Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
Worst point drop in history amid coronavirus fears
I know not what will happen with the virus, how bad it gets, how and to what degree it gets contained. But regarding the market...In 10 years of live trading I have never seen anything like the moves the ES has put in this week. I wasn’t around for September-October 2008. I do recall a few wild days in August ‘15, January ‘16 and Christmas to New Years of ‘18. Those were nothing like this. Especially today. Using 20 point stops I took three different trades today in es (gold, euro and oil have been surprisingly normal). And right now as I type this, its supposed to be the slowest time of the night and I just watched es drop 55 points in an hour.
This market has lost its shit. A lot of opportunities on the short side.
The Fed's rigging of the market has created a situation in which the only way the market can go down substantially is to do it lightning fast. The Fed's weakpoint is that it moves/reacts slowly. A slow, steady decline could easily be countered by the Fed, but the Fed is not agile enough to counter a super quick decline. If the market is going to sustain damage, the damage has to be all done before the Fed can react.
Of course, the other issue is once the Fed reacts, how much dry powder does it have left. With rates already pretty low, the answer is not much.
R.I.P. Roy Goldberg (srgtroy), 1965-2023.
Please visit [url="https://nexusfi.com/off-topic/60226-srgtroy-r-i-p-brotha.html[/url] for more information.
These days the QE's never end. Best money is on long side for a long time. Until that changes, odds are BTFD keeps working in some fashion -- just look for length of time to recover each pullback for signs when we really are heading to a reversal of trend.
Even then, pick a 5 year cross section of markets and you'll find bull trends far more than bear, so for me at least the easier money, or the money that comes more naturally let's say -- is always on the long side.
And that's coming from a guy that is disgusted with what the US government is doing today along with what seems to be a ridiculous number of Americans. No matter how crazy I think things are, the insanity would be to be short in a bull market.
Don't quote me on it but I remember reading somewhere that fatality rate of normal flue is 0.1%, while this Corona-19 is showing in range of 2-3%, SARS was 8-9%.
Also, casualties are mostly in 35+
Other problems are,
1. Long incubation period
2. It can survive in air for long time (sometimes days)
3. It is showing different mortality rate in different countries, some suspect further mutation if not data fudge. Check Iran's data
4. Places like Hospitals have higher chances of being attractive breeding grounds for it
5. Most countries except maybe 2-3 don't have enough facilities needed to test for it.
6. WHO has lost people faith due to its support to China in fudging numbers in initial period
Basically, people are more scared about what it can do in future, and also suspect that we don't really have enough measure to contain that.
Economically speaking peoples and good transport getting effected is very bad. So I guess drop is to be expected till anything substantially positive comes out
Why I say interesting is because neither of them have tracked down patient zero (or place or source of infection) and neither of them know how many more infected they have, also infected numbers more than tippled in last 3-4 days in those places.
I generally agree with you. I'm not advocating being bearish. I'm just saying that the Fed's meddling with the market has exacerbated the 'escalator up elevator down' phenomenon which is why pullbacks increasingly come only in ever more short but violent bursts.
R.I.P. Roy Goldberg (srgtroy), 1965-2023.
Please visit [url="https://nexusfi.com/off-topic/60226-srgtroy-r-i-p-brotha.html[/url] for more information.
The Corona virus is not the real reason for the actual turmoil in the markets, it is just a trigger. To much money pumped into the markets for many years - but now FED and ECB have no more means to counter react as the interest rates are already in the negative numbers aka cellar...
Markets now react on this and companies, pension funds etc. have to see that this unhealthy race for new ATH around the world had to stop at some point. Which is now. This will bring the risk for investments into everyones eyes. The recession is here!
GFIs1
I have lived through a number of sudden, totally unexpected market drops, some of which began true and deep bear markets.
(How many? My first trade ever was at the end of a deep bear market in 1982, where, largely by chance, I went long almost at the low, and in fact the day before the low was reached.... a feat I never managed again, of course. The Dow, by the way, dipped under 800 to make that low. Think about that number for a moment: 800.)
The virus has the potential to seriously disrupt the worldwide economy, especially given the importance of China as a manufacturing center, and the closely connected global markets. So who knows how large the impact will be, and the emergence of this virus certainly was not something that could have been foreseen.
But one thing that every one of the big drops I have seen, and I believe of every big drop, is that the markets were extremely complacent leading into the event, which made them vulnerable to a sudden realization that something really bad could be happening that would upset the apple cart.
Not something I foresaw either, of course.
However, while this can get much worse, the long term (perhaps very long term) is still most likely to favor the bull case. The long term, obviously, can be very long term. It's not likely a time to be looking for bargains yet.
As to the government and any agency, Fed included, nothing in the world can convince me that they were doing anything else besides what everyone else was doing: riding along with the trend, and they didn't really know when it would end either. The politicians didn't even have an inkling it would, of course, but were willing to take credit for it without having anything to do with it. I think the permabears and the other critics knew as little, although they will now announce that they called it -- and won't say they were just stopped clocks.
Now the 20/20 analyzers will explain it all, of course.
If there's any point to this, it's to accept the new reality and make your decisions accordingly, realizing that there will be an end but that it won't be all that foreseeable either. And yes, I think the bull case will eventually prevail. Just keep your powder dry.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
Wholeheartedly agreed, in fact my telegram chats are already getting flooded with "See, I predicted it" from garden variety of analysts. Some of them are astrologers, pigeon counters, fundamental analysts and technical analysts.
But like you, I don't think anyone knew why it was going up and why it is getting shot down all of a sudden either.
