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Waiting for the smoke to clear?

JunksterJunkster
edited March 2016 in Fund Discussions
A common refrain I see here, there, and everywhere. By the time the smoke clears it could be a year or longer down the road and the markets that much higher. After the 2009 bottom it was years before many ventured back into the markets if ever. The news is the gloomiest after major bottoms and prices have zoomed higher. So I guess the question is how many feel 2/11 was not just A bottom but THE bottom for oil, stocks, and junk bonds as well as a low in 10 year Treasury yields?

Comments

  • heezsafe
    edited March 2016
    Since 2/11, the largest "down days" have been characterized by high volume trading, the largest "up days" have been characterized by relatively light volume trading. This is not the profile of a sustainable rally coming off a true bottom. Ergo, I think this is phony upside, without staying power. Analysts continue to quietly adjust Q1 earnings downward. Once disappointing Q1 figures start to get posted next month, it wouldn't surprise me to see that all of this has been levitation, and that it proves to have only been preparation for a second leg down.

    On the other hand, I'm a little like Ed S. in the monthly commentary--- nothing much happening in the stock or bond world makes sense to me any more. Just basically shuffling this and that around, so I'll be better prepared for whatever does happen next, and trying as best as I can to turn off the useless noise/nonsense.
  • MarkMark
    Speaking for myself I used that refrain to address investing in a particular niche of a specific sector of the market, that being major oil companies. At present I see them as a fresh caught fish flopping around in the bottom of the boat. They're smelly but they ain't dead yet. I will be patient while waiting for price stabilization or upward movement. Pipeline companies - now they're a different story. Just as cloudy perhaps but in my mind oil and gas are still going to flow through them no matter what the price of the fuel is so I continued to trudge on through the smoke.

    To be honest with you I have no idea whatsoever if we've hit a bottom in prices and I mostly don't care. I have an investment plan and as long as my portfolio continues to contribute to my bottom line and fund my semi-retirement everyday needs I'm good. That squiggly line which everyone seems to think represents what my stuff is worth only gets my attention when either bankruptcy or an offer to good to refuse looms. That doesn't work for everyone but I'm good.
  • JunksterJunkster
    edited March 2016
    We had some huge moves since the 2/11 bottom that can't be ignored most notably in oil. All bottoms unfold differently. But if this is the bottom it would be one of the more stealth of all time in stocks. We have yet to see a large breadth thrust day/days in stocks that occurs right at/near the bottom. I am woeful at predicting and fortunately predicting/forecasting is not part of my trading process. But if I had to play that game of predicting I would say 2/11 was the bottom but we may go back close to those lows but not breach them. I will say though if the consensus that 2/11 is not the bottom then it most likely was and we just continue onward and upward.

    Edit I sure don't like healthcare/biotech. So using me as a contrarian tool that may be a positive for all those suffering from the decline in that sector.
  • jstr
    Oil service stocks have had statistically significant positive outcomes in the winter and biotech in the fall. A sector model that I use, utilizes oil services, biotech, and utilities combined with a risk management heuristic. It has produced decent returns over 30 years. We will sell out of oil services on May 1.
    https://docs.google.com/spreadsheets/d/1zlgOYdATSzC7YrUE9yE_uY03sHBRTcLUVyKusqqv2tI/edit#gid=113856734

  • TedTed
    @Junkster & MFO Members: I wasn't sure what the market would do until I read Jim Rogers comments on Bloomberg this morning, when he forecast there's a 100% probability of a U.S. Recession within a Year. Now, I more bullish than ever. !
    Regards,
    Ted
    http://www.bloomberg.com/news/articles/2016-03-04/jim-rogers-there-s-a-100-probability-of-a-u-s-recession-within-a-year
  • AndyJ
    edited March 2016
    As usual, I have no idea, but added to junk mortgages after their little blip several days ago, added to stock when the S&P5c made that convincing move above the 50d, and have cut back a little on the rate-sensitive stuff.

    As far as junk corporates go, here's some (imho) halfway decent analysis from a week ago id'ing $81-$83 on HYG as resistance for HY corps - and the price of HYG has been hanging just below that level for the past three days. I'd imagine that's the next test of how far the junk run may go.

    Edit: it's now 5 days that HYG hasn't closed below 80 or above 81.
  • DanHardy
    Looking at the stock index charts, the bounce off the bottom has a very steep slope which to my way of thinking is not sustainable. The down trend lines appear to have been broken.
    If the bounce off the bottom happened over a longer period of time I would be more likely to think it is sustainable. As it is I would bet on the side of the indexes resuming a downward trend.
  • MarkMark
    Just adding a little fuel to the fire so to speak (from Dow Jones via M*):

    Oil Prices Lifted by Supply Cut Hopes
    http://news.morningstar.com/all/dow-jones/us-markets/201603072580/oil-prices-lifted-by-supply-cut-hopes.aspx
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