I'm just hearing the same-old, same-old. China, jobs, Fed dithering, yada, yada....
What do our HROT gurus know?
What do our HROT gurus know?
OK, Why Is the Market Going Down Today?
- Thread starter What Would Jesus Do?
- Start date
I know not to try and judge the market by the movement of a single day.
China slowdown. Which is leading to further commodity meltdown which is putting substantial pressure on other Emerging economies.
Plus I believe that the market is worried now that the Fed will not be able to raise rates in Sept due to slowing economy and risks of deflation.
Plus I believe that the market is worried now that the Fed will not be able to raise rates in Sept due to slowing economy and risks of deflation.
Funny how a year ago any mention of tightening by the Fed and the market would freak out and tank. Now it's worried that the Fed won't tighten.
I guess everybody has changed their bets.
Damn that Al Gore and his Al Gorithms.
I do find it interesting, if not frightening, that hardly any trades these days are made by actual humans. It really makes you wonder what exactly the stock market is based on anymore?
I would humbly suggest that it is a bit more about the length of time that the ZIRP has been in place and the understanding that the financial industry has little prospect to grow now that the majority of the regulatory upheaval is in the rearview mirror. The Fed isnt raising rates to slow an economy that may be overheating. Instead they are doing it to allow for banks to manuever and possibly increase available credit.
Concerns now seem to be very pointed to the US economy slowing or at very best staying stable. The S&P is still essentially flat on the year and this is the fifth year of expansion in this cycle. I think people may lose sight of that sometimes.
Debt, skidding oil prices, over inflated stock values, and greed are the causes of the weekly market drops.
China just experienced a 1929 type market crash.
Only a fool wouldn't think it's going to happen here next.
China just experienced a 1929 type market crash.
Only a fool wouldn't think it's going to happen here next.
The market is going to continue to drop and drop with an occasional bump but by the end of the year it will surely be down.
None of you answered correctly yet. It is an emerging markets currency issue. Kazakhstan devalued by 23% today. Vietnam devalued by a couple percent in the last few days. Nigeria's peg is likely the next to go.
Never mind the already-floating EM currencies are falling rapidly too (RUB, MXN, BRL, TRY, etc)
When people or companies borrow using dollars in these markets, they quickly find they cannot re-pay the debt. It is the start of a credit crunch, I believe. Greece and Puerto Rico were the first dominoes to fall, and more are coming.
Note as well that USD strength further depresses commodity prices, but we also know there simply isn't demand for copper, nickel, zinc, etc.
Never mind the already-floating EM currencies are falling rapidly too (RUB, MXN, BRL, TRY, etc)
When people or companies borrow using dollars in these markets, they quickly find they cannot re-pay the debt. It is the start of a credit crunch, I believe. Greece and Puerto Rico were the first dominoes to fall, and more are coming.
Note as well that USD strength further depresses commodity prices, but we also know there simply isn't demand for copper, nickel, zinc, etc.
More arguments for a transaction tax and some mandatory inter-trade delays.
I wonder what would happen if you offered a market with modest between-trade delays and markets without. Would one or the other simply languish? Would I be wrong in thinking it would be the one that allowed high-speed machine trading that would survive? Or would it make no difference?
So what if you then introduced a transaction tax at an extremely low percentage, and then slowly raised it. I wonder where that tax would wind up when the 2 markets were giving equal value to the high-speed trader? Or, again, would it make no difference?
My problem with letting algorithms dictate the stock market is that someone has to write them. They have to enter a set number of parameters, but what if those parameters get it wrong? What if something pops up that the algorithms aren't designed to deal with?
It's gambling. But unlike the ordinary sorts of gambling, if they screw up at the levels they gamble, they can bankrupt more than just themselves.
They aren't producing anything. No new products or useful services. It's just gambling.
I'm not saying people shouldn't be allowed to gamble, but when it endangers others, shouldn't we have better controls?
I freely admit that I'm out of my depths with this next question, but isn't the stock market based on a house of cards? Half the country is invested in the stock market. Surely, most have no idea what they are doing. They are just blindly pumping billions of dollars into it everyday. It sounds an awful lot like quantitative easing to me.
If the algorithms fail, there will be plenty of people (REAL PEOPLE) that step in to clean up the mis-priced securities.
Also, many traders representing institutional money managers use "algorithms" to execute their trades. These algorithms are designed in many different ways, but in general they offer a way to participate in the days' trading at a certain percentage of volume and either become more or less aggressive depending on price. A lot of newer algos are also designed to mask the order size as a way to defend against HFTs that you're all worrying about.
Also, many traders representing institutional money managers use "algorithms" to execute their trades. These algorithms are designed in many different ways, but in general they offer a way to participate in the days' trading at a certain percentage of volume and either become more or less aggressive depending on price. A lot of newer algos are also designed to mask the order size as a way to defend against HFTs that you're all worrying about.
Maybe one of you smart boys can explain this to us. Are you convinced?
http://www.marketwatch.com/story/a-dow-theory-sell-signal-is-upon-us-2015-08-20?siteid=yhoof2
The venerable Dow Theory—the oldest stock market timing system that remains in widespread use today—is poised to generate a sell signal at today’s close.
The Dow Theory was introduced gradually over the first three decades of the 20th century in editorials in The Wall Street Journal by its then editor, William Peter Hamilton. The three preconditions for a sell signal that he set out are:
http://www.marketwatch.com/story/a-dow-theory-sell-signal-is-upon-us-2015-08-20?siteid=yhoof2
The venerable Dow Theory—the oldest stock market timing system that remains in widespread use today—is poised to generate a sell signal at today’s close.
The Dow Theory was introduced gradually over the first three decades of the 20th century in editorials in The Wall Street Journal by its then editor, William Peter Hamilton. The three preconditions for a sell signal that he set out are:
- Both the Dow Jones Industrial Average and the Dow Jones Transportation Average must undergo a significant correction from joint new highs.
- In their subsequent significant rally attempt following that correction, either one or both of these Dow averages must fail to rise above their pre-correction highs.
- Both averages must then drop below their respective correction lows
It is not a house of cards. Valuations can be high or low and are subject to the mood of the crowd, other investment options, etc... and normal inputs people use to value companies are always fluctuating - interest rates, currencies, commodity inputs, etc.
When you buy stocks, you are buying ownership in a company. Think of somebody that has a good restaurant or a good private business. If they asked you to buy 1% of it, how would you determine what that should cost? Well, the stock market is just a way for millions of people to buy and sell fractional equity ownership in a company. Nobody ever knows for sure what any company is worth, after all - it is subject to each individual's risk tolerance, preferences, and assumptions about the future.
But I know this - truly "rich" people own businesses. Unless you want to shoulder all of the work and risk it all on one business, why not buy stocks that can diversify you into many businesses AND allow you liquidity should you want to sell them today, tomorrow, or some undetermined time in the future?
Sounds more like Tulip Mania.
There is underlying value, of course. But more money drives up stock prices even when the underlying value doesn't justify it. At some point, investors (aka gamblers) will shift to something else - bonds, commodities, bullion, whatever - but if they are bid up, too, then what?
When Ford (and others) got slammed over a few months in 2008-9, it was still probably producing a lot of cars per day, still owned the same factories, and so on. It was physically little changed. Yet its shares were worth 80% less. Different measures of value that have somehow become estranged.
Yield Curve Flattening
Commodity prices in the toilet
China in huge and appears to be long term slowdown
Equities at recent all time highs
Long term govt debts still at ultra high levels worldwide
I usually save this for NCAA tourney time but it unfortunately just may fit for right now.
Commodity prices in the toilet
China in huge and appears to be long term slowdown
Equities at recent all time highs
Long term govt debts still at ultra high levels worldwide
I usually save this for NCAA tourney time but it unfortunately just may fit for right now.
By all means YOU should stay out of the market. It is gambling. It is voodoo. I'll laugh at you on the way to the bank.
Bob Dylan said it best, "don't criticize what you don't understand."
Well . . . that was helpful and friendly.
Are you ever NOT an asshole?
And have you ever - even once - explained what you say others don't understand.
Pretty sure you are 0-2 on those counts.
The Fed induced (QE) market bubble is about to pop. Could make the housing bubble look like child's play.Yield Curve Flattening
Commodity prices in the toilet
China in huge and appears to be long term slowdown
Equities at recent all time highs
Long term govt debts still at ultra high levels worldwide
I usually save this for NCAA tourney time but it unfortunately just may fit for right now.
Investing in stocks (i.e. buying pieces of companies) is absolutely not gambling.
