OT: Recession in the works

[2300 Nueces]

Quick heads up. Recession is in the works. It will be here in the near future. It has nothing to do with the economic conditions within the US but the supply of dollars in the world economy.

We have a liquidity problem.

1. Fed is selling the multitude of bonds it acquired in 2008 and beyond, so it's buying dollars.

2. The treasury is building a surplus of dollars so that it can have sufficient funds for 2019 tax cuts. Good in the long run, will create a shortage in dollars short term.

Emerging markets are taking a beating because they lack dollars to settle transactions as they do not trust each other enough to settle in their own currencies. Global speculators are pulling out as we speak.

Takeaway: Don't be holding stocks or bonds.... dollars are your huckleberry. If you are holding inventory at high prices, get rid of it and re-stock after Christmas. We could see a 50% correction in stocks. The top is in, fyi.

 

[clob94]

Quick heads up. Recession is in the works. It will be here in the near future. It has nothing to do with the economic conditions within the US but the supply of dollars in the world economy.

We have a liquidity problem.

1. Fed is selling the multitude of bonds it acquired in 2008 and beyond, so it's buying dollars.

2. The treasury is building a surplus of dollars so that it can have sufficient funds for 2019 tax cuts. Good in the long run, will create a shortage in dollars short term.

Emerging markets are taking a beating because they lack dollars to settle transactions as they do not trust each other enough to settle in their own currencies. Global speculators are pulling out as we speak.

Takeaway: Don't be holding stocks or bonds.... dollars are your huckleberry. If you are holding inventory at high prices, get rid of it and re-stock after Christmas. We could see a 50% correction in stocks. The top is in, fyi.

Hold your horses..... we are still 30-60 days from true road signs. Don't jump the gun.

 

[2300 Nueces]

Hold your horses..... we are still 30-60 days from true road signs. Don't jump the gun.

While the US bond curve is still good, the global bond curve has inverted. The US is not the problem, it's the rest of the world. The nasdaq is at new highs but everything else is lagging the late Jan high except small caps and tech. We should have broken those highs by now. We are rolling over again. We won't break those highs of late January on SnP and DJIA. Watch the 200 day simple moving average.

 

[westx]

What is the prevailing strategy? Crypto, precious metals, both, neither? Sidelines?

 

[2300 Nueces]

What is the prevailing strategy? Crypto, precious metals, both, neither? Sidelines?

Well, think back to 2008. Did you own equities then? In sharp corrections, cash is preferred but who am I to say. Everyone is different.

 

[diadevic]

Good information. I watch/listen a zillion radio/tvshows, and have heard others say similar things. We are expecting 4% GDP this quarter, last quarter had stellar earnings, but market is going sideways. Sell in May then go away!

 

[FlourBluffHorn]

Hook'em

 

[andrew86e]

I remember reading talk of an inverted yield sign coming towards the end of 2018, and that was a couple of months ago.

 

[oldschoolcat]

Mr. Soros, is that you?

 

[oldhorn2]

any more, I think analysts seem to tell you how good something is gonna be so you will buy it while their clients sell and visa versa. I dont believe a one of them. To me they are just like weathermen. Every one of them can tell you why what happened yesterday went that way, but not a damned one of themcan tell you what is going to heppen tomorrow with any accuracy at all.

Makes me think of the old Amos & Andy routine where Amos wanted Kingfish arrested for being a broker. The cop said nothing wrong with being a broker and Amos said..." but I is the brokee!"

 

[diadevic]

Nueces - is it happening now? Tough day in the market.

 

[clob94]

Nueces - is it happening now? Tough day in the market.

Recessions don't happen like that. Silly goose.

 

[2300 Nueces]

Nueces - is it happening now? Tough day in the market.

We are in the latter stage of the insiders selling their holdings, hence the sideways price action. Typically a pattern does appear. What we have seen is a symmetrical triangle/wedge that broke to topside as a fakeout but it has proceeded lower. I personally don't like the technical analysis stuff with all the shapes as they make for poor material to act on but they are good viewing after the fact. What is more important is a tried and true liquidity predictor like the spot price of wtic backdated 10 years which shows the maturing value of the instruments held by the government and fed and their re-investment participation. I can post some info on this if anyone is interested, otherwise no big deal.

Edit: Looks like the Dow is making the all encompassing "Death Cross" but there have been a lot of other markets precede the Dow as to date. The s&p is still above it's 200 day sma and so are the Fangs but it's going to be a lean Christmas. A Big 12 Title is all that I want this year. You still have time to get out and escape selling at the bottom.

Hookem

 

[2300 Nueces]

Recessions don't happen like that. Silly goose.

Mrs. Mkt price action typically precedes econ by about 6 mos..

 

[clob94]

Mrs. Mkt price action typically precedes econ by about 6 mos..

Once the tariff poker game winds down, things will start a crawl back upwards.

 

[diadevic]

Recessions don't happen like that. Silly goose.

No kidding. But the market is usually a precursor to bad news. I've got a pretty big position (at least for me) in JPM a couple of weeks ago, and have watched it drop from 112 to 104 today. I have no idea who 2300 Nueces is, but since he stuck his neck out I've lost a sizeable chunk. Maybe luck, maybe I jumped into the wrong stock at the wrong time. Either way, his commentary just got my attention.

Your point on the tariffs being a "poker game" - I hope it is resolved sooner rather than later. I've done a small amount of research, and it is amazing what we (US) have to put up with in international trade. But the market obviously doesn't like it.

 

[2300 Nueces]

No kidding. But the market is usually a precursor to bad news. I've got a pretty big position (at least for me) in JPM a couple of weeks ago, and have watched it drop from 112 to 104 today. I have no idea who 2300 Nueces is, but since he stuck his neck out I've lost a sizeable chunk. Maybe luck, maybe I jumped into the wrong stock at the wrong time. Either way, his commentary just got my attention.

Your point on the tariffs being a "poker game" - I hope it is resolved sooner rather than later. I've done a small amount of research, and it is amazing what we (US) have to put up with in international trade. But the market obviously doesn't like it.

I usually don't do this but I went and took a peak at your stock. IMO, the 1 year candle stick chart is extremely bearish. What is your reason for optimism in JPM? Are you using leverage? If so, you better have a stop loss. That chart is standing at the edge of the Abyss.

 

[diadevic]

I usually don't do this but I went and took a peak at your stock. IMO, the 1 year candle stick chart is extremely bearish. What is your reason for optimism in JPM? Are you using leverage? If so, you better have a stop loss. That chart is standing at the edge of the Abyss.

Tax cuts, strong economy, strongest of the big banks, purchases by insiders, rising interest rates. Unfortunately, I timed it right as they guided down on revenue at end of last week. Not leveraged. Trying to figure out if its time to double down. Nice to get an outsiders slap in the face to remind that it doesn't always rebound/go up.

 

[2300 Nueces]

Tax cuts, strong economy, strongest of the big banks, purchases by insiders, rising interest rates. Unfortunately, I timed it right as they guided down on revenue at end of last week. Not leveraged. Trying to figure out if its time to double down. Nice to get an outsiders slap in the face to remind that it doesn't always rebound/go up.

I am not going to tell you what to do but there are some things that will help you.

1. Don't chase losing trades with more $$$.
2. Before you enter a trade, determine where you will exit. Where is maximum pain? Set a stop loss at this point.
3. How do you lock in gains?
4. Where would you exit if you were in profit?

For JPM, determine your max pain and set your stop loss. If it goes up, decide when enough profit is enough but be prepared to walk away if either occurs.

 

[BringBackRoyal]

Tax cuts, strong economy, strongest of the big banks, purchases by insiders, rising interest rates. Unfortunately, I timed it right as they guided down on revenue at end of last week. Not leveraged. Trying to figure out if its time to double down. Nice to get an outsiders slap in the face to remind that it doesn't always rebound/go up.

Just my completely unsolicited opinion, but unless you're just doing this as a hobby with some of your money and not your entire retirement savings (or you have many millions and nothing to worry about), I'd consider parking that money in one or more index and/or highly-rated mutual funds and keeping your hands off of it. The overwhelming majority of non-professionals get utterly murdered in this market-timing, short-term trading game (and help generate profit for the true experts in the process).

 

[diadevic]

Just my completely unsolicited opinion, but unless you're just doing this as a hobby with some of your money and not your entire retirement savings (or you have many millions and nothing to worry about), I'd consider parking that money in one or more index and/or highly-rated mutual funds and keeping your hands off of it. The overwhelming majority of non-professionals get utterly murdered in this market-timing, short-term trading game (and help generate profit for the true experts in the process).

When the great State of Texas finally allows sports books, I will take that advice. Until then --- this is the only legal way to get my fix!

 

[2300 Nueces]

Ok, who didn't heed the warning? Anyone still holding long with maxed margin debt?

Might break out the Elvis, "Blue Christmas". It's going to be a rough one for the market and retail.

 

[diadevic]

Ok, who didn't heed the warning? Anyone still holding long with maxed margin debt?

Might break out the Elvis, "Blue Christmas". It's going to be a rough one for the market and retail.

How low can it go?

 

[oldschoolcat]

Ok, who didn't heed the warning? Anyone still holding long with maxed margin debt?

Might break out the Elvis, "Blue Christmas". It's going to be a rough one for the market and retail.

Is this a prediction, or a wish? Clob?

 

[clob94]

Is this a prediction, or a wish? Clob?

Oil prices are coming down for two reasons. One, the dollar is gaining value against other currency. When you have your currency as the back up to "global currency" this sort of thing is part of the deal. You take the good with the bad.

2nd, the saudi's are feeling a bit threatened right now and are flexing their muscles. In speaking Monday with two of the Petroleum Ministers from OPEC nations, Saudi is threatening to seriously ramp up production to keep the wolves at bay...... partly over this dead journalist that they see as an internal house cleaning matter, and partly as an act of aggression toward Iran who tried to muscle in and steal away some of the Saudi production % when they came off the sanctions list. The saudi's must have high oil prices in order to maintain their grip on the population because all suadi citizens get subsidy checks from oil production. Cut those off, and you'll have a revolt. The Saudi banks will, yet again, be shorting oil and capitalizing, on rumors of increased production, and wall street will scramble to keep pace, thus artificially driving down the price of oil. Once the Saudi banks have met their year end goals, the saudi's will back off the increased production talk and oil will start rising again.

It's a dirty fvcking tactic and one we can't stop or control UNLESS we go energy independent.

We all knew the market was headed for a correction, we hoped it wouldn't happen all at once, but instead in phases. Thankfully, the economy is still strong and jobs are still being added. So far, I'm not terribly worried.

 

[oldschoolcat]

How about now?

 

[LonghornMM]

I pulled out of the market today (401k mutual funds) and put that money into a money market fund until this correction is over.

 

[oldschoolcat]

I pulled out of the market today (401k mutual funds) and put that money into a money market fund until this correction is over.

Not sure if that was the right thing to do.

But so did I.....all of it.

 

[diadevic]

Not sure if that was the right thing to do.

But so did I.....all of it.

Well I didn't. And it HURTS!

 

[westx]

Takeaway: Don't be holding stocks or bonds.... dollars are your huckleberry. If you are holding inventory at high prices, get rid of it and re-stock after Christmas. We could see a 50% correction in stocks. The top is in, fyi.

Nailed it. Except for the re-stock part. No more QE since 2016 to prop it up.

 

[2300 Nueces]

I was incorrect. It looks like we won't make it quite to recession(bear mkt s&p). The bottom is probably going to be in within the next 2-3 weeks. I look at the supply of $$ in the econ.. I did not take into account the cash brought in from Trump's tax plan which allowed corps. to bring back off shored profits. The corp buybacks have really buoyed the market compared to what the selloff could have been. Business has been slow but the market has fared well. Anyway, bottom in soon. Fed will prolly not hike on Wednesday.

Why? 3 things:

1. Fed has been selling all kinds of bonds into the decline which dries up liquidity. This will continue.
2. Treasury has been holding funds for tax cut in spring.
3. Fed has been hiking fed funds rate. This will prolly end Wed..

Corp buybacks, rate hike termination with money flowing back into econ through tax cuts will move market higher into late winter to spring and summer. It's going to be slow tho.. It will be enough to create a floor.

 

[westx]

I was incorrect. It looks like we won't make it quite to recession. The bottom is probably going to be in within the next 2-3 weeks. I look at the supply of $$ in the econ.. I did not take into account the cash brought in from Trump's tax plan which allowed corps. to bring back off shored profits. Anyway, bottom in soon. Fed will prolly not hike on Wednesday.

I was thinking it would be a longer decline. But, you are definitley more in tune with it. I plan to remain on the sidelines for a while.

 

[LonghornMM]

I was thinking it would be a longer decline. But, you are definitley more in tune with it. I plan to remain on the sidelines for a while.

Yes. By putting your money into the money market, you won't have any gains, but at least you won't go backwards and lose money during a bear market, which is what is happening now.

 

[clob94]

We have the lowest unemployment rate in our lifetimes. There are currently 7 million jobs that need filled.

Apple, google and facebook are each building MASSIVE new servor facilities and campuses across the nation.

This dip has nothing to do with the economy. It has to do with elections.

 

[LonghornMM]

We have the lowest unemployment rate in our lifetimes. There are currently 7 million jobs that need filled.

Apple, google and facebook are each building MASSIVE new servor facilities and campuses across the nation.

This dip has nothing to do with the economy. It has to do with elections.

clob, please elaborate...