Is the Bull-Market Over?

Kind-of insane how fast equities sell off. I presume it's mainly from the algorithmic machines that dump massive amounts of volume all at once. The DOW opened insanely how but sold-off very fast afternoon. I have no hope in these markets anymore. Now, everyone is running around chasing all the bank stocks because hedge-funds, and quant boys are supposedly "shifting their money." Watch tomorrow the huge dump in the irrational run up in financials. This was a nice year, but the huge sell-off in the NQ wiping out months of gains has now put my long portfolio in the red, I am sad.

cheers

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Comments (142)

Dec 4, 2017 - 6:15pm
More Leverage:

Just saw LeveragedSellout is back. Clear sign we're nearing the top.

I would actually prefer for the markets to top off. Quite honestly, a crash seems likely and I have no problem with it happening. There is no new money flowing in the market! Grant it, I am ready to buy put-contracts all across the board. Assuming I am correct, I will make a great deal of money.

Best Response
Dec 5, 2017 - 4:10pm

In my nearly 40 years trading the markets (on the side), I've heard a constant chorus about an imminent crash.

There are commentators who provide very credible sounding reasons as to why equities can't keep rising. Years before the previous crashes they were predicting a crash. Day after day, week after week, month after month.

And the markets kept rising and rising and rising.

But, and here's the crunch, when a "correction" does happen these doom and gloom merchants all jump up and try to take credit for predicting the crash!

You talk about irrational dumps. Are you perhaps trying to blame the irrationality of other traders for your loss? Remember the old saying, "The market can remain irrational for longer than you can remain solvent".

If you do want to play the market, spend time studying some good books on technical analysis (Al Brooks is one good author). Never trade emotionally or based on hunches. Develop discipline - always calculate risk/reward before entering, always decide your stop before you enter any trade.

Dec 5, 2017 - 4:25pm

SB . I always love speaking to veterans in the market as I am learning more.

I strictly use technical analysis on my equity trades. I don't use those silly indicators. Volume and price action ONLY. I had some nice entries on my tech-stocks (basically QQQ) but the insanely, obscenely heavy selling from institutions blasted right through all my patterns last week. I personally believe equities can fall faster than they can rise, too many weak hands on top of heavy algo dumps. It's just annoying, you can have a nice set-up but this sector rotation makes people run around in circles. There is a famous saying, "follow the smart money." At that point, millions of shares being dumped on the market don't care about a couple lines on a chart, do you agree with me?

I'm thinking about quitting this silly line-drawing, and spend more time on my option-contract trades. STD Deviation and basic math/probability is all you need to succeed. I find it amazing that you can set up delta-neutral strategies to secure premium of volatility/time. You don't even need to be directional!

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Dec 9, 2017 - 11:22am

You sound like one of those guys in Wall street Bets that is always posting those charts with a bunch of random lines on them then complains when TA doesn't work.

Array
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Dec 6, 2017 - 3:32am

This was a painful thread to read. You need to really just step back and re-think everything about your approach to the market.

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Dec 6, 2017 - 8:25pm
ForexOptions:

Lets put it this way, when people of your caliper want to sell-off their holdings, does it really matter what two lines on a chart mean?

lol 'caliper' ahhh that's a good one

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

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Dec 6, 2017 - 3:34am

I don't think so. To be honest I think that actually market is priced correctly, you know, valuations are relatively high. In periods of low interest rate P/E is higher, given the CPI and the expected return on your investment.
Companies have a fair quantity of retained earnings, and US banks have a not bad buffer (Tier1) given by that. (tla 20/24%)
I'm more concerned about EU banks, mainly about Italian banks, that have been paying dividends sine the very beginning of EU regulations. Same for other EU banks.

Dec 6, 2017 - 12:58pm

Great insight, +SB. I do agree with that

The name of the game, moving the money from the client's pocket to your pocket
Dec 6, 2017 - 11:26am

OP you do realize that outside forces are shaping the market right now. The sell offs are related to the current political issues, have little to nothing to do with actual fundamentals. There are little to no fundamental issues with the broad market right now, however there could be a crash tied to a major political disruption. But that crash would be very short lived and have little impact on the economy as a whole.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Dec 6, 2017 - 2:41pm

Not really anything major, sure there are fundamental issues in individual companies. But right now there aren't any major systemic issues that could tank the entire market in my view. This is just a long running tail of pushing money out of bonds into other areas like equities and real estate. There are bubbles developing but they are far from catastrophic burst pressure. In my view politics are really the only systemic issue, but again that isn't anything directly tied to the market. That is just a ridiculous moral panic.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

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Dec 6, 2017 - 12:59pm

Spreading panic in a market like this is very stupid. True!

The name of the game, moving the money from the client's pocket to your pocket
Dec 6, 2017 - 2:42pm

You don't see politics impacting the market? You then go on to say the market was impacted by politics...... The market is almost pure politics right now due to the long overhang of quantitative easing.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

  • 1
Dec 6, 2017 - 6:30pm
heister:

The sell offs

The sell-offs in tech (that I mentioned in my OP) is what I'm referring too. It sold off out of nowhere, no changes in the companies, yet they have taking 10% blows in a single week due to institutional selling, and shifting of money.

Dec 6, 2017 - 8:18pm

Yea, those sell offs were profit taking due to political instability. It wasn't out of no where, it just wasn't a normal market trigger.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

  • 1
Dec 9, 2017 - 10:27am

No one strategy works 100% in every market. Keep doing what works, and paper test new strategies until you're reasonably certain you know what your strength is. The last thing I'd like to mention is that I've noticed that professional traders or sports gamblers who consistently make money are the ones who never have 5% or more riding on any one trade. It's a matter of risk management.

Dec 12, 2017 - 5:47pm

Will this Bull Market Go On? How Long? (Originally Posted: 08/05/2017)

Hey monkeys,

So recently, the Dow Jones Industrial Average broke 22000, which brings up the question: will this trend continue? I think that it is fair to say that nothing lasts forever in the stock market. So how long until the bear takes over?

The stock market has surged 20% since the election, making it expensive by almost any measure. The drivers of the rally are well-known: Strong corporate earnings, solid global growth, central bank stimulus and a relatively stable global geopolitical environment.
Geopolitics is impossible to predict. The problem now isn't that there are more risks than usual but that investors are acting as if there are almost no risks. An upheaval involving any combination of Russia, Iran, Syria, North Korea or China might be just the thing to remind investors that the world, and the stock market, can be a dangerous place.

What do you guys predict/assume for the future? Upwards trend or Downwards trend?

Source

Dec 9, 2017 - 11:39am

Banks are admittedly cheap or at least reasonable. It's taken them a long to work off the crisis lack of investor interest. And banks like Citi really benefit from the global growth picking up.

A lot of market moves seem kinda extreme to me last few years. I think it's the lack of prop desks money and more money in the quants and firms with tight stop outs like millennium. You probably have atleast 200 billion in management with strict drawdown rules. So they chase up and down. Instead of bank desks that I think 5-10 years ago could sit on losses.

Dec 12, 2017 - 5:52pm

Market has priced in all of Trumps pro business policies which is an issue since there will be battles up a head. That being said, the market run up has been juiced by Fed policy which is being reeled in now. If taxes can be cut, along with lower regulations and a pro business environment, you could see actual growth fueling the market.

This administration looks to be very much focused on jobs and the economy which could continue this bull market. I do think there will be an eventual correction. Not sure when that happens though.

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Dec 12, 2017 - 5:58pm

Your typical market cycle is 5-7 up and 1-2 down. We're headed into year 8 up.

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Dec 12, 2017 - 6:06pm

It's odd to contribute this to a "pro business" Trump considering there have yet to be any actual plans that someone could point to that would help the economy. He's been all over the place in terms of regulation. From a financial standpoint he's been a mixed bag, saying that he wanted to curb large scale M&A, bring back glass steagall, but get rid of Dodd-Frank (except for capital ratios, because that's never going away). Then he said he will bring down regulations by "75% or more" which is a ludicrous number that has no basis in reality and it's a clear indicator he has nothing specific in mind and hasn't thought through this critically. His strong dollar policies will make imports cheaper, but then the protectionist border taxes/tariffs will off set that and likely end up with net costlier imports. The plan to bring manufacturing home will increase the price of goods, if they actually do get manufactured here, and the retaliatory taxes/tariffs other countries will bring (assuming we bring ours) hurts those local businesses. The only thing you can actually point to that is unilaterally good for businesses and consumers is lower taxes, but most companies are already paying effective tax rates that are extremely low and simply repatriating cash has never shown to be a boom for US economy beyond artificially inflating stock prices (which makes sense in Re: the dow).

So, all in all, it certainly isn't a "pro trump policy rally" unless you don't believe in efficient markets. I would expect some of it has to do with the fact that previously worries about stronger policies from Clinton were priced in. But more than that, and most importantly, earnings have been good, we are in the upswing of a traditional cycle, and the economy has been showing increased growth since middle of last year.

Dec 12, 2017 - 6:42pm

This market is totally bullshit. Money is paper at 27 times earnings. But, there's so much head room. Margins are at 15.4%, corporate profit growth is at 6.3% so far, the highest in this decade, and the Fed confirms higher inflation expectations, predicting a FFR at 1.5% at the end of this year, which is way lower than the long-term rate. Lofty optimism would have most likely continued. But it's shit like this recent Muslim ban that will have a negative impact on outlook. Risk and uncertainty is Trump's game so far, so I bet the market isn't going to like this news and it could be the first to trigger the reality that we're in for a potential clown show with this administration.

Dec 12, 2017 - 6:52pm

Have to say that I agree with @TNA" comments on capitalism, competition, monopolies. By law, competition ought to lead to monopoly, otherwise it's not competition. The thing about capitalism is that it's nice on paper or as an ideological principle but reality is a completely different beast. Once you get into the nitty gritty details of every day life in a capitalist world, the picture is no where near what academic papers and media describe. Unless of course you suffer from cynicism or enjoy turning a blind eye. So what ThrowADart says, much like every other academic out there, they all have a common denominator; an (intended?) absentiism of what happens in every day reality and instead they are just self-secluded in their own theories and ivory towers. They present you with numbers that we ought to take as gospel or, well, scientific yet they are subjective/political since inception. Same thing happened with election/poll results, nice numbers (low unemployment, some growth, recovery etc) yet you end up with people longing for Trump, Brexit etc. Why?

Get real.

Colourful TV, colourless Life.
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Dec 12, 2017 - 6:53pm

Is the current rally in the stock market sustainable? (Originally Posted: 04/12/2010)

Now that dow's over 11,000 and S&P is almost at 1200, will the stock market continue to rally? Considering the weak economy, with the unemployment rate of over 9.5% and a humongous us debt, I don't really see the reason behind the current rally. Is the maket being manipulated or Is this rally mainly due to the stimulus package? Money has nowhere else to flow except into the stock market.. I assume? I have a feeling that one day, when the shit hits the fan, everything is just going to blow up. .

I don't know whether this is a scam or not, but a prophet named Jucelino Nobrega Da Luz in Brazil predicts that there will be a stock market crash on June 15, 2010. He is claimed to have accurately predicted 9/11 and many other incidents. Let's just wait and see whether he's right or not...

Dec 12, 2017 - 7:05pm

Bernanke is a student of the Great Depression. When unemployment started easing in 1937 and interest rates went up, the economy spiraled back into another recession.

Don't expect Bernanke to raise rates this year. There are no looming asset bubbles and deflation is more concerning than inflation at this point.

I would agree though that things are looking rather expensive. Banks still trading on book value rather than earnings multiples. However, it is very difficult to get someone to bet against the trend right now...

Smokey, this is not 'Nam, this is bowling. There are rules.
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Dec 12, 2017 - 7:00pm

agree with bonkers...change in fed language/rates will be key. we saw a correction earlier this year when pboc began tightening, would think that when fed takes out "exceptionally low for extended period" will mark sell off as good economic news will turn to bad news for markets. that being said, would view sell off as buying opportunity...longer term trends of deleveraging/high debt to gdp/sovereign risk will play out over much longer period. at least for next 2yrs or so, with earnings growth expected to be off the charts and multiples at reasonable levels and retail investors largely not participating, i think we can be at 1400 by end of 2012....but just a hunch...

Dec 12, 2017 - 7:04pm

Forward PE ratio for stocks is estimated at 15, the market is not over valued by this measure. Earnings estimates will have to miss by a mile to cause a correction. There is no data that I can point to that says that it will, unless you want to speculate on Black Swans.

Dec 12, 2017 - 7:06pm

I think that consumer confidence is strong. Soon people will buy with credit, which will lead to better rises but a possible crash due to debt and etc. So it depends on governments actions, new tariffs or etc, but I predict is will sustain till government interference or consumer debt. (When government interference i mean such as Banks, GM, and possible medical areas getting affected. )

Dec 12, 2017 - 7:08pm

In terms of the corporate earnings that have actually been accrued, we are talking about a $57 (U.S.) trailing four-quarter trend in S&P 500 operating earnings per share (EPS).

The last time the S&P 500 was rallying towards the 1,200 level in late 2004, the trend in EPS was $68, or 20 per cent higher than it is today, and back then, we had solid and sustained employment growth, low and falling unemployment rates and high and rising capacity utilization rates.

Not to mention that credit was abundant and available to everyone at an extremely low cost, housing and commercial real estate were rising to new heights, and household balance sheets and wealth were hitting new all-time highs.

Market overvalued by 20 - 30%. Correction should come, tough to time - I would say after 2nd quarter of this year.

Dec 12, 2017 - 7:10pm

Inflation, speculation, stock manufacturing for now .... Interest hike coming up, hedge funds making big shorts = market correction.

And the whole prophet bull... come on now! Let me guess, is this the same man that told John Paulson to bet against the economy to make close to $4billion in 1 year right?
Not only that, he is also shorting stock on his e*trade account...

"The higher up the mountain, the more treacherous the path" -Frank Underwood
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Dec 12, 2017 - 7:13pm
Geraint Anderson:
If this Prophet was for real he'd have been snapped up as an Equity Research Analyst years ago! :p

Yeah that's true. In fact, if some people really can do that I'm surprised they wouldn't capitalize on it. Although have you heard of Edgar Cayce? He was a documented prophet, but people started taking advantage of him (i.e. getting stock tips) and I guess he couldn't physically withstand it after a while, so he had to go back to helping people heal illnesses/problems first and foremost

Dec 12, 2017 - 7:15pm

Someone bumped this thread and I'm glad they did. Most people said to sell when the S&P was at 1200. The market has a similar P/E ratio and much better fundamentals and people are still saying 'sell' today. Needless to say, the market is substantially higher now than when this post was first written.

Buy you fucking pussies.

Dec 12, 2017 - 7:16pm

A Bull Market Requires a Healthy Consumer Underneath (Originally Posted: 03/09/2010)

A year ago this week the stock market hit its nefarious 666 level on the S&P 500. Since that historic day, we have enjoyed a 68% appreciation in equities from their depressionary low. Not only has the bounce caused a chorus of perma-bulls to claim the worst of the recession is behind us, but also to declare that the bull market is here to stay.

But the cacophonies from those pundits who are now categorizing the move off the lows as a long lasting trend are overlooking an important point; a viable and sustainable bull market can only exist if the underlying economy and especially the consumer also enjoys the same healthy condition.

Full article at: Bull Markets

http://www.oilprice.com
  • 2
Dec 12, 2017 - 7:17pm

Is This Stock Market Rally a Hoax? (Originally Posted: 03/14/2013)

With the Dow setting new records every day and the S&P approaching its all-time high, the question on a lot of peoples' minds is obviously: WHY? Is this record-breaking rally the result of an actual economic turnaround?

This past May, David Einhorn published an editorial in the Huffington Post about the dangers of the Fed's recent monetary policy decisions. The article's a bit long, but extremely interesting – in addition, Einhorn's a fairly amusing writer and his barely-concealed disdain for Bernanke is entertainingly apparent throughout. Although it's almost a year old, a lot of the points Einhorn makes are extremely relevant as the indexes continues to surge.

Essentially, his argument is that the Fed's cocktail of super low interest rates and quantitative easing might give the illusion of a stock market turnaround, but in reality such policies keep the markets from reaching their natural balance and are harmful to investors in the long term.

Any thoughts on this? Did QE do its job? Is Bernanke an economic wizard or just a misguided academic? Does this bull market actually have any teeth or is the bottom going to fall out sooner rather than later?

Dec 12, 2017 - 7:18pm

we are still unsure....kinda like the existence of Teo's gf

We can't rely on anyone these days, we just have to do things ourselves don't we?

Dec 12, 2017 - 7:21pm

There doesn't seem to be anything in our current economic situation to justify this bull market. Consumers are still de-leveraging, we're still setting new poverty records and our GDP growth is languishing at around 1%

But low interest rates, tech investments, cost cutting, QE, outsourcing, etc are helping corporations see record profits in this environment. Banks have tightened up underwriting and are having a blast buying treasuries and making the easiest money they've ever made. Given how cash rich big companies are are these days I'd consider this the real deal w/ a caveat that it's predicated upon the strength of our bondholder confidence

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Dec 12, 2017 - 7:19pm

The S&P index is based off of the total EPS for the index. The S&P is not a good gauge of the U.S. economy. 50% of the revenue for S&P companies is outside the U.S. Not to mention, companies have become more efficient and have held down cost especially on interest expenses due to low rates.

Array

Dec 12, 2017 - 7:20pm

These are systemic changes along the same order of magnitude of when the dollar was originally decoupled from an official gold standard and gold prices began to flutuate in ways that the previous framework did not have the capacity to explain. I'm not an economist and don't posess the vocabulary to express what I see, so I'm working on it. In the big picture, the market and companies in general are slowly recovering to more sustainable models while the overaching financial system is building an upgrade out of existing infrastructure. Economists heads' were exploding when FDR decided to allow gold prices to change, and they freaked out again when Nixon finalized the process.

It's a paradigm shift

Get busy living
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Dec 12, 2017 - 7:24pm

Amphipathic:
The sea of liquidity the fed is pumping out on a daily basis has to be put somewhere

Yes. My guess is that the government was hoping this money would be invested in the form of loans to small companies and/or expansion of operations with the self fulfilling anticipation of a generally improving economy. In reality, they are pumping this money into the institutional side of things, so returns are being chased in the market: just as the entire housing market was juiced from 1995 to 2006, this time it's the entire economy. Is it a bubble? maybe. But I think there's too much overall change and too much at stake, so instead we see a realignment of the entire global economy. If some small country inflates a bit, they're the only ones that suffer. If the largest and most powerful country inflates a bit....everyone else suffers.

Unfair perhaps, but that's what I see happening.

Get busy living
  • 3
Dec 12, 2017 - 7:23pm

I think when we see the Russell 2000 moving, that is when we can have a better argument on where the economy is heading. Russell 2000 is a good indicator on job creation.

We can't rely on anyone these days, we just have to do things ourselves don't we?

Dec 12, 2017 - 7:32pm

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