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Post by mnfish on May 1, 2023 11:41:11 GMT
Yes, those measuring may show, looking backwards, that a stock market may have gone down during a recession; but stocks are usually zooming up in recovery when the time comes a recession can be confirmed as happened. no bear market after World War II has bottomed out before an official recession was declared by the eight-economist panel of the National Bureau of Economic Research.
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Post by Chahta on May 2, 2023 15:48:19 GMT
I can totally see the Fed pausing now due to the bank crisis. They and their partners in crime have created a mess.
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Post by uncleharley on May 2, 2023 19:04:57 GMT
Yes. The banking crisis seems to be accelerating. Employment seems to be softening, especially in the Tech sector. Precious metals have begun their move up. VIX can't seem to figure out if it should be bullish or bearish. Those are some of the things I see. We find out tomorrow what the fed sees.
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Post by Capital on May 2, 2023 22:40:57 GMT
Well heck if things keep going down here perhaps Argentine Sovereign Debt might start looking good.
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Post by Capital on May 3, 2023 11:29:13 GMT
Well today I expect the FED to hike the FED funds rate another 25bp. IMHO this will be a mistake on top of probably the last 3-4 mistakes for them with their rate hiking. The Banking system is already in shambles from the hikes; and, IMHO the economy is just now beginning to feel the effects of the first few of their rate hikes. They IMHO have overshot what should have been their target. That's MHO and their target is a point that could be discussed for years. The FED funds rate has gone from 2pb on March 2022 to 4.83bp in April 2023. If my math is correct that is 2415%. No wonder the Banks, who are required by law to hold a certain percentage of their investment portfolio in Treasury securities is being demolished. IMHO the FED is the cause of all of this. Now they need to take it on the chin and start correcting their error instead of compounding it with another face-saving rate hike. I do agree that they needed to increase rates; however, it should have started much sooner and at a more gradual rate. I also disgree with their 2% goal for inflation when the long-term average is 3.8%; and, for a very long time we were well below that. OK that is my rant for the day. Sorry for making you read it in the event you do not agree. Have a nice day everyone.
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Post by mnfish on May 3, 2023 12:26:28 GMT
.02 x 141.5% = .0482 On inflation, if you have 2 years of 10% inflation in 10 years, it takes 8 years at 2% to avg 3.6%. The banks that failed were grossly mismanaged. "The balance sheets of the three failed banks shared a vulnerability to rising rates that exceeds that of most other regional banks,”
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Post by uncleharley on May 3, 2023 12:36:13 GMT
The Banking sector as represented by the ETF, XLY had avery rough day yesterday. However The daily chart for XLY indicates the sector could find support soon. There is a developed band of support that has held in the recent past at the 29/30 dollar level, less than 3 points down. A bounce between here and there would indicate there is less to worry about than meets the high. Meanwhile, I am staying the course with high yielding CEF's for income and precious metals miners for Capital Gains. stockcharts.com/h-sc/ui?s=XLF&p=D&b=3&g=0&id=p49527306330&a=441093810&listNum=86
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Post by FD1000 on May 4, 2023 17:11:22 GMT
Well today I expect the FED to hike the FED funds rate another 25bp. IMHO this will be a mistake on top of probably the last 3-4 mistakes for them with their rate hiking. The Banking system is already in shambles from the hikes; and, IMHO the economy is just now beginning to feel the effects of the first few of their rate hikes. They IMHO have overshot what should have been their target. That's MHO and their target is a point that could be discussed for years. The FED funds rate has gone from 2pb on March 2022 to 4.83bp in April 2023. If my math is correct that is 2415%. No wonder the Banks, who are required by law to hold a certain percentage of their investment portfolio in Treasury securities is being demolished. IMHO the FED is the cause of all of this. Now they need to take it on the chin and start correcting their error instead of compounding it with another face-saving rate hike. I do agree that they needed to increase rates; however, it should have started much sooner and at a more gradual rate. I also disgree with their 2% goal for inflation when the long-term average is 3.8%; and, for a very long time we were well below that. OK that is my rant for the day. Sorry for making you read it in the event you do not agree. Have a nice day everyone. Well, imagine if the starting rate was zero, the raise would be infinity. It's easy to blame the Fed using hindsight. But, fighting inflation is probably the most important. We have it pretty good compared to other countries. Just visiting Israel and Netherlands and I see these countries suffer even more. Actually, these markets work well for me. When I stay in MM, I get a nice safe return I haven't seen for years. When I trade HY munies, I can make 2+% in just 1-3 weeks. So, I trade the market I have, not the one I wish to have.
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Post by mnfish on May 5, 2023 13:17:09 GMT
Recent Wells investor letter titled " The Calm Before The Storm" - nuff said?
Don't believe the Fed will cut rates this year but probably done raising Reiterated SP500 range 3700 - 4200
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Post by oldskeet on May 6, 2023 9:56:57 GMT
Hi guys. For the weekending the Barometer produced a reading of 56 (overvalued) for the S&P500 Index. During the week I added to one of my smid funds (EAASX) which was a dip buy and was funded from income generation coming from within the portfolio. I remain invested within my asset allocation 20,40,40 (cash, bonds, stocks).
Why the buy? EAASX at the time of purchase was off it's 52 week high by about 15%. Based upon my valuation mythology the smids are oversold. Thus, the buy. Plus, I will let the fund managers make position calls and decide the better times to move on the smaller banks.
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Post by uncleharley on May 6, 2023 11:43:27 GMT
My junior silver miners put in a bullish candle for the week. Friday was a pause, but perhaps they needed a day off.
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Post by Norbert on May 8, 2023 5:41:57 GMT
Please see the total return chart below. One concern about the S&P 500 (SPY blue line) is the lack of broad strength. Its recent move is dominated by Tech (XLK green line), and is not confirmed by Small Caps (IWM red line). FWIW. (Click to enlarge.)
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Post by uncleharley on May 8, 2023 11:37:44 GMT
I couldn't enlarge the charts, but Yes, the narrow leadership of the general stock market is troubling. The financial sector is especially absent when looking at winners & losers, implying that when the banking crisis sees some relief we will hopefully see a market rally. Meanwhile, I am just sitting and watching.
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Post by steadyeddy on May 8, 2023 12:46:39 GMT
Uncle Warren says earnings will be lower this year... go figure!
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Post by uncleharley on May 10, 2023 20:29:02 GMT
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Post by steadyeddy on May 11, 2023 0:50:44 GMT
Market manipulators (oops... makers). I do not trust this upward bias to stocks mainly because nothing is resolved... not inflation.... not interest rates... not economic growth. I went to subway to get a lunch sandwich. There was nobody in the shop. I asked the owner. He said the economy is very slow and there is no traffic these days.
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Post by Deleted on May 11, 2023 3:38:00 GMT
Market manipulators (oops... makers). I do not trust this upward bias to stocks mainly because nothing is resolved... not inflation.... not interest rates... not economic growth. I went to subway to get a lunch sandwich. There was nobody in the shop. I asked the owner. He said the economy is very slow and there is no traffic these days. So either stock market is looking 6-12 months forward when everything is presumably rosy, or market somehow knows everything going to be fine or market is hallucinating. Assuming market is efficient and incorporates all known information instantly...No way to know, I guess.
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Post by FD1000 on May 11, 2023 16:35:24 GMT
Markets are hardly ever efficient short term. Most should not care or trade. If you are a good trader, volatility is your friend. Many times the markets are not efficient for years. Growth did better than value for over 10 years, the SP500 did better than SC and international over 10 years.
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Post by oldskeet on May 13, 2023 11:45:48 GMT
Hi guys. Not much excitement during the week as Old_Skeet sat and watched the markets do much of nothing. For the week the Barometer fell 3 points to a reading of 53 (neutral). Gee, I thought it would be much lower with the debt ceiling drama taking place. Go figure. Is Uncle Sam and the Plunge Protection Team keeping it propped upped? For me, things just do not seem quite right. But, I remain buckled up as the debt ceiling drama continues. Thinking of adding to my preferred securities fund as it sports a nice dividend and perhaps one of my global equity income funds which has performed well year to date and also for the rolling one year period. Until next week's report I am thinking of just sitting. No rush for me to put new money to work in what I consider to be a false floor market. I am Old_Skeet.
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Post by uncleharley on May 13, 2023 12:32:48 GMT
I haven't touched my buy to hold positions, but I am holding cash where I would normally have a couple of trades going on.
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Post by steadyeddy on May 13, 2023 19:34:09 GMT
I have enough risk exposure to my capital - and still maintaining dry powder. I only see "hope" rallies and "despair" selloffs for the next several months.
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Post by FD1000 on May 13, 2023 22:13:17 GMT
I have enough risk exposure to my capital - and still maintaining dry powder. I only see "hope" rallies and "despair" selloffs for the next several months. Love the narrative but I wouldn't be surprise if stocks continue their rally. Many investors missed the...SPY+VXUS>8%...QQQ>22%. This means SPY is trailing QQQ by 14+%. How many times we heard in the last 6 months that VALUE will outperform growth from the "best" experts.
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Post by habsui on May 16, 2023 3:58:16 GMT
I have enough risk exposure to my capital - and still maintaining dry powder. I only see "hope" rallies and "despair" selloffs for the next several months. Love the narrative but I wouldn't be surprise if stocks continue their rally. Many investors missed the...SPY+VXUS>8%...QQQ>22%. This means SPY is trailing QQQ by 14+%. How many times we heard in the last 6 months that VALUE will outperform growth from the "best" experts. Sorry you missed it, but many didn't.
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Post by archer on May 16, 2023 5:27:37 GMT
I believe institutional investors (the smart guys with the degrees) drive price much more than retail investors. Based on how the Q's are performing relative to SPY, that smart money isn't showing fear of market downturn. And, even if they aren't all that smart, as they invest so goes the market. YTD aggressive sectors are far in the lead of defensive. Q's are way ahead of SPY. The markets are not listening to the commentators pedling fear. Seasonality, aggressive sectors outperform the market substantially May-August. The saying should go "buy in May and call it a day". Stockcharts.com seasonal history vid here, starting at 4:45 in.
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Post by uncleharley on May 16, 2023 12:02:32 GMT
If by aggressive you mean tech versus utilities or discretionary, yes, aggresive stocks are outperforming conservative investments. However if you mean small caps versus large caps, I would have to disagree with the assessment. Fwiw, I have a position in TQQQ which many investors would consider to be aggressive. I also have finger on the sell button and am watching it very closely.
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Post by archer on May 16, 2023 15:11:01 GMT
uncleharley, Yes, that is pretty much what I was meaning by aggressive. To elaborate more, YTD, QQQ,XLK,XLY,and XLC are all well ahead of defensive sectors XLU,XLP,XLV,and XLE. I agree small and mid cap vs large are telling different story, when ideally they would be leading as well. Possibly there has been a shift in the way investors regard the aggressive sectors. Back in the day, the well established Dow companies were looked to for stability, and tech especially in the aftermath of 2000 as more speculative. Now the larger companies of tech and communications are seen as more trustworthy for longevity. If I am right, perhaps the aggressive holdings I point to are actually a flight to safety. Just a thought. Whatever the reason for what is leading, I too am leveraged in Qs and holding XLK, and XLC.
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Post by Deleted on May 16, 2023 16:38:35 GMT
There is an article in FT today on why markets are so resilient and going up when most, if not all, humans are bearish and are on sidelines. Conclusion: Quant (Algorithms) were buying.
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Post by uncleharley on May 17, 2023 17:46:47 GMT
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Post by Deleted on May 17, 2023 18:09:47 GMT
now FOMO will start for human investors if it has not already?
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Post by uncleharley on May 17, 2023 20:32:28 GMT
now FOMO will start for human investors if it has not already? N'yet, but soon.
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