Posted on 03/09/2020 5:53:24 PM PDT by willk
Stock prices briefly dropped during premarket trading Monday evening. The after-hours dip followed a massive sell-off Monday prompted by coronavirus fears and an oil price war, which raised questions about whether a recession could be imminent.
However, stock prices began to recover and entered positive territory after President Donald Trump discussed some possible recovery mechanisms at a White House briefing Monday evening.
(Excerpt) Read more at cnn.com ...
In the long run, we are all dead.
It is a matter of risk acceptance. But it may also trigger bigger questions of valuations in general. Why was the market so hot to begin with? Generally speaking I’d say it was because of high growth expectations. Now the question is how much we should temper those expectations, if at all... and time frames.
It is interesting the way POTUS Trump can move the markets. Just a few months ago he crashed the tech sector by slapping tariffs on China almost whimsically. I am not saying he was wrong, he felt they were negotiating in bad faith and needed a strong response. Now the news is reporting the futures are up because of his comments today. Similarly what was it 1-2 weeks ago, the market fell 1200 one day then rebounded 1200 the next day. It’s just a little unusual.
To me it signals “frothiness” and a correction was probably overdue. It can firm up and rally from here, no doubt about it.
A stock I have been curious about is BHC. I may take a stake in it. It had a different ticker a year or two ago, when that hedge fund guy Ackerman helped finance them to roll up a bunch of mid size drug firms. He took a massive loss - billions and billions (He also took a bath shorting Herbalife, and Carl Icahn went against him on that one).
They are overloaded with debt. But now they can reprice their debt at much better rates. And it is trading near its 52 week low (and 90% off its all time high, which was too high imho). I am curious if the change in rates will be a benefit to them.
No - this is what happens when the FED tells the banks: "Beginning with today's operation and through March 12, 2020, the Desk will increase the amount offered in daily overnight repo operations from at least $100 billion to at least $150 billion. In addition, the Desk will increase the amount offered in the two-week term repo operations on Tuesday, March 10, 2020 and Thursday, March 12, 2020 from at least $20 billion to at least $45 billion."
But - it's funny that everyone thinks the market is going up because people are piling in because they see a bargain and the crisis is over - and it has nothing to do with the FED printing funny money to the tune of 1/2 trillion dollars and pumping it up.
So - ask yourself a serious question: Without ANY injection of liquidity from the FED (and the above statement) - what do you think the futures would be doing right now?
The drop wasn’t really about the virus or oil price. Two things were a driver: power structure uncertainty in Saudi Arabia and key people pull their money out of stocks and into physical monitory assets that can disapear if necessary.
Yeah - I bought some leaps on some really really cheap stuff - including energy. Two reasons: We bounced off two major support levels - the 200 weekly moving average and the 50 monthly moving average (which coincidently are what turned the Dec 2018 plunge around) and also the FED was sure to bring in some helicopter money - which of course they have announced they are going to. I've made about 21% on my portfolio since the 24th (took a little hit from the 20th to then) and did very well today and decided to take a piece of it and roll the dice.
So - I am 5% in leaps and about 95% cash. I will sit and wait until this week plays out. I figure this week will determine if those support levels are real. They are the Maginot line. If they hold - we are good and I will go for it (with stop losses of course). If not - I will put some puts back on. The only put I have on right now is on the VIX.
If the market can go up 1000 points tomorrow, it will stop some of the margin calls.
My thought exactly, puts are a must for insurance.
Good luck, I mean that sincerely. I would personally probably avoid energy, but overall some LEAPS could pay off handsomely.
One must hedge. I usually take a straddle/strangle approach - except this time when I am all bull for this week due to this $700 billion+ in stimulus they are injecting. The average investor will look at it and think we’ve turned the corner...” yeah team!”. They don’t realize the FED has just printed their grandkids’ future and put it into the markets. Probably won’t even make most of the business shows.
Appreciate it. It was XOP. I got in when it was 9.40’s and oil was around $31. If it tanks back to around $28 - I’ll add. I assume someone will shoot something at someone between now and then...lol.
Hey people are panic selling and shiat over the media overblowing this into “we are all going to die right now, you need to buy 600 rolls of toilet paper and sell all your stocks, and vote sleepy old Biden!!!!!”
So yea, the fed is propping it up some
You mad? Shorts on fire?
Yeah, after I posted I thought... “well maybe they will start shooting at each other over there” LOL.
Governor vetoes infrastructure bill as oil prices plummet (New Mexico)
“Nibble a little..”
Yeah, that’s what I kind of meant.
Buy on the way down, not all in on one day.
As this COVID-19 winds down, watch a massive buying spree.
The demoncRats are salivating in anticipate of November 3rd,
right now.
I think dry mouth will be here within 90 days.
Not so sure it’s panic selling with interst rates as are. A lot are selling to re-invest....enlarge company...buy real estate etc. Further if you want to create a buy blast create panic first.
Not so sure it’s panic selling with interst rates as are. A lot are selling to re-invest....enlarge company...buy real estate etc. Further if you want to create a buy blast create panic first.
One thing I learned long ago...is I don't pay attention to futures...
I use stops...Keeps me from forming opinions...on what MIGHT happen.
I'd rather...let the "M" play out.
Seems to work for me....
Market sell off = catastrophic lack of leadership in the White House
Market rubbing on 30k = not a real indicator of economy because it only benefits rich white guys.
I know because I watched MSNBC a couple times.
Good point
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