Post: #1

As of 10:30am today, the Dow is down nearly 500 points. It took a steep dive at the end of last week.

http://finance.yahoo.com/news/u-s--stock...02330.html

Quote:Wall Street plummeted early Monday -- with the Dow falling as much as 1089 points -- as traders aggressively sold stocks and bid-up only the safest asset classes.

All three major U.S. market indexes are now in contraction territory, a 10% drop from a recent high. The latest round of selling comes on the heels of the worst week for the broad S&P 500 since 2011 that stripped more than $1 trillion in market value from U.S. equities.

Global equity markets faced selling across the board on the day. China's volatile Shanghai Composite (000001.SS) crumbled 8.5%, wiping out its gains for the year, while Japan's Nikkei 225 (^N225) tumbled 4.6%. The selling ricocheted across European bourses, sending the Euro Stoxx 50, a gauge of large-capitalization eurozone companies, sinking 5.3%.

Small correction or sign of something greater economic turmoil?

Post: #2

I am more concerned about the bond market than the stock market.

Post: #3

My opinion is this is the long-awaited correction that we've been waiting for.

Considering the entire "recovery" is nothing more then central-bank fuelled debt-backed bubbles in the stock and bond markets, the downturn is not at all unexpected.

Hence why I'm out of the market till further notice.

Post: #4

Stock market has been on the up and up for 5-6 years now. That can't keep on going forever, so I knew there would be a correction of about 10-12% at some point.

Now that it is happening, I'm diving for bargains. Then again, I'm in it for the long term, so my stock strategy is "buy and forget".

Post: #5

There goes my 401k again

Post: #6

I think this is more of a warning shot. We see there has been no true economic recovery, and that is pretty common knowledge unless you see some snake oil salesman liberal "economist".

Basically the last 6 years of "recovering" has been borrowing out of control amounts of money at unsustainable rates, all to pay more and more people to not work or only work part time. All the while, the world's second biggest economy, China, has been growing at unsustainable rates and is a giant bubble that appears to have popped.

We can see it is a house of cards. But the Fed will now probably choose to not raise interest rates this fall. It has been expected the Fed would raise interest rates this fall, but now it looks more unlikely. So the house of cards will get propped back up for a while.

The major drop will probably occur between 2016 and 2020. Even if the country is put back on the right path, it is probably too little/too late at this point. $20 trillion of debt and that many out of work citizens is a recipe for disaster.

Post: #7

The Sky is falling!

Post: #8

It's funny. I've been watching markets pretty keenly since I was about 18. Today I noticed all over my FB feed people freaking out and commenting about the pullback. I guess they're all grown up now with 401ks and suddenly care about the markets. But yeah, this was expected and overdue in my opinion.

Post: #9

I am interested in how the dollar has been falling along with the stock market. Normally we see the opposite.

Post: #10

(08-24-2015 10:20 AM)presidentcarter Wrote:  It's funny. I've been watching markets pretty keenly since I was about 18. Today I noticed all over my FB feed people freaking out and commenting about the pullback. I guess they're all grown up now with 401ks and suddenly care about the markets. But yeah, this was expected and overdue in my opinion.

A drop was expected, I agree. But it was more in line with the Fed's raising interest rates. Things are bad enough that the Fed really cannot raise interest rates now because the drop already hit.

Unless we get a big move back up and quickly, and then the fed may try to raise interest rates, and if so this will all occur again.

Post: #11

(08-24-2015 10:22 AM)Jaydublin Wrote:  I am interested in how the dollar has been falling along with the stock market. Normally we see the opposite.

The Fed most likely will not raise interest rates due to this stock market sell off. So interest rates will stay near 0%, and that makes the USD a crappy investment. You get nearly 0% growth and in the US we have almost 2% inflation year to year. So if you were invested in USD, you are guaranteed to lose money every year.

Post: #12

(08-24-2015 10:23 AM)It_is_my_time Wrote:  

(08-24-2015 10:22 AM)Jaydublin Wrote:  I am interested in how the dollar has been falling along with the stock market. Normally we see the opposite.

The Fed most likely will not raise interest rates due to this stock market sell off. So interest rates will stay near 0%, and that makes the USD a crappy investment. You get nearly 0% growth and in the US we have almost 2% inflation year to year. So if you were invested in USD, you are guaranteed to lose money every year.

Right, but also have to consider the USD relative to other currencies. For example the oil price is killing some currencies right now relative to USD (Ruble ). So it may be a crappy investment (0% rates), but would you trade your USD for something else right now?

Post: #13

(08-24-2015 10:33 AM)presidentcarter Wrote:  Right, but also have to consider the USD relative to other currencies. For example the oil price is killing some currencies right now relative to USD (Ruble ). So it may be a crappy investment (0% rates), but would you trade your USD for something else right now?

It may not look pretty, but it is the best looking horse of the bunch right now... and has been for a long time. One day it will no longer be the case.

Post: #14

(08-24-2015 10:33 AM)presidentcarter Wrote:  

(08-24-2015 10:23 AM)It_is_my_time Wrote:  

(08-24-2015 10:22 AM)Jaydublin Wrote:  I am interested in how the dollar has been falling along with the stock market. Normally we see the opposite.

The Fed most likely will not raise interest rates due to this stock market sell off. So interest rates will stay near 0%, and that makes the USD a crappy investment. You get nearly 0% growth and in the US we have almost 2% inflation year to year. So if you were invested in USD, you are guaranteed to lose money every year.

Right, but also have to consider the USD relative to other currencies. For example the oil price is killing some currencies right now relative to USD (Ruble ). So it may be a crappy investment (0% rates), but would you trade your USD for something else right now?

Personally I am diversified in different investment opportunities. Part real estate, part land, part stock market, part USD.

I was just explaining why the USD was not sky rocketing off the back of a weak stock market.

The question is, where are these people putting their money if not stocks and not USD. I have no idea what they are doing. But with a sell off like this, a lot of wealth is being wiped away.

Post: #15

Post: #16

You have to look at the monthly chart to make sense of it. On the monthly chart, the last touch of the 20 month moving average was June 2012. That is 38 months above the moving average. The market is simply too overbought and due for a 10% correction. It is a natural market mechanism but the news media always assumes that it must be due to news and they just make something up. When you have a hammer, every problem is a nail.

Post: #17

If you all had been reading who I tell you all to, you would have known this was going to happen back in early Spring.

Current analysis:

http://www.armstrongeconomics.com/archives/36410

Post: #18

Good. I want to get back into US equities. US looks good from where I sit north of the border.

Post: #19

(08-24-2015 10:16 AM)rudebwoy Wrote:  The Sky is falling!

So do you have anything useful to contribute to this discussion or are you just going to engage in snark and mockery like a know-nothing SJW who fancies himself above it all?

Post: #20

It dropped 500+ on Friday, this is just a continuity of Fridays down spiral correct ?

Is this because of China's market values ? and how exactly would one value this as a correction ?

Was the value of our market based on banks being propped up and inflation ? Is this basically a reality check of what are markets are actually worth ?

Layman's terms would be greatly appreciated, I have only beginners knowledge of terms and economics.

Post: #21

"The stock market is the only place where things go on sale and all the customers run out of the store."

Post: #22

BTW

it's common financial 'knowledge' that a young person should invest more heavily in risky stocks compared to an older person.

I always felt this theory was bullshit, because the last couple weeks have shown you can get wiped out for your stupid theory.

The common response is 'but you have time to recover since you're young! so buy more stocks!'

but the loss was completely avoidable in the first place. It's not necessary to take risks just because a fucking financial theory book tells you to at your age. Anyone person with an aggressive 401k would have their shit wiped out this past week. All that work, time, and money just disappears into thin air.

Post: #23

The Dow was down more than 1000 points this morning. It's at -114 as of posting. The people who really lost their asses are the ones who panicked and sold because of a fluctuation in 1 part of 1 day. Whoever was the buyer in those morning trades already got a profit.

Post: #24

(08-24-2015 11:37 AM)Bear Hands Wrote:  The Dow was down more than 1000 points this morning. It's at -114 as of posting. The people who really lost their asses are the ones who panicked and sold because of a fluctuation in 1 part of 1 day. Whoever was the buyer in those morning trades already got a profit.

Damn. I should have bought something earlier this morning. Oh well, you can't really time the market anyways.

Post: #25

(08-24-2015 11:24 AM)Disco_Volante Wrote:  BTW

it's common financial 'knowledge' that a young person should invest more heavily in risky stocks compared to an older person.

I always felt this theory was bullshit, because the last couple weeks have shown you can get wiped out for your stupid theory.

The common response is 'but you have time to recover since you're young! so buy more stocks!'

but the loss was completely avoidable in the first place. It's not necessary to take risks just because a fucking financial theory book tells you to at your age. Anyone person with an aggressive 401k would have their shit wiped out this past week. All that work, time, and money just disappears into thin air.

High-risk, high-return. You can avoid losing a lot of money by only making low-risk investments, but you also avoid making a lot of money (at least from your investments). That's why people invest in high-risk instruments.

Also, "wiped out" is a huge exaggeration. That's only the case if they've only been investing for the past few months. The market is still higher than it was a year ago, and much higher than it was three years ago: http://money.usnews.com/funds/mutual-fun...fund/vigrx

Don't get me wrong, the U.S. economy is structurally unsound and once the dollar inevitably implodes the Fed will have to raise rates which will pop the credit-fueled bubbles in stocks, housing, etc and cause an economic crisis worse than the last one. This is just a minor correction though.