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CabinBuilder/Author
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Discussion Starter #1
Will the Dow or S&P show a classic double bottom formation? like occurred in 2002 and 2008?

Will it be when you hear your barber, taxi driver, McDonald's workers, all saying they'll never go into or be in stocks. . . and no one wants to touch stocks.

Will it be when you know, or hear strong rumors that they've created a legitimate vaccine? Duh. Which would cause an extremely sharp run up, thus there's no way to predict this scenario.

Will it be when it hits a predetermined %? Like 50% down? 60% down? We're down 30-35% now.

Many people may be jumping back in right now, but I think it's too soon, barring the newly discovered vaccine. Interesting article by the WSJ - https://www.wsj.com/articles/the-wo...here-yet-banks-and-investors-warn-11584877018

What do you look for to signal the time to jump back in?
 

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Dog Lives Matter
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Once we come off the top of the curve for coronavirus infections, the stock market will begin to rebound. A couple of months after this thing has passed, the markets will be back up there.

The stock markets have been a roller coaster since 2008. Volatility does not instill confidence. I personally avoid stocks, but I'm sure my retirement accounts have suffered.
 

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Will the Dow or S&P show a classic double bottom formation? like occurred in 2002 and 2008?

Will it be when you hear your barber, taxi driver, McDonald's workers, all saying they'll never go into or be in stocks. . . and no one wants to touch stocks.

Will it be when you know, or hear strong rumors that they've created a legitimate vaccine? Duh. Which would cause an extremely sharp run up, thus there's no way to predict this scenario.

Will it be when it hits a predetermined %? Like 50% down? 60% down? We're down 30-35% now.

Many people may be jumping back in right now, but I think it's too soon, barring the newly discovered vaccine. Interesting article by the WSJ - https://www.wsj.com/articles/the-wo...here-yet-banks-and-investors-warn-11584877018

What do you look for to signal the time to jump back in?

A bottom is never apparent until well after it occurs.
 

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Nunquam Non Paratus
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Personally I'm looking at the market itself but more so at the individual stocks and companies. For instance, Carnival CCL has been hit predictably hard by this. I think it will rebound, and in support of this is the fact that the CEO, Micky Arison, is a long-time acquaintance and business associate of Trumps.
 

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I have been thinking the correction would leave the DOW around the 12,000 - 15,000 range but that was long before the virus came into the picture. It could be much more severe.
 

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CabinBuilder/Author
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Discussion Starter #8
I was thinking 15000, SS, but decided not to mention this, to see if anyone else came up with it. You could be right, maybe even lower. Your place up there in God's country is probably priceless, regardless of 'how low will it go?' :thumb:
 

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Comic, not your lawyer!
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This article seemed to suggest that even AFTER a stimulus, the markets fell another significant amount, ~50% more.

Congress is kicking around a $4 trillion with a "T" stimulus, and markets are not impressed. Right now, futures down 5% and tripped the limit switch.

https://www.wsj.com/articles/the-wo...here-yet-banks-and-investors-warn-11584877018

We're down about 30-35% now from the top. Expect IMHO some minor rallys and some big drops and continuous drops until most people feel the worst is over. The sick and dying level off and people start going back to work and states lift restrictions.
Until then, people can't work, can't labor, can't product, can't buy, can't sell, can't travel, can't do much of anything so no profits.
 

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Sam Adams was right....
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My expectation is that, at a minimum, the markets will return to the historical mean for P/E ratio...

Current DOW: 18511
Current S&P: 2195

Return to Mean
Mean P/E Ratio: 15.78
Projected S&P: 2099.11
Projected DOW: 17952.36


We're almost there... and I'm expecting the DOW to blow through the Mean numbers Monday/Tuesday. Pre-markets are already baking in no deal getting done in Congress... As long as the quarantine exists the economy is effectively shut down, and the only direction the DOW can go IS down

Even with a deal the virus remains and the quarantines will too, and we haven't even gone through the worst of the virus yet.

The reality is until we are done with the quarantines we'll continue to have further market decline.


... and the FED will not be able to stop the bleeding DOW.
 

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Comic, not your lawyer!
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It will be curious to see what the stimulous does for the markets in the short run.

The last two major events in 2001 and 2008 were not impressed with the stimulus and continued a downhill slide for a while. I am reluctant to call this the bottom... I suspect it's a fools rally... cautious.
 

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Golfer
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What do you look for to signal the time to jump back in?
After the last two collapses it you waited till the S&P crossed back over its 50-day moving average you would have done the right thing. The crossing for the dot-com collapse took almost three years, the financial crisis, a year and a half. No one knows what the number or the time for the crossing will be for the coronavirus, best wait till it happens... if ever!
 

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You'll see the bottom in your rear view mirror. Markets had a stupid run in the last three years. Valuations were idiotic just like the analysts that pumped them. Wish I was still a prop. desk trader given all this volatility.

Godspeed
 

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The DJIA is 21,530 at the moment. I think we are getting close to the end of the dead cat bounce.

The stimulus package should be a help to the market. I had said we'd be at the bottom at 14,500 which is 50%. Maybe it won't drop much more.
 

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Comic, not your lawyer!
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Let's review.

In 3 years, the markets soared. In several weeks, and 3 months for oil due to the oil wars, all those gains evaporated. Or oil, it's the 1-2 punch of the oil wars and lessened demand due to lack of travel and manufacturing and trade. For most others, it's the fears and actual losses accompanied with a economy that just about ground to a halt. And a lot of corrupt business practices were exposed, like artificially inflating stock prices by irresponsibly using cash to buy shares...

Government tried 2 or more rounds of soft bailouts with various buy backs and reductions of interest rates and the markets kept going down.

Now, with a multi-trillion dollar stimulus inked, 2 days of radical sugar high soaring stock prices.

What has changed?
* Virus is still here, and that's the underlying problem.
* People still out of work, and more added daily.
* Industry still standing still.
* Nobody traveling anywhere.
* Cooking books problems has not seemingly been fixed but it should be in the stimulus.

So nothing has changed. This stimulus will be forgotten in a day or week. If you look at the 2001 and 2008 crashes, stimulus may have stopped the bleeding temporarily but the markets still took a beating for weeks afterward.

Until the underlying issue is somewhat resolved, and people are back to work and traveling, I think these gains are short term...

Otherwise I made a big mistake missing the bottom! lol. YMMV and this isn't stock advice.
 

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The DJIA was close to 22,000 this morning, as expected late in the day, it is slipping, now it is 21,860 and has been bouncing around.

Starting to do the late-day slip thing now. Dropped 70 points in the last 5 minutes...
 

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Bug-In Prepper
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In the long run, the market trend is up and to the right.

If you're investing long-term, it's fine to wait until the recovery is "well underway" to get back in. Five years from now it won't matter if you missed investing at the absolute bottom by a few days.

If you're a gambler but wanting to hedge your bets, figure how much you're willing to invest, chop it in thirds, and invest each third at least a week apart. That gives you the potential to see high gains from the early investment, while limiting your exposure to risk of the market tanking further.
 

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The Dow closed at 21,200, a little better than the previous day close. It never dropped below 20,571 yesterday. It may be coming back to life.
 

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Comic, not your lawyer!
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Ginormous multi-trillion stimulus package, and on the heels of several other major government actions like negative interest rates and buying up assets with many hundreds of billions of dollars. Many days of the biggest gains in market history.

Right now, the major indexes like the DJIA and the S&P500 are still trading at 2017 levels...
 
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