this thread, it seems that the tone of this market is still good. People are anxious to sink new money in and take advantage of this temporary buying opportunity. I have the same feeling as this right now.

A true "bear market" would have people deciding stocks dont make sense and people predicting far lower lows than current. I dont see anyone on this thread capitulating yet.

Just my 2 cents.
oldarmy1
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Who needs to capitulate on this thread when it's nothing but thin-thin-thin with mostly fun trading throughout? The only people you wait for capitulation signals from are the buy and holds.
oldarmy1
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Ragoo said:

Bought SPY 249 calls expiring tomorrow looking for a quick bounce. Only 1 contract for $75 so no real loss if it doesn't gap up early.


Ragoo steps up and gets paid this morning.

All buys below 2466 are green for some watchful decision making.
oldarmy1
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Nice spike on S&P towards 2500
oldarmy1
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oldarmy1 said:

Ragoo said:

Bought SPY 249 calls expiring tomorrow looking for a quick bounce. Only 1 contract for $75 so no real loss if it doesn't gap up early.


Ragoo steps up and gets paid this morning.

All buys below 2466 are green for some watchful decision making.
I wouldn't take it early. You're gonna get into the money.
ProgN
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oldarmy1 said:

Nice spike on S&P towards 2500
https://www.cnbc.com/2018/12/21/us-stocks-set-for-lower-week-after-fed-decision-government-shutdown-fears.html
Quote:

U.S. stocks gained Friday after Federal Reserve Bank of New York President John Williams said that the central bank could reassess its interest rate policy and balance sheet reduction in the new year if the economy slows.

Williams also said the Fed was listening to the market, but still felt that the U.S. economy was strong.

The Dow Jones Industrial Average gained more than 300 points as athletic apparel company Nike rallied more than 8 percent following strong earnings results. The S&P 500 added 0.2 percent as utilities and real estate investments outperformed. The tech-heavy Nasdaq Composite lost nearly 0.2 percent as Intel shares rallied 1 percent and Cisco added 1.1 percent.

However, stocks are on track for steep losses for the trading week and the month of December.
IrishTxAggie
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You still playing in INVE?
drill4oil78
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For you day traders the SP500 and QQQ just broke through their respective minute reverse H&S neckline. Look for rally to 2530 on SP500 where there is big resistance. Resistance in the 2500 region as well.

Personally I am looking to buy more SH and PSQ in that area.
oldarmy1
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IrishTxAggie said:

You still playing in INVE?


I planted it onbthe move from $3.50 to $6. I sold some covered calls after the failed 3rd attempt to break $6.50 but once those expired for premiums gained my net free holdings have receded all the way back.

With all of their acquisitions its gonna be a while for them to create standardization and plan. Still love the sector. If volume spikes on this big drop I will consider a trade. It's very thinly traded so it takes forever to buy or sale.

The bid/ask is almost always 1 and 1 to hide intent.
Ragoo
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oldarmy1 said:

Ragoo said:

Bought SPY 249 calls expiring tomorrow looking for a quick bounce. Only 1 contract for $75 so no real loss if it doesn't gap up early.


Ragoo steps up and gets paid this morning.

All buys below 2466 are green for some watchful decision making.
i got out of this trade just after the spike at 249. Made a little bit of money. Just felt good to find a winner somewhere.
badharambe
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got interested a little too late this morning. everything feels heavy. looking for bounce to 2460 to begin taking out spy puts.

edit: grabbed some spy 240's using vwap as guide.
FriscoKid
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badharambe said:

got interested a little too late this morning. everything feels heavy. looking for bounce to 2460 to begin taking out spy puts.

edit: grabbed some spy 240's using vwap as guide.
I don't think so.

leoj
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So many 52 week low notifications popping up in my phone
badharambe
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lol. sorry, I tried to translate it from SPY. I meant 246.5 spy, did my math wrong, its ~2470 /es not ~2460.
sold half of spy puts, .17->.48


edit: reason behind trade was bear flag, which is now close to fully executing, and we still haven't seen much panic selling, its been very measured and controlled so far.
oldarmy1
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Anyone for AMZN at $1000? That's where the mega gap is. NFLX $227 as previously posted. Those would be my sale my family and buy levels.
badharambe
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check out weekly chart, seems to have H&S which could suggest a 800-900 target.
oldarmy1
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2350 S&P here we come
oldarmy1
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I bought AMZN $1000 Strike Puts out to Jan 4th just in case
drill4oil78
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FriscoKid said:

badharambe said:

got interested a little too late this morning. everything feels heavy. looking for bounce to 2460 to begin taking out spy puts.

edit: grabbed some spy 240's using vwap as guide.
I don't think so.


The resistance at the 2500-10 level l was rather strong this morning. Stopped the morning rally in its tracks.
leoj
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Sell the family. If only that was possible
FriscoKid
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I really think its going to 2000-2100 ultimately. I just don't see a lot before it gets there to stop it on the chart.
FriscoKid
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Or what about this. Going from 2008 to the ATH and taking a 38% retracement would put it at 2076.

That's not impossible.

Edit: sorry bad math
drill4oil78
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The only thing is a weekly/monthly lower trend line from 2009 (year)that could stop it around 2300. I would think it stops it there and then have a bear market rally, but who knows in this climate.
FriscoKid
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pull up a chart dating back to 2008 and look at the monthly candles. Holy cow
drill4oil78
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That weekly/monthly trend line has stopped every down draft including 2015-16. If you look at the monthly from that far back .... Look at the MACD on monthly basis it tells you everything you want to know. It gave a sell signal in Oct along with the weekly and daily. All were in agreement ... When that happens it is not good.
claym711
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Pick a rip. Go short.
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Dobre casy
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JD with some interesting late afternoon action!
oldarmy1
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AAPL - not a pattern you want to see. You guys know it well.

oldarmy1
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Relentless, merciless
drill4oil78
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2400 on SP500 and 6000 on Nasdaq100 are support areas from a few years ago .... May get there at the end of the day...

Ho Ho Ho Ho down we Go Go Go Go
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