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The bigger picture is that we have never come off an interest rate environment of .25 percent for 7 years and QE. The Fed is now unwinding it's balance sheet. THis is unprecendented. To suggest that since the Fed has raised rates recently, disproves the poster's sentiment seems short-sighted in my opinion.
You further state:
never fight the fed?
oh really?
fed has raised rates over 10x in last few years and stocks have gone up dramatically...
please don't spread silly slogans like that....unfortunately people might act on them and commit financial suicide
They're still doing QE but through their partners, some of whom are also buying US stocks either directly or through national pension funds or sovereign funds. Recent practice has been that the Fed will raise rates so long as there are asset purchases being undertaken by the Bank of Japan. Treasury prices have been so distorted by the purchases and the negative deposit rates that adjustments upward in debt yields and corresponding losses in bonds may have a similar effect on stocks. It may be a slow unwind as now, or it could be something like 1987 when they abandoned the Plaza Accord.
The other way to examine how much stock prices have deviated from historic trends is to get a chart of the S&P 500 and draw a regression line from his starting point (January 1, 1985) to the present. The regression line is currently at 2083. It's not a clear indication that it's a bubble, but 40 percent above the line is a long distance (or roughly a 30 percent haircut off the top). This leg down may be over soon since bonds are rallying and the 200-day moving average is being tested by the Dow.
I don't understand that (it's above my pay grade) but I hope you're right.
I increased my holdings 25% last week, and this week has had a lot of pucker factor for me (and all of us). I'm not tempted at all to make another move, even if we start to recover.
Unless something major happens, I'm not expecting to do any more trades, in fact I may be in for my permanent investment pending a market recovery. I'm glad I didn't buy more, even if it recovers. I'd have twice the pucker had I purchased the 50% I had intended before I consulted with my stock buddy last week.
Half of something is better than all of nothing. I won't feel bad looking back at a missed opportunity (assuming the market recovers in the next few weeks).
Whatever, I think we all agree that the Street will be down for Thursday.
I have a meet with my stock buddy tomorrow. We'll noodle it out. I'll report back. He's smarter than me.
This and your other post stating that you increased your stock holding by 25% last week indicate you are trying to outsmart and time the markets. Good luck. You are trying to outsmart idiots.
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