Investing General Discussion

Jysin

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Market is always forward looking. It isn't unaware of the risks and have largely been priced in. To get anywhere near the lows again, we are going to need another swan event, inflation reversal back to highs, or complete and utter destruction of earnings in Q4'22-1H'23. I definitely believe we see further earnings revisions downwards over the next 6 months, but I really can't see us anywhere near lows unless China invades Taiwan or Russia / Ukraine war spills over into Europe.

My 2c

*edit* Just wanted to clarify: I am not saying we just rocket back off to highs either. I see us in a continued range of consolidation and range bound until things start getting markedly better. I am in the stagflation camp of increased wage pressures forcing higher prices onto the consumers and repeating a vicious cycle. Certainly not at the same 10% annual pace, but a still devastating 5-7% for the forseeable future.
 
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Sanrith Descartes

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To echo Jysin Jysin baring an event the market hasnt priced in (actual shooting war between Nato and Russia, actual invasion of Taiwan by China, the 2nd American Revolution kicking off etc), my prediction is lots of sidewise movement in a large trough. The red lines arent exact numbers, just a generic trough for visual effect. Some individual companies will buck this trend on both the top and bottom.

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Haus

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To echo Jysin Jysin baring an event the market hasnt priced in (actual shooting war between Nato and Russia, actual invasion of Taiwan by China, the 2nd American Revolution kicking off etc), my prediction is lots of sidewise movement in a large trough. The red lines arent exact numbers, just a generic trough for visual effect. Some individual companies will buck this trend on both the top and bottom.

View attachment 445215
OK, and here is where I ask for you to enlighten me as you obviously know far more about this than I. In your trough you show what are your basis points for where the lines are? When I look at the highs around the first of the year (and nearest short term lows) to now it seems to form a downward sloping trough for me.

1669732643345.png


This channel would say we're in a sloping downtrend until something significant changes, and it's all within the band except for those outlier weekly closes in the beginning of June. If the market follows the "The trend is your friend.. until the end" then we have to have an "end" event to reverse this. Or am I getting a bad read here? Even the current macd (which I know is a trailing indicator) is showing that the momentum from last week to this week seems to be losing steam. (matching the price action)
 

Aldarion

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Yes. We are in a downward trough pretty much all year. Our next stop should be around 370.

The great thing about investing though is there is no need to argue about it, and can just place our bets instead. Bear stuff has been making money all year. I don't think its done yet. Look how long we've been hanging here around 395-400.
1669733100720.png
 
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Jysin

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Bear stuff has been making money all year. I don't think its done yet. Look how long we've been hanging here around 395-400.
Markets also don't move in straight lines. Consolidating here is healthy for the bull case. The fact is hasn't just dumped down on skittishness is a change in market dynamics vs the rest of the year. The reason for this is fundamental change. All year, the market kept getting blindsided by hotter vs expected CPI prints and Fed moving stronger vs expecations to combat it.

We have moved up off the bottom and holding this range for good reason. Inflation numbers aren't surprising to the upside (for now) and the Fed has become pretty clear that is is getting closer to its target funds rate.

If you are waiting for the Fed to give the "all clear" signal before you start buying and scaling in, you are going to miss the bulk of the move. Markets typically are well ahead of Fed moves. (Bottoms typically come before Fed shift in policy)
 

Aldarion

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A lot of that matches with conventional wisdom I've read. You may be right; certainly you're closer to the consensus viewpoint.

I've come to doubt that markets are as driven by external events, or as rational, as many market watchers write about.

But whatever the case, I'm not waiting for a bottom to jump in, I've been making money on the way down and have no worries I can make some on the way back up. No interest in timing the bottom. Its not a loss to miss a day of upward movements in the markets any more than its a loss to miss a day of downward movement. Its only a loss when my number goes down.
 

Sanrith Descartes

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OK, and here is where I ask for you to enlighten me as you obviously know far more about this than I. In your trough you show what are your basis points for where the lines are? When I look at the highs around the first of the year (and nearest short term lows) to now it seems to form a downward sloping trough for me.

View attachment 445217

This channel would say we're in a sloping downtrend until something significant changes, and it's all within the band except for those outlier weekly closes in the beginning of June. If the market follows the "The trend is your friend.. until the end" then we have to have an "end" event to reverse this. Or am I getting a bad read here? Even the current macd (which I know is a trailing indicator) is showing that the momentum from last week to this week seems to be losing steam. (matching the price action)
Pretty much the exact reason I typed this sentence "The red lines arent exact numbers, just a generic trough for visual effect."

I have never been a fan of upward/downward lines of convergence for charting. Some swear by it, but I am indifferent to it. I just drew the two red lines to show a "generic trough" for intent of showing "yeah I think we will move sideways until a fundamental market change occurs" and it will be sort of capped around "here and here"
 

Creslin

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The market has priced a tough h1 next year yes but it hasn’t priced in a tough h2 or a tough 2024 or rates staying at 5% for a couple years.

I think that is where you could see new lows if the mid term future starts to look weak too. And if inflation falls but not enough and rates stop at 5% but don’t come down then that’s entirely possible, even likely.
 

Sanrith Descartes

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CRM reports earnings tomorrow, last of the real companies left to report. Should be a good indicator of economic health in terms of sales.
 

Sanrith Descartes

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I see an opportunity building for a long term investor who doesnt mind the politics with AAPL. "Ideally" I like it in the $120 - $125 range should it ever get back there. That being said I think the China Foxconn issues are very short term and the moves down are taking it into a place that could be an entry around $132 - $134. Do your own due diligence of course.

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