Post: #301

@Sleazy- look up Reg T margin. Its goverment set. It allows you to basically go 200% long, then margin calls you when equity reaches margin loan. You can't margin out on options/futures tho.

Im trying to stay about 150% long.

Its just enough to add juice, but not enough that I can't handle a -50% market correction.

Post: #302

The market is in sell mode now as far as I'm concerned. This will be pretty obvious to most who have been keeping up with if close the past few weeks.

There are several tell tale signs that an unhealthy market environment will exhibit.

The first, obviously, is the market is declining most days. Today, for example, the market was kind of limping around ( on the DJIA) around negative 30 - 70 for most of the day and it ends down over 160. In corrections/bear markets, you'll see the market do things like this.

The indices may be flat, slightly down or slightly up for most of the day, but they end down on their lows at the end of the day. Not good if you're long.

These kinds of environments, I stay 100% in cash if I do individual stocks. Of course, mutual fund investors and long term young guys in funds can ride this out. Especially if you're dollar cost averaging.

I wouldn't even think about margin. Like I said, I'm not even in any stocks now. 100% cash except the long term mutual funds.

Other aspects of a weak market environment is Leading Stocks that are forming bases and then have base failures or failed breakouts.

In a healthy market that is conducive to taking long positions, leading stocks are forming bases such as the cup and handle and breaking out of these patterns:



The flat base:



There are many other familiar stock patterns besides the above two. There are probably at least a dozen or more popular stock patterns that are indicative of a healthy market ( stocks are forming patterns from which they can "take off" from )

I'll do another post in the future on choice things to look for when analyzing potentially profitable chart patterns.

Back to the subject of leading stocks forming good bases. Leading stocks actually were doing that up until recently and the potential for a lot of profitable breakouts was there.

However, once they were forming these bases, instead of taking off and 'breaking out' and heading higher, we've been getting lots of base failures.

When stocks break out of a consolidation (aka base ) to the upside, it all but confirms the market is in a healthy uptrend and you can take that as a green light to start going long.

However, when good bases and consolidations are breaking down, it means there's trouble afoot. The interesting thing is, many of these base failures began to happen before the current market environment turned down in earnest. So, base failures of leading stocks can be a leading indicator of sorts.

Here's a few examples of base failures:






The first image is actually a failed breakout. The stock initially breaks out (increases rapidly in price ) of the base. Instead of continuing higher in the following days, the stock then reverses right back into the base.

There is no follow through here, which is what an investor who is long, obviously wants.

The second chart of KORS is a base failure. You can see KORS was consolidating sideways from around August 13 to the first part of November, forming a base or price range. Around 11/7 or 11/8, the base "fails" and does the opposite of breaking out. It goes down, hence the base failure. the last week or so of that KORS chart to me looks like a dead cat bounce.

When these types of setups go awry with frequency, stocks are telling you something. They're saying; don't buy us. We're not going up. We're going down. Hope and a good 'gut feeling' about a company and even solid fundamentals, won't get you upside in a stock if this condition continues.

In a good market, stocks breakout from legitimate bases and consolidations and follow through to the upside. The indices will end the day at the highs of the session.

In a poor market, stocks have base failures or failed breakouts. The indices end most trading days at the lows of the session.

Very long term investors in stocks who already have a really good profit, can often afford to ride out these gyrations or even corrections. However, for the investor just getting into the market or trying to get some new positions, it is a sure signal to sit in cash until things improve.

Two examples of recent base failures of leading stocks are HRTG and ZIOP. Both were forming decent patterns and the patterns failed.

Also of note, as of last week, some of the leading indices had declined and were almost down to their 50 day moving averages, yet at the same time, the majority of 'leading stocks', those stocks that have been performing the best for some time, were still well above their 50 day moving averages but they were starting to fail in their bases.

This is a potentially ominous sign because it means that these leading stocks may play 'catch up' to the averages and decline to at least their 50 day moving averages. Many of these stocks still had a good way to decline to go all the way down to their 50 DMA.

More downside begets more downside.

I'm not saying this is the start of a new bear market by any means. Hopefully, it's a healthy, measured correction taking place with the market just letting off some steam before it recoups and starts a new uptrend in this bull market that we're currently still in. The current bull market started, of course, around March 2009 after the crash of '08.

The main points of the post are to say that the market is currently in a discernible downtrend. Stocks in general, including even leading stocks are performing poorly with such warning signs as failed break outs and base failures. And the indices in general are exhibiting classic 'correction' behavior such as ending on the lows of the day.

Tread with caution for now.

Post: #303

Since yesterday, the market is foreshadowing danger big time. Precious metals and bonds indicate that the Fed won't be raising interest rates (and may even be expecting a possible round of QE4), but the stock market is down. Low interest rates (and QE) should do the opposite. I've warned people about this: eventually lowering interest rates and QE won't work. People will completely lose faith.

Then it's over.

Post: #304

(08-20-2015 12:19 PM)SunW Wrote:  Since yesterday, the market is foreshadowing danger big time. Precious metals and bonds indicate that the Fed won't be raising interest rates (and may even be expecting a possible round of QE4), but the stock market is down. Low interest rates (and QE) should do the opposite. I've warned people about this: eventually lowering interest rates and QE won't work. People will completely lose faith.

Then it's over.

The Fed has backed itself into a corner though.

It has to raise rates, even if just for symbolic purposes.

If it doesn't raise rates, then it is stuck with QE-Forever...at least until the dollar implodes.

Post: #305

Today:

Dow Jones -358.04 points (-2%)
S%P 500 -43.08 points (-2.11%)
WTI -$0.23 ($41.09/bbl)

Dunno about you guys, but I'm out at this point. Too many indicators that the bottom is about to collapse under us. Or maybe I've been reading too much Zero Hedge.

Post: #306

Deepdiver, no disrespect but you seem to get caught up in these get rich quick ideas. Be very careful with what Rickards is selling you here. Anything that promises profits like that will often fail. Making money simply isn't that easy.

I mentioned multiple ideas because you also seemed to be interested in throwing darts at private companies. Hopefully here you refrain from attacking me in this thread like you did in that thread.

Just looking out man and I promise, unless you get lucky, making money isn't that easy. But selling those newsletters is very easy and very profitable.

Post: #307

I'm now 100% short. Go big or go home.

Post: #308

Stock market collapses are the best time to make money. The 29' crash made more millionaires than any other time in history.

Always look for opportunities, never stress.

Post: #309

Anyone have an favorite ETFs that bet against the market?

Post: #310

(08-21-2015 05:47 AM)samsamsam Wrote:  Anyone have an favorite ETFs that bet against the market?

SDS - ProShares UltraShort S&P500

Post: #311

Canada might be the first country to experience what every country will experience eventually:

- Low interest rates
- Increasing inflation
- Rising unemployment

I feel bad for Canadians; I saw not too long ago that their food prices are also increasing, yet their CB is doing nothing to help them. They are being robbed blind. But this will happen to everyone eventually.

Post: #312

I'm new to stock investing this year and having been putting away small amounts into the Robinhood app. In just a couple weeks, my gains over the last 6 months were wiped out and I'm close to being down to my principal amount. I'm thinking about cashing out at this point sitting it out these next couple months

Post: #313

Had a feeling something like these last few days would happen. Got a long term Put in a financial stock, been reaping the benefits over the last two days.

-CD

Post: #314

Time to start buying and buy buy buy in the next coming weeks!!

The average man will run away from the fire, the wise man will run towards it to cash in.

Post: #315

I have stops on my ETFs that I rachet up every 60 days.

The stops are 11-15% losses because I have been burned by some 8-10% dips over the last few years selling too soon (Like if next week the market goes up I would have been burned with tighter stops).

If they get hit I will look forward to buying in at much cheaper prices if we take big drops which is all I really defend against.

Since last spring I have heard so many rumblings about this fall coming.

I'd would feel shocked if the DOW hit 19k by Christmas. It feels like it has a much better chance of hitting 14k.

Post: #316

(08-20-2015 01:06 PM)Easy E Wrote:  

(08-20-2015 12:19 PM)SunW Wrote:  Since yesterday, the market is foreshadowing danger big time. Precious metals and bonds indicate that the Fed won't be raising interest rates (and may even be expecting a possible round of QE4), but the stock market is down. Low interest rates (and QE) should do the opposite. I've warned people about this: eventually lowering interest rates and QE won't work. People will completely lose faith.

Then it's over.

The Fed has backed itself into a corner though.

It has to raise rates, even if just for symbolic purposes.

If it doesn't raise rates, then it is stuck with QE-Forever...at least until the dollar implodes.

Maybe the market expects a rate hike, but with it falling like it is, I don't know how the market can expect this. This is a very peculiar situation right now: the markets are falling, yet many participants expect no rate hike and possibly QE4. Not a good sign at all.

And gold is up. Up! I would have thought on day three, it would finally be down.

You're right on though; if the Fed does do QE4 without a rate hike, it's over because they'll be stuck in an infinite QE loop.

Post: #317

(08-21-2015 05:48 PM)Travesty Wrote:  I have stops on my ETFs that I rachet up every 60 days.

The stops are 11-15% losses because I have been burned by some 8-10% dips over the last few years selling too soon (Like if next week the market goes up I would have been burned with tighter stops).

If they get hit I will look forward to buying in at much cheaper prices if we take big drops which is all I really defend against.

Since last spring I have heard so many rumblings about this fall coming.

I'd would feel shocked if the DOW hit 19k by Christmas. It feels like it has a much better chance of hitting 14k.

How do you figure that those stops burned you? I see it the exact opposite. They may have saved you. The reason being is you get stopped out but if you feel that its going to recover you just buy again either at the lower point or on the way back up. I think those more conservative stops are an excellent insurance.

Post: #318

Does anybody have an opinion on the Stock market and the USD coming down together in a big way? This is not something I can remember seeing since I started casually following the markets in 2007.

Post: #319

Loving this market pullback. Brought a position today in Chicago Bridge & Iron (CBI) at $43.15

Post: #320

Hoping the markets continue to drop this month. Gonna buy stocks on the cheap real soon..

Post: #321

(08-21-2015 10:42 PM)Steve9 Wrote:  Loving this market pullback. Brought a position today in Chicago Bridge & Iron (CBI) at $43.15

Why? What's your rationale for CBI?

Post: #322

(08-20-2015 11:14 PM)captain_shane Wrote:  Stock market collapses are the best time to make money. The 29' crash made more millionaires than any other time in history.

Always look for opportunities, never stress.

^ What has happened in the past few weeks and specifically this week, is by NO means a 'collapse'

Not even close.

It's possible we haven't seen anything yet, concerning downside.

I would not be taking new long positions in individual stocks now (mutual funds that you've owned for a long time and are dollar cost averaging into are a different story). If you are buying new positions in individual stocks, you're trying to catch a falling knife in my opinion.

When the market is a falling, over 90% of stocks also fall. This happens no matter how good the 'story' on the stock is.

Right now, the stock market is falling. It is falling until it stops falling and begins to rise again.

I've been a broker for years now and have been through multiple market corrections and major bear markets and crashes.

What this looks like to me, so far, is potentially a topping activity in the market. An over 500 point move is quite significant. Especially since it occurred on high volume.

The stock market doesn't crash from a high, it crashes after it has already declined and looks very 'oversold'.

This was the case in 2008, 2000 and 2001, 1987, etc. During these market crashes, the market declined significantly and was technically way over sold. What happened next? Within a week or less, the markets absolutely crashed creating devastating losses.

I'm not saying that this is what's going to happen now. There's of course, no way to know. What I am saying is that crashes in the market are almost always preceded by the conditions I just described AND the conditions we've been seeing lately.

If you're dollar cost averaging into mutual funds, relatively young and it is your long term money, you'll be fine riding out what could be a market meltdown or the next bear market.

However, if you're buying new individual stock positions after Friday or thinking this is 'bargain shopping' now, I think you're buying too early. There's way way too much risk and volatility in the market now.

My advice is to let this decline play out however it is going to. Let it 'base sideways for a bit'. Let it then, start to come off the lows and show that it is increasing and in an uptrend again, before adding new positions. This is a much safer and much more risk averse way of playing this pull back in prices.

I made a post about how markets top and how multi-year bull markets fracture and begin to come apart in the Black Swan thread. It's the 5th post down on this thread:

/thread-48845....black+swan


For now, I'd be patient. Many investors feel they always have to be 'doing something' to make money. They feel they always have to be taking new positions, tweaking the positions, etc. Often times, especially in the conditions which currently exist in the markets, the best thing to do is Nothing. The best thing to do is sit in cash and stand aside until things settle one way or the other.

Is a flash crash or meltdown probable now? No. Is it possible? Yes! You can count on volatility in the near future. Risk is high. If you like wild swings in the market, you'll love what's coming in the coming days and weeks.

The best thing to do now, as far as I'm concerned, is to be patient.

Post: #323

I think you misunderstood what I was getting at. I'm short right now. I'm definitely not buying since I think this is just the beginning of a bear market. I was out of this market at 18000. I'll pick up some positions if it drops to the 38% or 50% fib levels.

Post: #324

For those that think in terms of market cycles this an interesting theory of something affecting the economy every 7 years:

Post: #325

(08-22-2015 10:15 AM)monster Wrote:  Why? What's your rationale for CBI?

They are being unfairly sold off because of the lower oil prices, however I do not believe they are as heavily exposed to the upstream oil market as the market thinks. They have a huge backlog, $30 billion, of contracts.

It also doesn't hurt that many powerful investors have been buying their shares including Warren Buffett, David Einhorn, David Tepper, and Thomas Russo.