Investing General Discussion

Last one for the night. Let's go the tape and rewind to 2018

This is the second half of 2018:

A: strong rally that lasted months. Moving averages look great with shortest on top, longest on bottom all upward pointing. Then a very scary decline due to the Fed being offsides.
B: This is where we are right now comparatively. We have shot right through the 200d, a relief bounce is what follows.
C: That relief bounce fails, the day concern increases is right to the left of the C when we can't hold the 200d and close the day back below. The market probes even lower and this time rallies even harder, but again it can't hold above the 200d. It does this yet one more time .
D: By this point the giant red candle to the left of the D is a huge bad news day. Successfully navigating that particular week would be almost impossible.
E: Right here I make the following post:

Blazin said:

I don't believe in making quick decisions on long term money, but I did make a move towards cash today on LT money. My gut tells me that this market cycle is still not over, but the technical's are looking quite bad, and I follow a discipline regardless of how it may feel in the moment. We need to recover 20 month moving avg soon to avoid this turning into something uglier than a deep correction. The outlook in late 15-2016 was also quite bad and we ended up rallying quite hard off the Feb'16 lows. Not telling people to panic, anyone who has seen me post here for years knows that's not something I would do, BUT if you have strong gains going back to the beginning of this bull market it may be prudent to start watching a little to see if you want to take some off to have cash to redeploy at better prices.

We sometimes wait years and years for those low PE opportunities, so maybe the better message given the average age person here is to get cash ready, even if you would rather leave current investments alone. (timing the market successfully has low probability of success) We may be seeing some good companies at prices that just recently seemed unreachable.

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I chose to be patient with the market, I didn't panic sell at B. I was trying to give a chance for the market to resume the primary trend. The 200 flattened and then even began to turn down and then we lost the 2640 level. The evidence had changed so I responded and moved to cash.

I then made this post:

Blazin said:

I could see it stopping 2400~ and a recovery to 2800-2900 sometime in 2019.

The secular bull trend can stay intact all the way down to 2150-2200 so it is likely to be some scary moments but still keep the longer trends healthy. One day at a time, we aren’t going to adjust from 7yrs of super low rates without some pain along the way.

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For some fun laughs go find the Pops post right below that post and have a chuckle about which of us understands markets better. The market went on to bottom on Christmas Eve at 2350 slightly overshooting my target. I bought at back in at ~2400 and four months later in 2019 it hit my 2900 target. I don't go over this to jerk off to my timing or predictive skills but to show that there is a method to it and sure as shit isn't rooted in emotion of the day. I occasionally say "my gut" and it's probably a bad habit, but at some point subjective decision making interfaces with objective data. What I call the weighing the full evidence is the "gut" final call. It's probably a pretty crucial part of the discipline that maybe some people are better suited to than others, some people are better at laser focusing on one thing versus people who can consider many things at once. In different disciplines these traits can be a positive or negative, in the stock market it is quite clear which is the preferred trait.

I hope this helps put today's market in perspective and how to navigate difficult markets if you aren't comfortable with just buy and hold.