[tgrundke]

Originally Posted by XutvJet

Simple answer here: It's complicated and is going to take time.

There is no quick fix. This whole situation is related to COVID and the government reaction (I'm talking most governments in the world) to the situation.

It's related to the COVID response, but the rot goes far deeper than that. We've lived in a declining-interest-rate world since roughly 2001, this accelerated in 2008 with quantitative easing and zero/negative interest rates. Add in a few trillion worth of MBS purchases and here we are.

As others have called it, the last 20 years of economic policy has created "The Everything Bubble".

As to whether wages will decline as a deflationary act - it's possible, but not likely. The workforce is shrinking, we're hitting peak-Boomer-retirement which will last for a solid 10 years, and data is showing that the youngins' ain't as productive. Add in an accelerating re-shoring of labor and outside of a major catastrophe, I don't see mass unemployment occurring.

Even if unemployment doubled from where it is today, we'd still be short people to work the open positions still available in the economy.

All that said, I see interest rates staying elevated for quite some time. It's going to take 6-12 months before major holders of debt need to roll over their existing holdings...at significantly higher rates of interest. It's very possible that the major pain gets exposed at that point in time.

In short: if you've got cash, you'll be fine. If you're carrying significant debt, it's going to be painful.

It's going to be weird the next 3-5 years.

[Tyga11]

Originally Posted by Fishbuddy

With interest rates hikes, housing market and stock market (leading indicator) how long before auto industry is hit? I see all the time peoples car payments are well over $1,000/ month and I just don't feel this can continue.

What do you mean you 'see it all the time?' Do you work for a car dealer?

[dangerus_car]

not a financial advise, just my opinion. market is making a comeback on the last hour of the friday's trading.

i think today is the shake-out-the-weak day. all the mega caps companies (goog, msft, for example) with the strong balance sheet and cash are at 52 weeks low.

goog never gone lower than 33%, only have that 3 times for the last 15 years. even the covid drop (34% drop) was not as worst as this drop for the past 12 years.
msft same too. for the past 12 years, only covid drop (30% drop) is close to this drop. 2010 only 28% drop.

nvda at lowest
qcom almost at lowest
spy and nasdaq almost at june lowest

fed is already announce 75 points, there will be no other catalyst from now until at least the next CPI in the next 2-3 weeks from now. so my thinking is that today is the lowest, then we will go short term bull until the next CPI or the early season of the earnings due early October.

If earnings are good and CPI are good showing inflation is going down, we are going more upward. but if earnings are bad and CPI also bad, then we will go lower again than June.

i would say buy today or buy monday if reversal happens monday. it's a bloody friday for sure. but next 2-3 weeks will be bull.

next week probably consolidation as market accumulates share.

[NeverL8]

Originally Posted by dangerus_car

not a financial advise, just my opinion. market is making a comeback on the last hour of the friday's trading.

i think today is the shake-out-the-weak day. all the mega caps companies (goog, msft, for example) with the strong balance sheet and cash are at 52 weeks low.

goog never gone lower than 33%, only have that 3 times for the last 15 years. even the covid drop (34% drop) was not as worst as this drop for the past 12 years.
msft same too. for the past 12 years, only covid drop (30% drop) is close to this drop. 2010 only 28% drop.

nvda at lowest
qcom almost at lowest
spy and nasdaq almost at june lowest

fed is already announce 75 points, there will be no other catalyst from now until at least the next CPI in the next 2-3 weeks from now. so my thinking is that today is the lowest, then we will go short term bull until the next CPI or the early season of the earnings due early October.

If earnings are good and CPI are good showing inflation is going down, we are going more upward. but if earnings are bad and CPI also bad, then we will go lower again than June.

i would say buy today or buy monday if reversal happens monday. it's a bloody friday for sure. but next 2-3 weeks will be bull.

next week probably consolidation as market accumulates share.

I feel the same way. We should still see a good sized bear market rally before another huge leg down. Bought shit load of TQQQ today. Looking for a short term swing.

[Chick Webb]

Originally Posted by TheRussski

I feel the same way. We should still see a good sized bear market rally before another huge leg down. Bought shit load of TQQQ today. Looking for a short term swing.

Not to throw water on your party, but next week (last week of September) is historically the worst week of the year for stocks, and October is the worst month of the year. If you're buying triple Q's you've got bigger stones than me.

[NeverL8]

Originally Posted by Chick Webb

Not to throw water on your party, but next week (last week of September) is historically the worst week of the year for stocks, and October is the worst month of the year. If you're buying triple Q's you've got bigger stones than me.

End of September and October is going to be volatile no doubt. But everything is oversold already at these levels, hence I’m playing a bounce. I will DCA if it goes lower, but I think we’re very close.

[antzcrashing]

Originally Posted by TheRussski

I feel the same way. We should still see a good sized bear market rally before another huge leg down. Bought shit load of TQQQ today. Looking for a short term swing.

TQQQs here is bold. And I am pretty bold, but not that bold

[dangerus_car]

not a financial advise, just my opinion

on monday, two things can happen (see friday's last hour trading)
1. it will rally and if it is, it shows that it hits a higher low since it's a bit higher than june low
2. if monday goes lower, it will go lower just a little bit below (0.5% max below the lowest june low) the june low for SPY and QQQ, again, to shake-out-the-weak as you can see on today's trading, it reaches low, then went back up pretty strong. once it hits that low below June low, it will go back up strong, it can happen either after few hours in early trading pre lunch (probably pre market sunday and monday market will go lower than june low, to shake those out), then start trading monday, all sells after stop losses, or slowly going down, then go back up after 1 PM EDT.

as i m pretty sure, many stop losses are around that area, market makers are going to feast on that stop losses, that is if you are playing QQQ and SPY.

if you are playing stock, i don't think it will go lower than fridays low, especially for mega cap. just check on thursday. when SPY and QQQ went red, MSFT, GOOG, AAPL were actually green, very strong, it just went red friday due to SPY and QQQ pressure that was too strong. if early monday is sell, mega caps will not go lower than friday low.

then the rest of the last september week will be a consolidation week as Market Makers will start its accumulation phase, then early first week october is mark up week, 2nd October week is distribution week, then come the CPI report. CPI will make it either a stair case going up again, or will go down big red to erase all the first week mark up gain.

that's my assessment, play-by-play for the next 3 weeks

[NeverL8]

Originally Posted by antzcrashing

TQQQs here is bold. And I am pretty bold, but not that bold

High risk, high reward.

I will only be holding it till end of the year, or if we do get the rally I’m anticipating for.

[NeverL8]

Originally Posted by dangerus_car

not a financial advise, just my opinion

if you are playing stock, i don't think it will go lower than fridays low, especially for mega cap. just check on thursday. when SPY and QQQ went red, MSFT, GOOG, AAPL were actually green, very strong, it just went red friday due to SPY and QQQ pressure that was too strong. if early monday is sell, mega caps will not go lower than friday

I was surprised my SOFI, PLTR and Nvidia held up pretty well today.

[dangerus_car]

Originally Posted by TheRussski

I was surprised my SOFI, PLTR and Nvidia held up pretty well today.

exactly, i don't play sofi, pltr, but i do play nvda, and nvda holds up well even when the SPY and QQQ went down hard, nvda didnt go that much lower as it's already well below its june low.

AAPL held up strong because of iPhone 14 sales report. if iPhone 14 report is weak, it would have gone at low $140s or even high $130s. but that analyst reports make it held up well at $150.

you will see monday.

[antzcrashing]

Dear protectors of young naïve investors,

My deepest apologies but I am going to post something from wall street bets reddit

Because it is an interesting take from a seasoned economist

I recommend sitting down with a glass of water before you click this link

Good luck

https://www.reddit.com/r/wallstreetb...tm_name=iossmf

[Tyga11]

Originally Posted by dangerus_car

not a financial advise, just my opinion

on monday, two things can happen (see friday's last hour trading)
1. it will rally and if it is, it shows that it hits a higher low since it's a bit higher than june low
2. if monday goes lower, it will go lower just a little bit below (0.5% max below the lowest june low) the june low for SPY and QQQ, again, to shake-out-the-weak as you can see on today's trading, it reaches low, then went back up pretty strong. once it hits that low below June low, it will go back up strong, it can happen either after few hours in early trading pre lunch (probably pre market sunday and monday market will go lower than june low, to shake those out), then start trading monday, all sells after stop losses, or slowly going down, then go back up after 1 PM EDT.

as i m pretty sure, many stop losses are around that area, market makers are going to feast on that stop losses, that is if you are playing QQQ and SPY.

if you are playing stock, i don't think it will go lower than fridays low, especially for mega cap. just check on thursday. when SPY and QQQ went red, MSFT, GOOG, AAPL were actually green, very strong, it just went red friday due to SPY and QQQ pressure that was too strong. if early monday is sell, mega caps will not go lower than friday low.

then the rest of the last september week will be a consolidation week as Market Makers will start its accumulation phase, then early first week october is mark up week, 2nd October week is distribution week, then come the CPI report. CPI will make it either a stair case going up again, or will go down big red to erase all the first week mark up gain.

that's my assessment, play-by-play for the next 3 weeks

Why don't you think we can go lower? In the last 3 recessions we dipped over 10% the previous low (triple bottom) so it's possible we can go at least 10% lower than June lows.

I hope you're right though. What made me stronger was early 2020 when everything was going down 4% everyday for what seemed like 3 months. Now we can handle anything!

[dangerus_car]

Originally Posted by Tyga11

Why don't you think we can go lower? In the last 3 recessions we dipped over 10% the previous low (triple bottom) so it's possible we can go at least 10% lower than June lows.

I hope you're right though. What made me stronger was early 2020 when everything was going down 4% everyday for what seemed like 3 months. Now we can handle anything!

Right now everything is oversold, and it’s near june bottom. You can also see the mega cap stock like goog, msft that has been down for more than what they had for the last 15 years.

The next key catalyst is next month cpi on October 13. If this report shows inflation is still hot, then we will go lower than june. If cpi cause it down, at that point, the rsi won’t be oversold

I do believe that fed was wrong to raise 75 points. Cpi report lags since it shows price at a month ago while market always look ahead in the future. He should have raise 50 points. Gold. Lumber. Gas, are all down.

[Chick Webb]

Originally Posted by antzcrashing

Because it is an interesting take from a seasoned economist

I watched that live and it was impressive! He's on pretty regularly and I love his commentary, generally. Obviously, he's been teaching monetary theory at Warton for 50 years so he's forgotten more than I'll ever know. I wasn't so sure about yesterday's rant, though. I strongly disagree that Powell couldn't be the next Arthur Burns (or Miller) if he turns accomodative too quickly. There's way too much money still in the system and if the Fed eases off the brakes inflation will come roaring back.

He was certainly right that inflation has started to drop and I share his concern about the Fed going too far. But we've seen little evidence, so far, of a broad softening in the economy overall. Inflation is still high and isn't going back to anywhere near 2% for at least 18 months. Unemployment hasn't gone up. Housing prices may have started to fall, but they need to go down about 10% and we're nowhere near that. Most importantly, the earnings adjustments that must come have not for the most part. Add to the the counter-weight of the IRA and other stimulative policies enacted by the administration in the last two years, and it certainly looks like the economy still has plenty of momentum.

Maybe the Fed doesn't need to go to 4.5-5%. Maybe even the threat of doing so will break something, either here or abroad, that will force the Fed to pivot; it's happened before, remember the Peso collapsing and Orange County's bankruptcy, for instance. But until that happens I don't see a change in course. Which will continue to be bad for the markets. Don't fight the Fed.

References

Arthur Burns - Arthur F. Burns

William Miller - G. William Miller

[Chick Webb]

Originally Posted by TheRussski

I will only be holding it till end of the year, or if we do get the rally I’m anticipating for.

Uh, you do realize that TQQQ is a daily, right? It's not meant to be head for any extended period, not even overnight. In fact, if you do hold it for extended periods you will almost certainly lose money due to the way that it's managed. From ProShares:

Important Considerations

This leveraged ProShares ETF seeks a return that is 3x the return of its underlying benchmark (target) for a single day, as measured from one NAV calculation to the next.

Due to the compounding of daily returns, holding periods of greater than one day can result in returns that are significantly different than the target return, and ProShares' returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. These effects may be more pronounced in funds with larger or inverse multiples and in funds with volatile benchmarks.

Investors should monitor their holdings as frequently as daily. Investors should consult the prospectus for further details on the calculation of the returns and the risks associated with investing in this product.

TQQQ - UltraPro QQQ

[NeverL8]

Originally Posted by Chick Webb

Uh, you do realize that TQQQ is a daily, right? It's not meant to be head for any extended period, not even overnight. In fact, if you do hold it for extended periods you will almost certainly lose money due to the way that it's managed. From ProShares:



TQQQ - UltraPro QQQ

You’re correct, due to decay.

I’ve made over $20k last year short term swinging TQQQ and SQQQ.

It’s very risky, but only time you need to worry about decay when markets stay flat. In this volatile inviroment….triple leverage is great IF you know how to swing it properly.

[Tyga11]

Originally Posted by TheRussski

You’re correct, due to decay.

I’ve made over $20k last year short term swinging TQQQ and SQQQ.

It’s very risky, but only time you need to worry about decay when markets stay flat. In this volatile inviroment….triple leverage is great IF you know how to swing it properly.

Interesting...

[antzcrashing]

Originally Posted by TheRussski

You're correct, due to decay.

I've made over $20k last year short term swinging TQQQ and SQQQ.

It's very risky, but only time you need to worry about decay when markets stay flat. In this volatile inviroment….triple leverage is great IF you know how to swing it properly.

I can confirm that TQQQ can be a power(shares) move, especially when it's on a tear. Similar shorting through puts when done right is a power move. Anything regarding it is high risk as even Robinhood will tell you. I would place it just shy of direct margin trading in terms of risk. In my mind TQQQ is reserved for when you are absolutely convicted, or need a strong hedge of something else you are doing that is unbalanced.

[NeverL8]

Originally Posted by antzcrashing

In my mind TQQQ is reserved for when you are absolutely convicted, or need a strong hedge of something else you are doing that is unbalanced.

I would definitely not dump your whole portfolio on it, but small percentage works for me, and DCA if it goes lower.

[tgrundke]

Originally Posted by dangerus_car

Gold. Lumber. Gas, are all down.

It's not just commodities we need to worry about. Those are leading indicators of inflation.

Inflation has moved from commodities into services. This is why inflation is so damned pernicious: it moves from one asset class and section of the economy into another.

With re-shoring of manufacturing, mass retirement of boomers, a decline in overall worker productivity, the increase in energy costs due to policy, etc., we can expect inflation to stay elevated for quite some time.

Barring sudden, extreme demand destruction across all asset classes, we ain't out of this yet. People still have a ton of capital to play with and clearly, based on service statistics, they're still spending.

[tgrundke]

Originally Posted by Chick Webb

Maybe the Fed doesn't need to go to 4.5-5%. Maybe even the threat of doing so will break something, either here or abroad, that will force the Fed to pivot; it's happened before, remember the Peso collapsing and Orange County's bankruptcy, for instance. But until that happens I don't see a change in course. Which will continue to be bad for the markets. Don't fight the Fed.

The fed has stopped buying MBS and also started QT over the summer to the tune of $90+ bn per month. Both of these actions are going to help withdraw "the slosh" running through the economy. As such, you are correct, they may not need to go to 4.5-5% to achieve their goal.

There's ~$3tn in excess liquidity that needs to be drained. That's going to happen.

Will something cause the Fed to reverse course? Sure, always possible. It would have to be something absolutely catastrophic for the Fed to reverse course and begin tapering again. They know the mess that they've created the last 20 years and unfortunately, we're in the "everything bubble" where it's impossible to tell what might be the straw that leads to a collapse.

My bet is that we don't see "the pain" until Q1/Q2 next year when large holders of debt will start rolling over into a significantly higher interest rates. Housing has just started to roll over. Wait for 8% mortgages in Q1/Q2 2023.

Servicing $100mm in debt at 2.5% is very different than at 4 or 5%