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Discussion Starter #41
I chickened out and went back into the S&P 500 index. Out at 3128, back in at 2475. At the previous peak of 3380 I'll be at 136% of where I was (3380/2475).

I expect that we are going to see this is a bounce based on the signing of the relief bill and we will see another down turn once the reality of April and May sink in. But expecting is different than knowing and I got scarred. I might get brave again if all this volatility and knee jerk reaction to good news takes us back up toward 3,000 soon.
 

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The bounce will be short lived I expect given the dynamic nature of this virus and the lack of taking it seriously by the White House. What the federal reserve did was backstop the banking and financial institutions with a package that could total $14 trillion which will if totally used would dilute the US dollar substantially for a long time coming and hurt the economy even more. As debts pile up banks and financial institutions are covered, once again, while the folks are left to suffer. Can anyone tell me why its important at this time to keep the markets open? What purpose do they have during a global pandemic except to allow those who can game the system with their wealth to increase that wealth on other's hard earned savings. It's morally criminal.
 

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Discussion Starter #44
I have been a few of those things lately and I'm not done yet.

It's sad to see the market so reactive. Screaming up on the promise that good news is coming only to sink down just as fast at any bad news. It all seems so desperate.

I expect that we are seeing that second bump now. It's visible when you back off to a six month chart. With the second quarter supposed to be worse than the first, and the recovery bill effect will fade, the slide down will start again.

Feel free to shoot holes in this, but I think:
  • The upper limit for the next year is several hundred points (S&P) less than the previous peak.
  • The volatility will continue.
  • The worst is yet to come.
If you think about it hard enough there is opportunity there above just ride through it. That upper limit changes things substantially.
 

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Been reading this......

My thought is that we are NOT at the bottom. Recent revivals are fertilized hopes that everyone will jump in.
Stimulus? What is everyone going to do with that money? Can't spend it easily.
I would not consider getting "back in" for about two months. At that time I might move that back some more.

Watch new car sales and truck freight volumes, and add oil price as an interesting item. Truck freight volume is probably the most important, it will increase 2-3 months before the market seems to catch on that things are back to working.
Make no mistake, if the economy isn't back to work the stock price cannot go up.
 

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The below referenced article indicates that trucking tonnage increase is not a good precursor for the SP500, at least it was not in the 2008/2009 recession. In effect the tonnage was still declining when the market had already decided that the bottom was reached.

Truck Tonnage vs SP500:
 

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Discussion Starter #49
Well... not a ton of money. I put 6 and 1/2 percent interest on my portfolio in the bank (holding account) based on recent 1 day buy/sell trade. It's not hypothetical (i.e., real dollar gain). I had to reacquaint myself with the requirements imposed on pattern day traders. I don't expect that I will actually bump into the rolling five day window trade limit though. I'm just not that aggressive. If it isn't a reasonably sure thing, I'm not doing it.

Notice that the market didn't take off like a rocket when the relief bill was passed by the senate today?

Oh, and I wouldn't trust normal precursor indicators, or much of any other indicator until the emotion and panic is over. We haven't even got to the really depressing part yet. I think that comes after we resort to eating anchovies and olives as a meal.
 

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My FA is a real data and history guy, on top of being a big time computer nerd. He has written a trading simulation with MIT that has been tracking ahead of the market pretty well, until recently.

We had our quarterly meeting by phone today (due to corona), and he seems pretty spooked right now. He touched on several issues listed above and a few more as his concerns. About the best bright spot in his report was on holdings we have locked up in a Healthcare REIT, that are doing well. My FA agrees with some previous posts that we will see a big dip, some recovery, and another significant drop. He thinks the recent 3 days could be the upturn before another drop, but the speed that this market is swinging through is baffling. As for when my FA thinks the market will bottom, he is "predicting" Sept - Oct and wants to buy back in before it bottoms so he told me to anticipate some initial loss.
 

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and wants to buy back in before it bottoms so he told me to anticipate some initial loss.

what I have been saying all along

by the time you dollar cost average the current buy in say three years, the difference between the absolute bottom and where you bought will be meaningless
 

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Discussion Starter #53
That depends entirely on how much you are putting in each month and how much you have to buy in at the bottom. Everybody's situation is different. And we don't know how deep or wide this crash is going to be other than worse than it is right now and longer than some would like to admit.

I got lucky on my one day trade. Luck usually doesn't play a part in what I do financially and although I made a bunch of money it was a little humbling. I'm going to try real hard not to let luck play a part again, but I still think those points I made above are correct.
 

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...We haven't even got to the really depressing part yet. I think that comes after we resort to eating anchovies and olives as a meal.
Running out of anchovies and olives would be very depressing. :(
Did you know that you can get anchovy-stuffed olives? Truly wonderful.

 

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This conversation is so far above my head, no idea whether that's good or bad. LOL
 

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I just read an article on CNBC entitled " What could be shocker economic reports may test stocks in weeks ahead". According to this piece, the economic data on employment and manufacturing that will come out in the weeks ahead is not pretty. It will show the impact of the early weeks of the coronavirus shutdown. Some are watching for a retest of the recent lows prior to this past 20% run up.

I have been watching this closely, in order to find an entrance point back into the market. Unfortunately, market timing is like playing Russian roulette! This is why I have always had a love/hate relationship with the stock market !
 

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Discussion Starter #57
Recent revivals are fertilized hopes that everyone will jump in.
I think Terry's comment is well founded. Each of those early day rises weeks ago gave me the feeling someone was intentionally trying to shock the market back to life by injecting money. Recent reading indicates that it was the result of day traders buying in the morning and then closing their positions at the end of the day. That explains the recent end of the day decreases.

Unfortunately, market timing is like playing Russian roulette!
If you accept those three points I mentioned above, buying back at any new low is likely to provide an opportunity to capture a normal years interest in just a day or two. No way would I do this under normally, but the volatility combined with the maximum gain being limited means lots of oppurtunity for 6,7, even 8 percent gains and the the market is not going to leave you behind when you sell. It will come back down - at least for a couple of months. And no matter what you will have done better than having just held the stocks and ridden through like most advisers suggest.

There are some really sophisticated FAs out there, but most of them do not work with individuals. Most of those that do are primarily whole life insurance salesman boosting their income by selling mutual funds. The more money you have invested with them the ore money they make. You pull your money out and their commission goes down.

There is a great deal of truth in dollar cost averaging and holding through the bad, but those are general rules for general times. Anyone continuing to put away a portion of their paycheck every month will be doing them selves a favor. This conversation is more about moving larger amounts of money to maximum effect.
 

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I will add that there are two forces in play here.

Obviously the Covid 19 effect that is worldwide. That alone would be a very major market disruption, likely beyond what anyone could have guessed.

But the second fact appears to be the market was due for a major correction regardless. Economy pointers were showing a slowdown, and not just a couple months worth.

Add those together and you have.....THIS!
 

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I have been watching this closely, in order to find an entrance point back into the market. Unfortunately, market timing is like playing Russian roulette! This is why I have always had a love/hate relationship with the stock market !
Tune out all the noise and just buy in small increments every week. If you buy ETF's or individual stocks you can set an attractive price and see if the buys go through or not. If you look at it in 3 or 5 years it don't matter if you got the bottom of the market since you were close to the bottom and zooming out of the chart it will still be a good buy.

What if you could buy the 1050 VEE at a 30% discount, how long would you ponder?
 

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Discussion Starter #60
That would be teh first time I ever got a really good deal on a V-Strom. However, the difference between entering at 30% down and 50% down is really significant after the market comes back up and then doubles. Might cut off five years to retirement. Or a beach house. Or a McGregor 65 and a Velocity.
 
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