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Futures this Sunday evening are up nicely in no small part due to the POTUS hailing big progress towards a China trade deal.
But did we not just get sucked in by this same scenario recently? It's like deja-vu (all over again). He has no credibility whatsoever, yet the market still reacts to his silly tweets.
This board occasionally features posters making precise pronouncements about the level of the S&P (or pick your index/indicator) at some point in the future, with exactly zero rationale. Why would anyone take seriously any assertion with no reason, no rationale backing it up?
This board occasionally features posters making precise pronouncements about the level of the S&P (or pick your index/indicator) at some point in the future, with exactly zero rationale. Why would anyone take seriously any assertion with no reason, no rationale backing it up?
Well said.
Furthermore, these unfounded “pie-in-the sky” pronouncements of future market data-points are somehow viewed as more relevant to investing than stories about potential upheaval at the FOMC, government shutdown & gridlock in DC, or a threatened border closing with one of our biggest trading partners.
I learned as a futures daytrader that trading is more an art than a science. A given 'level' of support/resistance may be X or Y, but in reality, it's "around X or Y, give or take Z." I have long since given up the idea of precise prediction on such things, accepting that if I'm "accurate enough" with my analysis, I'm okay with that and probably doing better than most.
Plus, what one person sees as support/resistance on their chart does not necessarily mean it's what others will see on THEIR chart, depending on how things are setup for the person. (T/A is quite subjective.) The only 100% ironclad prediction I will ever make for the markets is that they will fluctuate. That you can take to the bank.
This board occasionally features posters making precise pronouncements about the level of the S&P (or pick your index/indicator) at some point in the future, with exactly zero rationale. Why would anyone take seriously any assertion with no reason, no rationale backing it up?
Exactly. There's no magic formula for making a rational, knowable outcome out of trading by millions of entities with objectives that are all over the place. That's why I don't see value in getting too far out in the weeds with it. It can serve as a whisper of a hint of a probability, but really not much more than that. But at least it's something.
Yep, there I go again, elucidating the obvious!
(And a big yes to Hank's point about the investing environment.)
Predictions are pretty tough and any sort of trying to time the market is foolish. About the best we can do as investors is to practice sound risk management based upon the macro view of the world as we see it.
For example, let's say the market will go up. How much and what is your opportunity cost of not being longer than you might otherwise be (i.e. lost gains). Now if the market should go down, again how much and what is the potential loss.
At this particular time, we're running out of the tax cut sugar high, having a trade war with one of our biggest trading partners (thx Hank), POTUS threatening to fire Powell, very uncertain times in Washington with regard to int'l policy and defense, and the simple fact that All the Kings horses and All the King's men are coming after Donald and he is NOT going to be receptive. Now throw in things like a measurable possibility of a constitutional crisis and civil war. Er, I think the downside risk is considerable. I could see the market dropping 20-30% very easily.
So with regard to MY risk management, I see defense against a serious loss far outweighing any possible gains I'm foregoing.
December 26 was one of those rare Zweig 9 to 1 up volume days something I have discussed in the past. I am not much into technical analysis beyond pure price action but Zweig’s momentum indicator always gets my attention. The bottom in 2009 had a record three within a week. The one on December 16 2008 while proved false for equities did mark the bottom of the bear in junk bonds. The market is already up nicely since the 26th but would be nice to see another 9 to 1 day within the next week or two.
December 26 was one of those rare Zweig 9 to 1 upt volume days something I have discussed in the past. I am not much into technical analysis beyond pure price action but Zweig’s momentum indicator always gets my attention. The bottom in 2009 had a record three within a week. The one on December 16 2008 while proved false for equities did mark the bottom of the bear in junk bonds. The market is already up nicely since the 26th but would be nice to see another 9 to 1 day within the next week or two.
A second Zweig buy today. After today prices are posted it looks like risk on in Bondland - junk corporates and bank loans.
Hi @Junkster Having watched the swings in both market areas; for the past several weeks, one eventually saw support into the government issues areas during the flight from equity areas. Today, Friday, Jan. 4 found that support move away.
You are of the opinion that the "Zweig" movement has pointed towards equity "happy" and bond pricing moving backwards???
To add: When I find (sure there are other examples) many tech. funds moving down 5% day 1 and moving up 5% on day 2 .........well, this just about makes me want to run away and say goodbye to this game.
Edit/Add: I'm relating this to only Treasury issues. Corp. bonds have not fared well during this period, not all supposed investment grade bonds have had price support.
Hi @Junkster Having watched the swings in both market areas; for the past several weeks, one eventually saw support into the government issues areas during the flight from equity areas. Today, Friday, Jan. 4 found that support move away.
You are of the opinion that the "Zweig" movement has pointed towards equity "happy" and bond pricing moving backwards???
To add: When I find (sure there are other examples) many tech. funds moving down 5% day 1 and moving up 5% on day 2 .........well, this just about makes me want to run away and say goodbye to this game.
Edit/Add: I'm relating this to only Treasury issues. Corp. bonds have not fared well during this period, not all supposed investment grade bonds have had price support.
Thank you, Catch
Hi Catch. I hope @Junkster gets back to you. I don’t understand or engage in momentum investing but that seems to be his game - coupled with a high degree of risk aversion. A nice balancing act if you can pull it off.
Just following the chatter over the past week, it appears the spread between Treasuries and junk has increased significantly recently. This would make junk bonds a better value proposition today than 3 months ago. One pundit put the average junk bond yield today at over 8%, whereas it was down around 5% last summer.
I don’t think @Junkster’s positive view here regarding “the Zweig indicator” pertains to investment grade / government bonds. My guess is he’s looking strictly at junk (and possibly BBB). Haven’t been in junk bond funds for more than a decade, but do have exposure to EM bonds which have some similarities.
Comments
But did we not just get sucked in by this same scenario recently? It's like deja-vu (all over again). He has no credibility whatsoever, yet the market still reacts to his silly tweets.
Futures Indexes list
Furthermore, these unfounded “pie-in-the sky” pronouncements of future market data-points are somehow viewed as more relevant to investing than stories about potential upheaval at the FOMC, government shutdown & gridlock in DC, or a threatened border closing with one of our biggest trading partners.
Go figure.
I learned as a futures daytrader that trading is more an art than a science. A given 'level' of support/resistance may be X or Y, but in reality, it's "around X or Y, give or take Z." I have long since given up the idea of precise prediction on such things, accepting that if I'm "accurate enough" with my analysis, I'm okay with that and probably doing better than most.
Plus, what one person sees as support/resistance on their chart does not necessarily mean it's what others will see on THEIR chart, depending on how things are setup for the person. (T/A is quite subjective.)
The only 100% ironclad prediction I will ever make for the markets is that they will fluctuate. That you can take to the bank.
Yep, there I go again, elucidating the obvious!
(And a big yes to Hank's point about the investing environment.)
Predictions are pretty tough and any sort of trying to time the market is foolish. About the best we can do as investors is to practice sound risk management based upon the macro view of the world as we see it.
For example, let's say the market will go up. How much and what is your opportunity cost of not being longer than you might otherwise be (i.e. lost gains). Now if the market should go down, again how much and what is the potential loss.
At this particular time, we're running out of the tax cut sugar high, having a trade war with one of our biggest trading partners (thx Hank), POTUS threatening to fire Powell, very uncertain times in Washington with regard to int'l policy and defense, and the simple fact that All the Kings horses and All the King's men are coming after Donald and he is NOT going to be receptive. Now throw in things like a measurable possibility of a constitutional crisis and civil war. Er, I think the downside risk is considerable. I could see the market dropping 20-30% very easily.
So with regard to MY risk management, I see defense against a serious loss far outweighing any possible gains I'm foregoing.
And so it goes,
peace,
rono
Having watched the swings in both market areas; for the past several weeks, one eventually saw support into the government issues areas during the flight from equity areas.
Today, Friday, Jan. 4 found that support move away.
You are of the opinion that the "Zweig" movement has pointed towards equity "happy" and bond pricing moving backwards???
To add: When I find (sure there are other examples) many tech. funds moving down 5% day 1 and moving up 5% on day 2 .........well, this just about makes me want to run away and say goodbye to this game.
Edit/Add: I'm relating this to only Treasury issues. Corp. bonds have not fared well during this period, not all supposed investment grade bonds have had price support.
Thank you,
Catch
Just following the chatter over the past week, it appears the spread between Treasuries and junk has increased significantly recently. This would make junk bonds a better value proposition today than 3 months ago. One pundit put the average junk bond yield today at over 8%, whereas it was down around 5% last summer.
I don’t think @Junkster’s positive view here regarding “the Zweig indicator” pertains to investment grade / government bonds. My guess is he’s looking strictly at junk (and possibly BBB). Haven’t been in junk bond funds for more than a decade, but do have exposure to EM bonds which have some similarities.