The Stock Market

[imaGoodBoyNow]

Just now, HSFBfan said:

its up 8% in the last 3 months. 1 bad day isn't gonna destroy that 

The whole market is shit

[HSFBfan]

1 minute ago, imaGoodBoyNow said:

The whole market is shit

Its all good man. Thats today. 1 day in the scheme of the makret means shit

[DarterBlue]

A Lesson to Learn: So, yesterday, several individuals who know little about the dynamics of financial markets made celebratory posts on this thread regarding the DOW closing over 29,000. At the same time, a relatively inexperienced trader, buys a stock that has just gained 10% in a day. So, what is the significance of this? I don't mean to denigrate the parties mentioned; however, financial markets have a way of drawing in casual observers and neophyte traders at exactly the wrong time. When you couple that with the fact the averages were extended (see my post from last evening), is was almost guaranteed that stocks were going to sell off sharply today. In fact, the fact that the inexperienced trader is taking the day's losses in stride points to further losses in the near term. The market bottoms when the selling exhausts itself. @HSFBfanin a sense is a proxy for new traders. So, his sentiments reflects those of the inexperienced crowd. 

Based strictly off the day's price and volume action, my point of view is that the selling has not completed itself and that in the coming days (the near term) there will be more. Now it's possible we get a bounce tomorrow given the magnitude of the day's losses. But if we do, I expect further weakness early next week. So, am I calling a top of significance here? No, not unless I see further topping signs in the week ahead. However, I am suggesting that the selling has not exhausted itself yet, despite a week's worth of losses in a day.   

[HSFBfan]

54 minutes ago, DarterBlue said:

A Lesson to Learn: So, yesterday, several individuals who know little about the dynamics of financial markets made celebratory posts on this thread regarding the DOW closing over 29,000. At the same time, a relatively inexperienced trader, buys a stock that has just gained 10% in a day. So, what is the significance of this? I don't mean to denigrate the parties mentioned; however, financial markets have a way of drawing in casual observers and neophyte traders at exactly the wrong time. When you couple that with the fact the averages were extended (see my post from last evening), is was almost guaranteed that stocks were going to sell off sharply today. In fact, the fact that the inexperienced trader is taking the day's losses in stride points to further losses in the near term. The market bottoms when the selling exhausts itself. @HSFBfanin a sense is a proxy for new traders. So, his sentiments reflects those of the inexperienced crowd. 

Based strictly off the day's price and volume action, my point of view is that the selling has not completed itself and that in the coming days (the near term) there will be more. Now it's possible we get a bounce tomorrow given the magnitude of the day's losses. But if we do, I expect further weakness early next week. So, am I calling a top of significance here? No, not unless I see further topping signs in the week ahead. However, I am suggesting that the selling has not exhausted itself yet, despite a week's worth of losses in a day.   

So what I'm glad today happened. I buy more now for cheaper 

[DarterBlue]

3 minutes ago, HSFBfan said:

So what I'm glad today happened. I buy more now for cheaper 

I have tried  my best to teach you. But now I am not sure I can. You don't understand the most basic principle of the markets: It is stronger than you and you cannot bend it to your will. If you never master that concept, you will never go anywhere in your account, as each win will be followed by losses of equal or greater amounts. 

[HSFBfan]

12 minutes ago, DarterBlue said:

I have tried  my best to teach you. But now I am not sure I can. You don't understand the most basic principle of the markets: It is stronger than you and you cannot bend it to your will. If you never master that concept, you will never go anywhere in your account, as each win will be followed by losses of equal or greater amounts. 

But than u buy more. Eventually it has to go higher than ur original purchase price if ita a strong stock. 

There are stocks that bounce up nicely and if u watch it closely enough you will catch it. 

Thats what I have noticed watching the market

[HSFBfan]

14 minutes ago, DarterBlue said:

I have tried  my best to teach you. But now I am not sure I can. You don't understand the most basic principle of the markets: It is stronger than you and you cannot bend it to your will. If you never master that concept, you will never go anywhere in your account, as each win will be followed by losses of equal or greater amounts. 

Btw i am down a total of 4 bucks 

[Atticus Finch]

24 minutes ago, DarterBlue said:

I have tried  my best to teach you. But now I am not sure I can. You don't understand the most basic principle of the markets: It is stronger than you and you cannot bend it to your will. If you never master that concept, you will never go anywhere in your account, as each win will be followed by losses of equal or greater amounts. 

Yeah, he's an idiot.

[maxchoboian]

9 minutes ago, Atticus Finch said:

Yeah, he's an idiot.

"...down a total of 4 bucks"

Dude's a honey badger. Doesn't give a shit if he lost 80% of his portfolio or not. He's probably going to let that remaining $1 ride. Riverboat gambler.

[HSFBfan]

Nice get for southwest 

https://thepointsguy.com/news/southwest-airlines-long-beach-california-lgb-slots-jetblue/amp/

[DarterBlue]

44 minutes ago, HSFBfan said:

But than u buy more. Eventually it has to go higher than ur original purchase price if ita a strong stock. 

There are stocks that bounce up nicely and if u watch it closely enough you will catch it. 

Thats what I have noticed watching the market

Nothing has to go higher. Go look at 20 year charts of CSCO and INTC, to name just two stocks. Both made their all time highs at the top of the dotcom bubble and have never reached those prices again since. Or if you prefer look at GE. Same story. If you always average down, you will eventually bust out. If you don't learn that from me, the market will teach you for sure. I am trying to help and not hurt you. But you are too damn prideful. In this game humble wins and proud goes to the dustbin of history.  

[HSFBfan]

4 minutes ago, DarterBlue said:

Nothing has to go higher. Go look at 20 year charts of CSCO and INTC, to name just two stocks. Both made their all time highs at the top of the dotcom bubble and have never reached those prices again since. Or if you prefer look at GE. Same story. If you always average down, you will eventually bust out. If you don't learn that from me, the market will teach you for sure. I am trying to help and not hurt you. But you are too damn prideful. In this game humble wins and proud goes to the dustbin of history.  

Yes i agree with you that some stocks never recover. There is absolutely no disagreement there 

You gotta have somewhat faith. But when the time comes if u have cut and get out than u have to make that move

In the words of Kenny Rodgers every hand is a winner ever hand is a loser 

[DarterBlue]

Stocks closed broadly and decisively lower on much higher volume. A day like this was in the cards. As I have noted for many days now, we had two problems. First, until Tuesday of this week the markets breadth had been deteriorating over the past two weeks markedly. Second, the NASDAQ, in particular, but also the DOW and S&P had gone above the upper trend line of well determined trend channels and in the case of the NASDAQ, it had gotten over 700 points about its 21-day moving average. Finally, yesterday, several posters on a football message board, who as far as I know are not particularly knowledgeable about financial markets, were celebrating the DOW’s climb above 29,000. None of this was good for the market’s short term health. On the day, the range of losses was from 2.34% on the NYSE to 5.23% on the NASDAQ 100. Losing stocks led advancing ones by margins of 4-1 on the NYSE and approximately 4.5-1 on the NASDAQ. Another interesting statistic was that on the NASDAQ there were 52 stocks that made a 52-week low while only 42 made a 52-week high. Why is that significant? Yesterday, the NASDAQ made an all time high. Just a day after there were more 52-week lows than highs. What this shows is the incredible narrowness of this advance. Some further comments on the day’s action. Both the DOW and NASDAQ indices and the S&P all traded down to their 21-day exponential moving averages. All found support there and bounced off. Since early May, the NASDAQ in particular has more or less held above its 21-day moving average. Yes, it has breached it twice, but has quickly bounced back and regained it in short order. It is unusual for any index to hold above its 21 day for four months in a row. That the NASDAQ has done so, is testimony to the strength of this bull market leg. With that said, while I don’t currently think this bull move is over, I suspect that this go around the NASDAQ will breach the 21-day and test the 50-day. This would not be unusual at all; however, if it does this and can’t hold the 50-day, then the bull market could be dead in its tracks. The next three trading days are of critical importance. Back on June 11, the NASDAQ had a day exactly like this. However, for the NASDAQ it was a one day scare as it quickly bounced back and was making new highs in short order. For the DOW and S&P it took many weeks to eclipse the June 8 highs with the DOW just doing so in the last two weeks. It would be a mark of great power if the NASDAQ can bounce back as quickly this time. I suspect it won’t but given the crazy market action we have had this year would not be surprised if it did.

 On the day, I got taken to the cleaners. Earlier this week (Tuesday), I was up nearly $35,000 on the day. Today, I lost $25,580 or 4.02%. Thus, after four trading day, I am net positive about $8,800 on the week after being up $41,000 through Tuesday. That has been a pretty humbling experience. It is why you have to be forever vigilant in this game. All my eight positions lost ground today. Several were down significantly. The damage was thus: ZM, down 9.9%; TTD, down 9.8%; SHOP, down 5.5%; LOW, down 5.3%; ZTO, down 3.8%; DHI, down 3.2%; MDY, down 3.04%; and NEM, down 2.07%. When you added it all up, it translated to a 4% down day overall, largely because I had an unfilled position in cash. Interestingly, I tried to fill that position today with a second attempt to buy UAL at 36.10. However, UAL never got there (lowest was 36.14) and actually closed up on the day. So, go figure.  

[HSFBfan]

Justice Dept. Plans to File Antitrust Charges Against Google in Coming Weeks

https://www.nytimes.com/2020/09/03/us/politics/google-antitrust-justice-department.html

[DarterBlue]

A Few Comments: First the market. Today, significant technical damage was done. However, the selloff was not surprising given the extended nature of the averages and the narrowing of an already narrow advance. The best case scenario would be if the market opened lower Friday and then reversed to close higher. That would signal a likely bottom. On the other hand, if we open down (the futures are down as I type this) and continue lower we will likely take out the 21-day moving averages and test the 50-day moving averages of the NASDAQ and S&P over the next few days. If those fail to hold, then we will be in corrective mode of indeterminable time and price which could signal the end of this bull market run. However, this would be detrimental to the chances of the incumbent DJT. As such, I would expect the administration to do whatever it had at its disposal to keep the market up at least through the election.

This would of course include putting significant pressure on Fed Chair Jay Powell to further ease monetary conditions, including possibly buying equities in addition to bonds. For this reason, I see the market having a potential backstop at least till early November. With that said, I will let the price action be my guide, as this Administration has also demonstrated an alarming degree of incompetence which could end up defeating its attempts to calm and prop up markets.

Second, tomorrow I will be travelling to South Florida (Dade County) to spend the Labor Day weekend with my sister and her family. As such, I will not post Friday's comments on the market till Monday evening (Labor Day) of next week.  

[HSFBfan]

Down 200 for the whole week not bad 

[imaGoodBoyNow]

[golfaddict1]

1 hour ago, imaGoodBoyNow said:

Nothing wrong with a little correction and profit taking for a few days.  Tuesday, it will be interesting to see if the market begins green in any index and does value continue to show some support or does growth continue to push the p/e further on momentum buy ins on a recent dip?

 
 

[imaGoodBoyNow]

On 9/3/2020 at 7:17 PM, DarterBlue said:

A Few Comments: First the market. Today, significant technical damage was done. However, the selloff was not surprising given the extended nature of the averages and the narrowing of an already narrow advance. The best case scenario would be if the market opened lower Friday and then reversed to close higher. That would signal a likely bottom. On the other hand, if we open down (the futures are down as I type this) and continue lower we will likely take out the 21-day moving averages and test the 50-day moving averages of the NASDAQ and S&P over the next few days. If those fail to hold, then we will be in corrective mode of indeterminable time and price which could signal the end of this bull market run. However, this would be detrimental to the chances of the incumbent DJT. As such, I would expect the administration to do whatever it had at its disposal to keep the market up at least through the election.

This would of course include putting significant pressure on Fed Chair Jay Powell to further ease monetary conditions, including possibly buying equities in addition to bonds. For this reason, I see the market having a potential backstop at least till early November. With that said, I will let the price action be my guide, as this Administration has also demonstrated an alarming degree of incompetence which could end up defeating its attempts to calm and prop up markets.

Second, tomorrow I will be travelling to South Florida (Dade County) to spend the Labor Day weekend with my sister and her family. As such, I will not post Friday's comments on the market till Monday evening (Labor Day) of next week.  

@DarterBlue if you leave the country is there any restrictions on how you can trade from overseas ?

[imaGoodBoyNow]

And @DarterBlue if you had to pick one airlines what would it be? 

[DarterBlue]

On 9/6/2020 at 12:25 PM, imaGoodBoyNow said:

@DarterBlue if you leave the country is there any restrictions on how you can trade from overseas ?

It depends on multiple factors: 

1. Do I keep assets in the USA and retain US citizenship. If I do this, I will still need to file a USA tax return which will vary depending on my tax status.

2. Which country do I go to? This will affect whether I will have access to US incorporated companies. Some USA companies list on foreign stock exchanges as well as US exchanges.

3. Does the country I go to have a vibrant domestic stock market. If they do, I may not need to trade USA companies which will involve foreign exchange risk in addition to market risk.

In short, it could get complicated.  

[DarterBlue]

6 hours ago, imaGoodBoyNow said:

And @DarterBlue if you had to pick one airlines what would it be? 

It would be either UAL or LUV, but for different reasons. I like the price and volume pattern in UAL (technical reasons) but I prefer the fundamentals of LUV. 

[imaGoodBoyNow]

1 minute ago, DarterBlue said:

It would be either UAL or LUV, but for different reasons. I like the price and volume pattern in UAL (technical reasons) but I prefer the fundamentals of LUV. 

What do you mean of fundamentals?

[DarterBlue]

1 minute ago, imaGoodBoyNow said:

What do you mean of fundamentals?

Fundamentals include the following: 1. Value of company's assets. 2. The amount of debt they carry (the less the better). 3. Whether the cash flow is positive (it's negative for both but less so for LUV because of the decline in air travel). 4. The trend in losses (are they decreasing). 5. Unused lines of credit (availability of cash). 5. The routes serviced. 6. Trend in revenues (have they started to recover). 7. My assessment of management's quality.

Technical action, on the other hand refers to price and volume patterns and how the respective charts look to my eye. 

[DarterBlue]

Stocks closed broadly lower on lower volume across the board. Still, the losses incurred were well off day lows. In fact, late in the trading day, some of the indices including the DOW and S&P briefly went positive. However, they could not sustain the recovery and ended closing lower but well off day lows. In fact, depending on the index day lows were put in mid to late morning and in the case of the two NASDAQ indices in particular were well below the closing lows, as at one stage, the day looked like a repeat of Thursday. At the close, the losses ranged from .38% on the MID Cap index to 1.27% on both NASDAQ indices. At the lows, the NASDAQ indices lost in the 5% range. Losing stocks led advancing stocks by margins of 3-2 and 21-13 on the NYSE and NASDAQ. At the lows the margins were greater than 4-1 on each index. No doubt there was a reversal of sorts Friday. However, it lacked the power to lead the indices higher on the day. As I type this the futures, with the exception of NASDAQ futures, are higher coming off a great day for the European indices. Whether this will hold up or not, is the million dollar question. All the major indices breached their 21-day moving averages. However, aside from the secondary indices they closed at or near the 21 day. A few of the major indices also breached their 50-day moving averages. However, with the exception of the MID Cap index, they all closed well above the 50-day. The market is at a critical juncture. If the 50-day cannot hold, I will liquidate most, if not all, my positions. As an intermediate term trader, I am not willing to hold through a sharp correction, particularly with the uncertainty of the election facing us. Should we penetrate the 50-day early this week, I will wait to see if the indices can bounce back later in the day or at least by the following day. If they cannot then I will go substantially to cash.

 

A Wild Ride: On the week, my equity was taken on a wild ride. At the conclusion of the first two trading days, I was up approximately $41,000 which represented a gain of just under 7%. Things were looking really good. Then came the final three days of the week. Not only did I give back the entire $41,000, but I ended up losing $2,503 or about .4% on the week. If I did this for thrills, it would have been one hell of a week. However, since I do it for profits, it was quite disappointing.

The Technical Picture of my Positions: Despite the bounce in the market Friday, I was still down $11,328 or 1.85% on the day. Seven of my positions closed down on the day while one broke even. Several of the losers lost quite heftily. The following is a brief evaluation of their technical condition after the blood bath of Thursday and Friday. ZM was down 3% on the day but actually finished in the upper end of the day’s range. At day lows, the stock had nearly filled the gap it created off its big earnings report. Despite giving up more than 50% of the gains on the gap up it made Tuesday, the stock is still well above its 21-day moving average. The question is, is it broken (did that gap up constitute an exhaustion gap) or will it find support here and once again resume its uptrend. I am willing to give it a bit more leeway here especially if the market does not continue violently down. Its fundamentals are quite good despite the high valuation and it is not yet technically broken. The fact I have booked some profits on it and am still up significantly on the remaining holding, also provides some confidence to give it at least a couple more days. TTD crashed through its 50-day moving average and closed a bit below it. It is in significant technical trouble and needs to stabilize or bounce here quickly. Another bad day early this week, and I will likely sell it, particularly if I don’t like the market’s action. LOW is having its first meaningful correction of this bull leg. It closed below its 21-day moving average but held above the 50-day. It has also held up better than its chief rival, HD. This is a relatively low beta stock with very good fundamentals. Unless the market gives a clear sign it’s rolling over (which is very possible) I would like to hold it. SHOP was down well over 100 points (10%) at its lows of the day. It has now carved out its most significant pullback since this bull run started. If it cannot hold Friday’s lows, it needs to be sold. The good news is that it made day lows early and closed powerfully off them. We will see soon whether it is broken or not. ZTO was the only position that did not lose me money on the day. It market its day lows just after 10:30 am and powered higher strongly after that. Unlike my other holdings, this one is more dependent on foreign goings ons and on whether DJT follows through on delisting Chinese stocks in the USA. Like SHOP, it is on a short leash. DHI made day lows at about 11:30 am at which point it bounced off its 50-day moving average. As of Friday’s close, it is not broken. Its future will be determined by the industry group (homebuilders) of which it has been a leader. For now, I am willing to give it some more rope. NEM closed down a percent and seems to be trying to make a bottom. However, being a gold miner it will rise or fall with the fortunes of gold. A weak dollar will propel it higher as will a Fed induced inflationary policy. MDY was down .5% on the day. Its chart looks okay relative to the Russell. However, both have underperformed. I will keep it for now if the market rights itself but will get rid of it if the current weakness persists.