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Never seen this before,its close to what did happen in 2008 but it does feel worse somehow.
The economic problem is real,not virtual like in 2008. Its not something that can be solved with printing money other then keeping companys and banks afloat. It will still be tried though (if only to keep banks and companys afloat) and thats why i also stay away from bonds and fixed.
Not investing long for me till there is light at the end of the tunnel,to much unknowns. I would rather miss the first 20% then be long in a bear market with no clear solution for the problems in sight.
Maybe when vix is back at 20 but that will be a long time. There will be bounces,big bounces,but those are for the traders not for me. Buying friday at close might look tempting,but what good news is there to expect other then more liquidity?
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United States44428 Posts
Single day drop today is higher than any day during the financial crisis. But we’ve had years of artificial pumping before the bubble burst so that’s not unreasonable. I’m just happy I’m in cash and have been for months.
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I'm regretting putting some in earlier into the drop, but I've got 2/3+ of my cash position left. Just going to stay away for a week or two, at least.
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Considering the amount of repo constantly increasing, I expect a day where the market reverses almost as violently as it crashed. It's similar to september, october last year. Constant repo during market tanking. Then a burst to the upside that froze trading and began the latest melt-up now melting down.
This is unprecedented and I can only guess what the dying breaths of a reserve currency look like in these heavily interconnected digital markets. What's for sure is that changes happen so fast with all these participants and algos that the swings become ever faster and more violent.
I'll take physical gold and microsoft stock over cash any day, though. Too afraid that every bank is going to get into trouble, and government might start grabbing from deposits to sustain increasing debt levels. That or they start issuing a parallel currency for consumers that corporations can convert to dollars. Helicopter money with a twist (ie persons can't use it to buy stocks or commodities).
Fun fact: the MSFT dip I bought is still up 0,02% today lol. This is Boeing (but not only) dragging down all the other climbers thanks to ETFs.
Speaking of which, we just saw an explosive 1000 pts. turnaround in the Dow. That's the sort of stuff that wipes out leveraged short sellers. Wouldn't be surprised if inverse ETFs blew up next, leading to a crash to the upside.
Gonna dump the rest of my powder into AAA-rated stuff.
There we go, we've reached half-trillion repos. Could be a bottom.
+ Show Spoiler +
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Was that bump back to around -5% on the dow tied to the fed announcing a trillion$ injection?
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Yep, and it didn’t really take at all.
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On March 13 2020 02:59 farvacola wrote:
Yep, and it didn’t really take at all.
That's what I was afraid of. Was really hoping to be wrong on that one.
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United States44428 Posts
On March 13 2020 03:01 GreenHorizons wrote:Show nested quote +On March 13 2020 02:59 farvacola wrote:
Yep, and it didn’t really take at all. That's what I was afraid of. Was really hoping to be wrong on that one.
Why are you upset? This is capitalism trying and failing to fix a supply side problem with demand side economics. This, more than anything else, is likely to get Bernie elected. Another day like today and the stock market will be below where Obama left it.
All the cheap cash and credit in the world can’t fix people not going to work. Economic activity is moving independently of economic stimulus.
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Yep, this disaster is forcing people to rethink a lot of “fundamentals” they thought immovable.
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I just feel like it is too much for this country to absorb at the social level and I'm fearful of how it will react. Bernie winning with people thinking he's a wizard that can Matilda the mess away could just lead to more unrest.
WSJ says it was $1.5 trillion injection, they could have just wiped out student debt instead.
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United States44428 Posts
On March 13 2020 03:41 GreenHorizons wrote:
I just feel like it is too much for this country to absorb at the social level and I'm fearful of how it will react. Bernie winning with people thinking he's a wizard that can Matilda the mess away could just lead to more unrest.
WSJ says it was $1.5 trillion injection, they could have just wiped out student debt instead.
It’s just a loan. At times like this banks stop issuing credit. That’s an issue because a lot of the stock buybacks in the last decade were justified by cheap debt financing making equity financing irrational. If a Boeing investor wants to get 7% annual returns through dividends and a bank only wants 4% interest from Boeing bonds then you borrow money and buy the investor’s stock back. But if the bank stops offering loans you suddenly have a problem. So the Fed is using the banks as a proxy to give everyone (corporations) subsidized loans so they can continue operations without paying unreasonable interest.
The Fed expects its money back because the underlying assumption of the plan is that this is essentially a run on the banks, that there’s nothing fundamentally wrong beyond a short term artificial scarcity and that once we all calm the fuck down it’ll be business as normal.
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I don't think that several trillions injected within a few weeks will go unnoticed by prices, including stock prices.
It's a lose-lose situation between deflationary bust and hyperinflation. The credit system started out like waves of low amplitude, and we're beginning to go into monster tide territory.
Back in 2008 probably, the method of choice to keep the USD from exploding higher was to blow up a few banks. At least that's how I read the charts. Repos were also conducted but not for this long. Maybe the method of choice this time is just repo infinity.
I'm guessing we get another monster ramp 30 minutes before close.
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short vix now @75?
Tomorrow i think will be a more quiet day.
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just came by to say latin american currencies are falling apart, I think with more certaintity than ever that Argentina will be Venezuela in 5 years
my country was in it's worse shape economically in 30 years because of social unrest (I'll avoid getting politcal using other labels), and boom the markets crash. Coronavirus is not even spread here yet.
I fear the country could even collapse at this point, I'd rather keep cash for the next 6 months and put the rest of my money on us stocks waiting for a 5-10 year comeback.
I bought in the dip too early I'm an idiot btw. I still have around more cash if the market dips more tomorrow.
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What are your guys thoughts on options trading? I haven't really tried it before, just did regular stock buying/selling. Seems like buying options isn't as huge a risk as selling them, and can be used as a way to hedge on some of your investments. Is that how most people use them, or is there a good way to trade them that isn't just gambling? Also seems like right now is a good time to go short on a lot of the market, then get out and go long once things stabilize? Maybe some of the medical companies are worth buying now as they have a good chance of going up during the pandemic?
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Closing vix @ 68? Probably to early but thats ok.
Not optimistic for the next 1-3 weeks to use an understatement.
Options are very expensive now,very difficult to make money with unless you are 100% spot on with timing and direction.
(unless you trade them like market makers do,hedge everything. though that is quiet risky as well in current market)
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Can someone tell me in laymans terms whats happening?
Everything goes down so they pump money into it, decreasing the value of money (even further)?
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On March 13 2020 15:43 hunts wrote:
What are your guys thoughts on options trading? I haven't really tried it before, just did regular stock buying/selling. Seems like buying options isn't as huge a risk as selling them, and can be used as a way to hedge on some of your investments. Is that how most people use them, or is there a good way to trade them that isn't just gambling? Also seems like right now is a good time to go short on a lot of the market, then get out and go long once things stabilize? Maybe some of the medical companies are worth buying now as they have a good chance of going up during the pandemic?
Taking profits partially from stocks and allocating them to long term puts as the market keeps going higher and more frothy could probably be called "not gambling".
If you're good at math you could probably calculate the leverage you need to compensate for drops like these.
Pick a robust issuing bank.
I bought a bunch of 60$ oil calls 1 cent a piece. The Opecs move basically said that they want a weaker dollar or else.
Physical gold will outperform soon imo.
Trump just said he's gonna fill the oil reserves to the top, so there's the confirmation (also huge buy orders going in right after he said it)
Seems like a good time to go short USD. (Still does but we don't see it yet) Bitcoin goes up at the same time? 🤔
Got a feeling that Buffett just puked his 200 billion into the market. Kraft Heinz up 20 %
Not advice etc
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Man, for whatever reason I held onto a bunch of cash over the last year because I was too lazy to invest it. Invested a bunch like <1 week before the first big dip. After that, I saw that it dipped again, doubled-down. Welllllll that all happened before the subsequent, even bigger drops  Boy do I feel fucking stupid, could not have timed it worse.
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On March 13 2020 15:43 hunts wrote:
What are your guys thoughts on options trading? I haven't really tried it before, just did regular stock buying/selling. Seems like buying options isn't as huge a risk as selling them, and can be used as a way to hedge on some of your investments. Is that how most people use them, or is there a good way to trade them that isn't just gambling? Also seems like right now is a good time to go short on a lot of the market, then get out and go long once things stabilize? Maybe some of the medical companies are worth buying now as they have a good chance of going up during the pandemic?
Don’t touch options until you can comfortably trade spot and/or futures.
Selling isn’t always a bigger risk. For example if you sell covered calls it’s less risky than buying out of the money options with terrible Greeks.
There are many ways to use options. Some very risky and some relatively risk reducing. The best risk manager I know dealt almost entirely with options (ex market maker at both arca and cboe)
You need to read up on options. Paper account on thinkirswim is nice to get a good feel too.
Do not take options lightly. You can blow account like nothing if you don’t know what you’re doing
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EPT![[image loading]](https://pbs.twimg.com/media/ES7NYYyXQAIGPcj?format=jpg&name=large)
