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I took two screenshots of SPY both the daily chart and weekly chart.
The long-term trend is still fine (weekly). However, the short-term is broken as we all know. There are no signs up support short term. We are now day number 2 in the oversold territory. I don't feel like real capitulation has happened yet, so any bounce we get, I doubt will result in the continuation of the bull market. I could be wrong, but I would not be buying now unless you plan to own long-term only. If you do have long term investments that are solid, I wouldn't be freaking out either just holding steady because the long-term trend is still working. This is nowhere near the 2008 crash.
This is interesting. The TA people might really freak out if 2350 is taken out next year. Personally I think we eventually go back to around 2100 when Donnie took office. The market is going to keep dropping until the Fed bends to their selling pressure. That would not be a crash either.
For some individual stocks now could be a good time to take advantage
We don't do that---buy individual stocks because our FA advice is always buy the market
But I am starting to feel that is like buying a bag of potatoes and finding some are already starting to rot...
More than 50% of stocks in the Dow are much lower than the total Dow's drop--
Some as much as 50%...rotten potatoes...
And personally I think the next 3 yrs or so people would be better off looking for individual stocks with max cash to debt ratios and strong market position
Micron seems like it fits that profile from couple of article I read recently...and the leadership seems to understand how to take advantage of playing to the market unrest
They already called for a worst case scenario which means anything better will be a big upside
Next stop for Dow Jones is 18300.. So, i guess it will keep falling till 18300 ish unless something comes out really positive from China ( which i doubt).
too many headwinds, people want to take gains now... I think there are a lot of pension funds that are hitting their stops and have to sell to mitigate risk. This may just keep happening. Meanwhile 10YT is now at 2.76.
I want to rebalance some of my bonds into equities to go more aggressive but I will not touch this market until S&P500 breaks 2100. I've had enough decimation of my portfolio and need a ridiculously good deal to make any moves.
too many headwinds, people want to take gains now... I think there are a lot of pension funds that are hitting their stops and have to sell to mitigate risk. This may just keep happening.
This is a great point. I recall quite a bit of talk in 2008 about fund liquidations to account for the selling. I haven't really read anyone say this is a cause for selling yet. The only item I saw was hedge funds had a hard date of Nov 15 for anyone that wanted to pull money out for the year. We still going down after that date.
I'm calling this: "Silver Linings Playbook" - I had a certain fund I wanted to sell and get it out of my taxable brokerage because it's not tax efficient. However, I also didn't want to sell it and increase capital gains in the current tax year. With the spiral down I looked and saw there is no more gain, so I put in my order to sell the whole thing and accomplished something I'd been wanting to do for many months. I'll redeploy those monies into something more tax efficient. Of course I'd prefer to not have this 'opportunity' and have the totals I had on Oct 1, but lemons/lemonade.
This is a great point. I recall quite a bit of talk in 2008 about fund liquidations to account for the selling. I haven't really read anyone say this is a cause for selling yet. The only item I saw was hedge funds had a hard date of Nov 15 for anyone that wanted to pull money out for the year. We still going down after that date.
Margin calls are also a factor and I wonder with the market dropping so much in the past week if investors who have margin accounts have started to have to meet calls and sell...
And the redemptions when when people sell and go to cash vs redeploying ---
Most of what you read is so negative that only people with longer horizons or with enough cash in other ways that they are forced to sell..
I know Mathjak said he has moved some money into gold and reduced some equity
We didn't do
I think we are going to have to really think about the value we are getting from using a FA if all his advice is just stay the course...
For some individual stocks now could be a good time to take advantage
We don't do that---buy individual stocks because our FA advice is always buy the market
But I am starting to feel that is like buying a bag of potatoes and finding some are already starting to rot...
More than 50% of stocks in the Dow are much lower than the total Dow's drop--
Some as much as 50%...rotten potatoes...
And personally I think the next 3 yrs or so people would be better off looking for individual stocks with max cash to debt ratios and strong market position
Micron seems like it fits that profile from couple of article I read recently...and the leadership seems to understand how to take advantage of playing to the market unrest
They already called for a worst case scenario which means anything better will be a big upside
I do a hybrid; 75% S&P and 25% individual. With individual stocks I control timing of purchase and sales. I also try to follow my stocks closely. I only buy large caps with good balance sheets. I like big pharma stocks because they are interesting to follow, can win big and not likely to go out of business. On my watch list is Eli Lilly, big in diabetes, and Microsoft for cloud leadership both are expensive right now so I am scaling in. I was in Merck but sold about a month ago when it hit 52 week high.
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