Stock scream room

[sophie]

Ad, good to hear from you!!!

I figured that the "routine tests" excuse for hospitalizing Boris Johnson was just a euphemism. I was not at all surprised that he ended up in the ICU. It will be quite an event for a major head of state to become a COVID fatality, but that is a strong possibility at this point.

[Vil]

Technically speaking

As I can see today we are again headed north (is there such a thing, or can I just say non-south ?).
Maybe all the bulls waked up this morning overwhelmed by the 'signals' of the triangle breakout : ) -

EndlessJoy.jpg (31.98 KiB) Viewed 10073 times

my broker has filled my 'inbox' with that joy - seems on 6th is the breakout that happened Personally, never understood drawing anything beside horizontal support/resistance lines ...

[ochotona]

Nomura was quoted in ZH today: "The steep rally in global equities looks to us like a “bear squeeze” rally, powered by exits from bearish positions that investors accumulated during the downturn". That makes more sense to me than investors are looking forward to the economy re-opening. That's just nonsense.

[pmward]

Technically speaking

As I can see today we are again headed north (is there such a thing, or can I just say non-south ?).
Maybe all the bulls waked up this morning overwhelmed by the 'signals' of the triangle breakout : ) - EndlessJoy.jpg my broker has filled my 'inbox' with that joy - seems on 6th is the breakout that happened Personally, never understood drawing anything beside horizontal support/resistance lines ...

Trend lines can be just as strong and valid as horizontal resistance levels, though the trend line that broke yesterday was a short term trend line, which means it was a signal for short term trading. And yes, the breakout technically happened yesterday (and even on the horizontal axis we set a higher high on the daily chart yesterday), and today is technically confirmation if it holds its gains. Momentum and rate of change are also rising on both daily and hourly charts. TLT is also telegraphing a pullback right now where momentum and rate of change been coming down since March 23rd while price still was increasing. All in all, yeah evidence in favor of the stock bull case just keeps mounting by the day, while the evidence for the bear case keeps diminishing. If this is going to be a fake out rally, it really needs to break down fast.

[pmward]

Nomura was quoted in ZH today: "The steep rally in global equities looks to us like a “bear squeeze” rally, powered by exits from bearish positions that investors accumulated during the downturn". That makes more sense to me than investors are looking forward to the economy re-opening. That's just nonsense.

Oh I'm sure that has a lot to do with it. The purpose of a "bull trap" rally isn't just to fake out the bulls, it's also to fake out the bears. But if we get a weekly close over that 2850 area where the first leg bounced, we have to really start considering the fact that we may be wrong. Bear markets do many things, but one thing they do *NOT* ever do is have a "bear squeeze" 4th wave rally go higher than the bottom of the first leg down, and the first leg bounced at 2850. If we close above the 2850 we can say we are for sure not in a 4th wave rally in a downward impulse wave, we instead were in a 3 phase downward corrective trend, and are now in the first leg of a brand spanking new up trend. We are literally dancing on the line in the sand as we speak. Anytime you're playing a direction you also have to look at what level in the opposite direction proves you to be wrong, and 2850 is it. I'm literally sitting with my finger on the trigger to either buy or sell in the coming days depending on how this resolves.

[Cortopassi]

So this 2850 level, how much is based off technicals vs. fundamentals?

I don't understand how there can be a valid technical level at this point when fundamentals are completely unknowable. How many companies will report losses? For how long? Usually traders have an idea with guidance. That is currently impossible.

How long will it take any sizeable amount of consumers to get anywhere near back to normal?

I cannot see this bounce being sustainable, but of course that's why I don't trade!

[pmward]

So this 2850 level, how much is based off technicals vs. fundamentals?

I don't understand how there can be a valid technical level at this point when fundamentals are completely unknowable. How many companies will report losses? For how long? Usually traders have an idea with guidance. That is currently impossible.

How long will it take any sizeable amount of consumers to get anywhere near back to normal?

I cannot see this bounce being sustainable, but of course that's why I don't trade!

Haha, fundamentals don't matter. At least not on anything less than a multi-year timeframe. In the 1 day - 1 year timeframe all that matters is sentiment. Sentiment is driven purely by emotion, not by logic or numbers. This is why you're confused, and why you will always be confused if you look to fundamentals to drive short term moves in the markets. 2850 is a technical level. There are multiple "resistance" levels around that area that should hold *if* we are truly in a bear market. Most importantly, in a bear market by very definition you have to have lower lows and lower highs. You cannot be in a bear market if the 4th wave up goes above the low of the 1st wave down. You've at that point had a high that broke above a previous low. This instead is the very definition of an uptrend. So it technically would be impossible to still be in a bear market if we close above 2850. The big funds will be watching those levels, and if they have conviction in the bear case they will sell. If they instead are bullish, they won't and the bull case will continue to unfold.

[Tortoise]

I cannot see this bounce being sustainable, but of course that's why I don't trade!

Completely agree. I think enough economic damage has already been done by the global shutdown that, even in a best-case scenario, it will take longer than we think to completely "re-boot" everything back to where it was.

And the economic shockwaves are initiating chain reactions that we're only starting to see and will play out over the coming months (possibly years) in ways we can't predict. Unintended consequences on steroids.

[ochotona]

Another ZH headline - "Fade The Rip": BofA Warns "Bear Market Far From Over Unless We Escape A Recession"

[pmward]

Another ZH headline - "Fade The Rip": BofA Warns "Bear Market Far From Over Unless We Escape A Recession"

This morning I believe it was Morgan Stanley that came out and said that the time to buy was now, that the bottom was in. What does this tell me? Morgan Stanley likely want to unload stocks, and BofA likely wants to buy stocks. These analysts are notorious for making media releases that help their own internal desires.

[barrett]

I just don't see much economic activity at all right now... most people I know are working from home if at all. Stocks going up like this just doesn't make sense to me.

[dualstow]

I just don't see much economic activity at all right now... most people I know are working from home if at all. Stocks going up like this just doesn't make sense to me.

Isn’t it just anticipation of a cure, sooner rather than later?

[barrett]

I just don't see much economic activity at all right now... most people I know are working from home if at all. Stocks going up like this just doesn't make sense to me.

Isn’t it just anticipation of a cure, sooner rather than later?

Maybe. Is there a cure imminent? I have had the news turned off today.

Damn, dualstow, just saw in your sig line that Pussy Galore has left the building.

[ochotona]

S&P down for the day! Hit resistance, rejected.

[dualstow]

S&P down for the day! Hit resistance, rejected.

Darn. I stopped looking at 2:45 and went to do chores in the garden.
(That’s right, Barrett. Mountaineer also mentioned it outright, probably in the Kat Klub thread.
and GT in the youtube thread).

[Vil]

Darn. I stopped looking

I am quite convinced that looking at the major indexes for any purpose except being informed on what non-retail investors think for the market, should be strictly prohibited . And actually there is the PP not to care about what all those hedge funds managers and their high speed machinery think. For VP games there are the scanners/screeners enabling day and swing trading outside all those major index companies' stocks (that are very often replicas of the previously mentioned non-retail investors perceptions ) .. This is the way I feel things... not necessarily correct.. I do not know if all that increasingly traded indexing stuff and ETFs did not actually 'kill' those index stocks.. It's rare that I feel having good enough level of confidence on what will happen with the major indexes.... boom 5 billions and index goes up, boom 10 gazillions and index goes somewhere else..
Disclaimer: And not that today I am particularly pissed of indexes (as did good job on some EU 'holiday' stocks in the morning.. seems people were heavily dreaming for summer vacations while drinking their morning coffees..)

[dualstow]

Darn. I stopped looking

I am quite convinced that looking at the major indexes for any purpose except being informed on what non-retail investors think for the market, should be strictly prohibited .
..

I was looking at stock prices to tear myself away from the news. But I fully agree with your recommendation.

[Vil]

to tear myself away from the news

Yeh, I try not to watch news anymore, they are putting so much extra burden on my psychе. Not sure if at some point we would not all fall prey to what Stalin said a long ago - "A single death is a tragedy, a million deaths are a statistic". But that has nothing to do with stocks of course .. (and long live the forum's administrator). Have a good day, pm, for me it is time to play some evening soccer outside my house ...

[yankees60]

Stocks higher on news that Bernie drops out of race.

I guess stocks think Sanders would have been bad for the economy!

When I look up the definition of "understatement" in the dictionary they had your last sentence as an example!

Vinny

[dualstow]

Stocks higher on news that Bernie drops out of race.

I guess stocks think Sanders would have been bad for the economy!

Wow! I wonder how long the boost will last.

[yankees60]

Stocks higher on news that Bernie drops out of race.

I guess stocks think Sanders would have been bad for the economy!

Wow! I wonder how long the boost will last.

As I'm listening to him speak live on C-Span I'm reminded at how overjoyed I am that he no longer has an kind of formal national platform to speak. He now just fades into the background just like all the other candidates who have suspended or ended their candidacies.

I am shocked how so many were duped into NOT seeing his particular supreme egocentricity and clearly placing self needs / desires over country.


Vinny

[Cortopassi]

Per my previous post of I can't believe two big up days in a row are sustainable and thinking about buying SDOW.

God damn I am glad I don't trade anymore.

[pmward]

Stocks higher on news that Bernie drops out of race.

I guess stocks think Sanders would have been bad for the economy!

Wow! I wonder how long the boost will last.

Considering each of the last 2 hours that the market has been up the volume on SPY has been in the bottom 10% of the range in hourly volume over the last 6 weeks... I would say not long. Where there is no volume there is no conviction. It's up not because of people buying, but because of people not selling.

[ochotona]

I will officially freak out at 3082. Not before.

[pmward]

I will officially freak out at 3082. Not before.

Instead of freaking out, get a plan in place in case you're wrong, imo. We are in a trading range right now, and I have a plan for both bull and bear cases. Mind you, my portfolio is obviously biased to the bear case so I'm right there with you in expecting a further drop... but if the market tells me I'm wrong who am I to argue? Having a macro big picture narrative is important as a starting place for research... but one of the cardinal sins of any technical or quantitative strategy is to stick to your narrative even when the signals in your strategy are clearly telling you that your macro narrative is wrong. Also remember, being early is the same thing as being wrong. That being said, I do believe the probability is higher for a breakdown than a break out. But a legit sustained breakout is possible, and I am prepared for that scenario, no matter how much I do not think it makes sense just yet. Who am I to say that all the bullish signals being thrown are false? The trend will eventually answer this question for me, it's up to me to simply ride that trend either way, and not argue with it.