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FEATURED! The Coming Recession (2018-2019?)

Discussion in 'Investing/Trading/Cryptocurrency/Altcoins' started by JScott, May 27, 2018.

  1. jimmeboy
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    jimmeboy Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Interested to hear people's thoughts as to where you think we are headed now the elections are over?
     
  2. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Well my theory did not come to pass and I'm now done with that piece of the speculation.

    However I still was able to make a pretty nice chunk of change with the downturn. As I highlighted earlier in this thread (the how toos), when the market tanked pretty bad I did sell back a lot of the puts, more than half. That guaranteed and locked in my profit.

    The rest was "house money" which obviously, didn't come to pass.

    Wall Street likes gridlock. I believe the bias is still slightly up to sideways. (Good for option writers). I will revisit my theory in the summer of 2020 before the next Presidential election.
     
  3. Arun Siva
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    Arun Siva aspiring 大君 of the bourgeoisie Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass Summit Attendee

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    recession? what recession? we dont use that word where im from lol. If USA recesses thou could solve problems elsewhere and remain resourceful. But kudos to those that follow the market and the econometrics that continue to baffle me day in and day out. Aggregate supply-demand and price elasticity has been sporadic this year across many of the brick and mortar industries...
     
  4. JScott
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    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Nothing has changed from my perspective...

    - The yield curve is still flattening
    - Interest rates are still rising
    - Consumer debt is at an all time high
    - Corporate debt is unsustainable
    - National debt is out of control
    - New construction has stagnated
    - Existing home sales are soft and we've moved to a buyer's market in many areas
    - Corporate earnings are a mixed bag -- many misses this past week
    - Wage growth still lags inflation

    I sold off my Put LEAPS when the market corrected a couple weeks ago. I bought them all back today.

    I think we're at the top of the market, and while we may bump along at the top for a few months, I think we'll see even more clear signs of the downturn by 1Q19.

    Just my $.02...
     
  5. MJ DeMarco
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    One of the most concerning metric for me is market leaders are no longer leading, unless leading DOWN is the lead. Stocks like Apple, Amazon, NVIDIA, NFLX, FB ... all of these have been trending down, and it they started in the late summer, while the general market was still rising. This for me was a big "tell" that something was up. And it was. The decline may continue, maybe slow and measured vs severe and dramatic.
     
  6. Rivoli
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    WTF is going on

    Dow down 600 points.

    Is it the end?
     
  7. JScott
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    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    The end of what? This entire thread is about an impending recession...given that, volatility in the stock market shouldn't be surprise...
     
  8. fluffhead
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    fluffhead Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    It is certainly starting to feel like the good times may stop rollin' here fairly soon. You have institutional investors looking for any reason to sell a stock or to go short a stock and relatively good earnings results are being met with double-digit declines in trading. Despite all the negative sentiment I do see some positive things to point to which is why I agree with MJ in that we're likely in a sideways to grinding higher market (for now). China/US trade is the biggest variable and should show some progress at G20 (positive catalyst), U.S. economy remains very strong (GDP growth, unemployment rates, etc.) and we are now in gridlock following the midterms, which (again to MJ's point) bodes well for institutions (they hate uncertainty).

    The only thing that derails this story, in my view, is 1) China growth CRASHING, 2) continued hawkish commentary from the Fed (which would come along with a rate hike in December) and/or 3) continued uncertainty around trade with China.

    That being said, I hope that 2019 we start to see chinks in the armor so I can go out and load up when there is blood in the streets!
     
  9. Rivoli
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    I mean the end of the bull run.

    I literally didn't move into a new building cause this thread and seeing it play out in the market.. I'm currently in 4,000 sqft was going to move into 8,000 cause growth.

    Now I'm holding onto my money..
     
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  10. MJ DeMarco
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    I hope so, better opportunities when everyone is running around like chickens with their heads cut off.

    And maybe a 30% stock market correction will put an end to all these stupid schemes where people think they can "retire" at 40 with $250,000 saved in the market where they actually make more money blogging about it, than they do earning investments.
     
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  11. Never1
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    600 points is still not quite a 3% move, at this level. It’s a bigger drop than what might be considered usual, but not a cataclysmic selloff. 15yrs ago, it might be worrisome. With increasing volatility, 2-3% swings are normal. If you’re day trading, or swing trading, make sure you account for the increase in ATR, to not get stopped out of larger swings.


    Sent from my iPhone using Tapatalk
     
  12. Rivoli
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    Yeah but I'm my first year in business and 99% of my business is selling to retailers. A recession would be very bad for my company I think - and I'm in manufacturing. I'm just breaking even now 10 months in (it took 1.8 million in sales to do it..). I really hope it doesn't happen until at least 2020. I'm not ready.
     
  13. Jaden Jones
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    The RUT saw the death cross yesterday. Although a little up today, this historically means the beginning of the bear market. Anyone have any thoughts on this?
     
  14. nitrousflame
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    nitrousflame Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    This post by SentimenTrader on Twitter seems particularly relevant:

    It seems like we're at a bit of an indecisive point. Personally, I'm trying to keep an open mind either way, at least until it looks like more of a trend is established one way or the other.

    Edit to add:
    Additionally, the last time a death cross occurred:
    [​IMG]
    Source: Chris Ciovacco on Twitter
     
    Last edited: Nov 14, 2018 at 12:22 PM
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  15. MJ DeMarco
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    Yea I don't put much faith into that, I think a much better gauge are macro indicators and how market leaders are behaving.

    Ha Ha, the data will seem to say it's a contrarian indicator.
     
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  16. garyfritz
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    garyfritz Silver Contributor Read Millionaire Fastlane FASTLANE INSIDER Summit Attendee

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    This chart shows RUT death crosses for the last 20+ years. Vertical lines are crosses. After 9 out of 12 crosses, the RUT headed UP. Looks like a pretty lousy bear-market predictor to me.

    [​IMG]
     
  17. garyfritz
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    garyfritz Silver Contributor Read Millionaire Fastlane FASTLANE INSIDER Summit Attendee

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    I should add some commentary to the chart. The "death cross" has had lots of lurid press, but it's just the crossing of two MAs. What does that actually mean? It means the fast moving average has turned down faster than the slow moving average. That's ALL. That happens any time the market has a sharp down move. It DOES NOT inherently predict ANYthing.

    Now it's possible that a signal like this, which in itself does not actually have any mechanism to predict anything, tends to precede particular market events. Maybe the sharp down move that triggers the death-cross scares enough people into selling, so that it actually pushes the market down further. If you think it's actually a decent signal to predict the event, then research it. In this case I researched it and found it didn't predict downturns at all. Toss that one in the bin, the theory didn't pan out. But if it DOES seem to have a good record, you could start trading it or at least paying attention when it signals a possible event.

    MA crosses are a particularly bad signal. You can look at any major market move and see that they were preceded by a cross -- great signal, yah? No. Look closer and you'll see there were many crosses that were NOT followed by a big move. You get lots of MA crosses when the market is muddling around going sideways. There are too many false positives to actually do anything with the signal. Maybe it can be used as one piece of a signal, but by itself an MA cross is a losing signal. It takes a lot more than that to extract profit out of today's markets.

    Don't believe everything you believe in the popular press. Study it yourself to see if it's real.
     
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  18. Jaden Jones
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    No arguing with the data here. I guess we wait and see what the future holds as usual.
     
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  19. Never1
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    One of the moves that often predicts a changing trend is a confirmed break of the 150dma.




    Sent from my iPhone using Tapatalk
     
  20. MJ DeMarco
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    IOW, the trade has a 75% success rate, buy at the death cross, don't sell.

    I wonder how market leaders performed in that history ... in a downturn, the leaders are suppose to stubbornly follow, not brazenly lead.
     
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  21. levijean
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    levijean Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Probability of a winning trade is only part of the formula. What is equally important is how much you win/lose. You can be correct 10% of the time and still do very well in the long run. You can be correct 90% of the time but go bankrupt.
     
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  22. Suzanne Bazemore
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    Yep: Me, playing blackjack.
     
  23. garyfritz
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    garyfritz Silver Contributor Read Millionaire Fastlane FASTLANE INSIDER Summit Attendee

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    I wouldn't even bet a lot on that. I think the death cross is a good predictor of a buy signal IN AN UP MARKET. Of course, so is almost ANYthing, when the market is going up. Probably the death cross would hit 75% wins for a short trade when the market is trending down.

    IOW, the death cross doesn't predict much of anything. It's just an uncorrelated event that happens during an uptrend or downtrend.
     
  24. MJ DeMarco
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    NVDA down nearly 17% after hours after earnings. The cypto bear market is hurting them pretty bad, stands to be the largest drop for them in over a decade.
     
  25. lowtek
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    Not only that, their latest high end GPU is having issues. Word is the supply at the AIB level has dropped off the face of the Earth, and there are reports of failures and units catching fire in the wild. I wouldn't be surprised to see more downward movement, but ... then again I'm not a stock expert :p
     
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