09-23-2022, 12:48 PM | #7217 |
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Simple answer here: It's complicated and is going to take time.
There is no quick fix. This whole situation is related to COVID and the government reaction (I'm talking most governments in the world) to the situation. Yes, they overreacted, but you really can't blame them as they had never had to deal with a situation like COVID in present time and there was so much fear going around. They had to prop up the economy to keep the world out of an economic collapse. The issue is they helped too much and let it go on too long. Investors, private equity, etc. got greedy and got rich. Workers started having a different view of work, work ethic, and some got greedy and wanted to be compensated for seemingly basic jobs. Everyone had money and were spending it like crazy because they were bored sitting around all day because of COVID. Many were getting paid to do nothing. The stock market became WAY OVERVALUED. Then there came the chip shortage, supply chain issues, etc. that we're still dealing with that to some extent. Property and auto dealers got super greedy and buyers paid way too much for homes, cars, etc. because they had the money and were impatient. Inflation sky rocketed as a result of all of the above. The market hardly budged at first with all this inflation and in many cases, market value continued to increase (WTF?). The thought was people had jobs so everything was fine. That's so far from the truth. And so, here we are. We never learn. - The market is going to tumble for while, probably well in the 1st quarter of 2023. - A lot, and I mean a lot, of people, will lose their jobs. All sectors will be hit. - Home and car values will plummet because of interest rates, lost jobs, and the suckers that overpaid. - There will be lots of home and auto loan defaults. - Wages will go down. Gone are the days of making $17/hr making burritos or coffee orders at Chipotle and Starbucks. It's not sustainable and people aren't going to continue pay excessively high prices for fast food because they no longer can afford it.
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09-23-2022, 01:54 PM | #7218 | |
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As others have called it, the last 20 years of economic policy has created "The Everything Bubble". As to whether wages will decline as a deflationary act - it's possible, but not likely. The workforce is shrinking, we're hitting peak-Boomer-retirement which will last for a solid 10 years, and data is showing that the youngins' ain't as productive. Add in an accelerating re-shoring of labor and outside of a major catastrophe, I don't see mass unemployment occurring. Even if unemployment doubled from where it is today, we'd still be short people to work the open positions still available in the economy. All that said, I see interest rates staying elevated for quite some time. It's going to take 6-12 months before major holders of debt need to roll over their existing holdings...at significantly higher rates of interest. It's very possible that the major pain gets exposed at that point in time. In short: if you've got cash, you'll be fine. If you're carrying significant debt, it's going to be painful. It's going to be weird the next 3-5 years. |
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09-23-2022, 02:20 PM | #7219 |
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What do you mean you 'see it all the time?' Do you work for a car dealer?
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09-23-2022, 02:37 PM | #7220 |
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not a financial advise, just my opinion. market is making a comeback on the last hour of the friday's trading.
i think today is the shake-out-the-weak day. all the mega caps companies (goog, msft, for example) with the strong balance sheet and cash are at 52 weeks low. goog never gone lower than 33%, only have that 3 times for the last 15 years. even the covid drop (34% drop) was not as worst as this drop for the past 12 years. msft same too. for the past 12 years, only covid drop (30% drop) is close to this drop. 2010 only 28% drop. nvda at lowest qcom almost at lowest spy and nasdaq almost at june lowest fed is already announce 75 points, there will be no other catalyst from now until at least the next CPI in the next 2-3 weeks from now. so my thinking is that today is the lowest, then we will go short term bull until the next CPI or the early season of the earnings due early October. If earnings are good and CPI are good showing inflation is going down, we are going more upward. but if earnings are bad and CPI also bad, then we will go lower again than June. i would say buy today or buy monday if reversal happens monday. it's a bloody friday for sure. but next 2-3 weeks will be bull. next week probably consolidation as market accumulates share. Last edited by dangerus_car; 09-23-2022 at 02:45 PM.. |
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09-23-2022, 04:10 PM | #7221 | |
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09-23-2022, 06:21 PM | #7222 |
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Not to throw water on your party, but next week (last week of September) is historically the worst week of the year for stocks, and October is the worst month of the year. If you're buying triple Q's you've got bigger stones than me.
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09-23-2022, 09:39 PM | #7224 | ||
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09-23-2022, 10:29 PM | #7225 |
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not a financial advise, just my opinion
on monday, two things can happen (see friday's last hour trading) 1. it will rally and if it is, it shows that it hits a higher low since it's a bit higher than june low 2. if monday goes lower, it will go lower just a little bit below (0.5% max below the lowest june low) the june low for SPY and QQQ, again, to shake-out-the-weak as you can see on today's trading, it reaches low, then went back up pretty strong. once it hits that low below June low, it will go back up strong, it can happen either after few hours in early trading pre lunch (probably pre market sunday and monday market will go lower than june low, to shake those out), then start trading monday, all sells after stop losses, or slowly going down, then go back up after 1 PM EDT. as i m pretty sure, many stop losses are around that area, market makers are going to feast on that stop losses, that is if you are playing QQQ and SPY. if you are playing stock, i don't think it will go lower than fridays low, especially for mega cap. just check on thursday. when SPY and QQQ went red, MSFT, GOOG, AAPL were actually green, very strong, it just went red friday due to SPY and QQQ pressure that was too strong. if early monday is sell, mega caps will not go lower than friday low. then the rest of the last september week will be a consolidation week as Market Makers will start its accumulation phase, then early first week october is mark up week, 2nd October week is distribution week, then come the CPI report. CPI will make it either a stair case going up again, or will go down big red to erase all the first week mark up gain. that's my assessment, play-by-play for the next 3 weeks Last edited by dangerus_car; 09-23-2022 at 10:38 PM.. |
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09-23-2022, 10:37 PM | #7226 |
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09-23-2022, 10:42 PM | #7227 | |
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09-23-2022, 10:58 PM | #7228 | |
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AAPL held up strong because of iPhone 14 sales report. if iPhone 14 report is weak, it would have gone at low $140s or even high $130s. but that analyst reports make it held up well at $150. you will see monday. |
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09-24-2022, 09:34 AM | #7229 |
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Dear protectors of young naïve investors,
My deepest apologies but I am going to post something from wall street bets reddit Because it is an interesting take from a seasoned economist I recommend sitting down with a glass of water before you click this link Good luck https://www.reddit.com/r/wallstreetb...tm_name=iossmf |
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09-24-2022, 10:02 AM | #7230 | |
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I hope you're right though. What made me stronger was early 2020 when everything was going down 4% everyday for what seemed like 3 months. Now we can handle anything! |
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09-24-2022, 10:19 AM | #7231 | |
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The next key catalyst is next month cpi on October 13. If this report shows inflation is still hot, then we will go lower than june. If cpi cause it down, at that point, the rsi won’t be oversold I do believe that fed was wrong to raise 75 points. Cpi report lags since it shows price at a month ago while market always look ahead in the future. He should have raise 50 points. Gold. Lumber. Gas, are all down. |
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09-24-2022, 10:53 AM | #7232 | |
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He was certainly right that inflation has started to drop and I share his concern about the Fed going too far. But we've seen little evidence, so far, of a broad softening in the economy overall. Inflation is still high and isn't going back to anywhere near 2% for at least 18 months. Unemployment hasn't gone up. Housing prices may have started to fall, but they need to go down about 10% and we're nowhere near that. Most importantly, the earnings adjustments that must come have not for the most part. Add to the the counter-weight of the IRA and other stimulative policies enacted by the administration in the last two years, and it certainly looks like the economy still has plenty of momentum. Maybe the Fed doesn't need to go to 4.5-5%. Maybe even the threat of doing so will break something, either here or abroad, that will force the Fed to pivot; it's happened before, remember the Peso collapsing and Orange County's bankruptcy, for instance. But until that happens I don't see a change in course. Which will continue to be bad for the markets. Don't fight the Fed. References Arthur Burns - Arthur F. Burns William Miller - G. William Miller |
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09-24-2022, 11:02 AM | #7233 | ||
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09-24-2022, 11:20 AM | #7234 | |
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I’ve made over $20k last year short term swinging TQQQ and SQQQ. It’s very risky, but only time you need to worry about decay when markets stay flat. In this volatile inviroment….triple leverage is great IF you know how to swing it properly. |
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09-24-2022, 11:31 AM | #7235 | |
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09-24-2022, 11:51 AM | #7236 | ||
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09-24-2022, 12:12 PM | #7237 |
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09-25-2022, 09:39 AM | #7238 |
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It's not just commodities we need to worry about. Those are leading indicators of inflation.
Inflation has moved from commodities into services. This is why inflation is so damned pernicious: it moves from one asset class and section of the economy into another. With re-shoring of manufacturing, mass retirement of boomers, a decline in overall worker productivity, the increase in energy costs due to policy, etc., we can expect inflation to stay elevated for quite some time. Barring sudden, extreme demand destruction across all asset classes, we ain't out of this yet. People still have a ton of capital to play with and clearly, based on service statistics, they're still spending. |
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