US Stock Markets Continue To Reach Record Highs- Thanks Obama!

[X Factor 1,112]

I don't think there are too many serious traders here. Or people that even know what really drives the economy for that matter.

It's not what CNBC will try to tell you does...

Exactly. I never listen to CNBC. You are better off doing the opposite of what the charlatans who appear on it tell you to do.

[The Nature Boy 7,659]

I got a fair sum invested. I have no clue. It's all in funds

[Teddy B 17,252]

Why this market won’t crash even after stuffing itself

By Victor Reklaitis

Published: Nov 12, 2015 7:26 a.m. ET

Critical intelligence before the U.S. market opens

Getty Images

Have stocks had enough?

It’s been almost seven long years of this bull run, so it’s no wonder more and more are worrying whether the market has peaked. And if it has topped out, doesn’t that long run mean just as drastic a plunge?

Not at all, says Brad McMillan in his latest blog post. Stocks could now fall, the chief investment officer at Commonwealth Financial Network says, but it will be like dropping from “a second-story window,” rather than “a tenth-story window.”

Stocks are pricey, but there isn’t “a massively overvalued market combined with a drastically slowing economy” like we had in 2000 and 2007, he argues. Equities could get whacked by overvaluations and a recession in the next couple of years, but we’re not there yet, according to McMillan. “As we recently saw, you simply can’t crash as hard jumping out of a second-story window,” he writes, referring to the summer swoon.

But maybe this market actually has more to do with overeating, rather than falling out of windows.

“Reminiscent of trick-or-treaters who overindulged on Halloween candy, equity markets now appear to be digesting the price-recovery feast enjoyed in October,” says Sam Stovall, equity strategist for S&P Capital IQ and SNL Financial, in his latest note.

He points out the three worst-performing sectors during the May-to-August correction — energy XLE, -2.12% industrials XLI, +0.13% and materials XLB, +0.11% — as a group are up 13.3% through Nov. 10, beating the S&P 500’s SPX, -0.32% 11.5% gain. That implies “investors have not given up on economically sensitive sectors and that the bull market is alive and well (but resting),” Stovall argues.

So if the stock market isn’t going to crash (of course, it might do so right after you finish this sentence), then investors may want to avoid safety plays like gold. Read on to the call of the day for a Barclays recommendation to short the yellow metal. On the other hand, today’s chart looks at a stock that is actually crashing — Macy’s is down 38.5% for the year after yesterday’s 14% plunge.

http://www.marketwatch.com/story/why-this-market-wont-crash-even-after-stuffing-itself-2015-11-12?dist=beforebell

[Expat1 971]

All my cash is tied up in pork futures and meat commodities. How bout I give you a big ole sausage?

Sounds great. Put it right in there and hit that switch.

[Teddy B 17,252]

Sounds great. Put it right in there and hit that switch.

That's pretty kinky.

[Sousuke 1,214]

Here's the thing though. Markets are way overvalued and overbought. Every period throughout history that had today's valuations led to anywhere from a 30% to 90% decline in the market. While I'm not expecting the latter, I do expect a similar outcome to that of 2000-2003 and 2007-2009. As in a roughly 50% decline from current levels(meaning, not AFTER going up another 100% from here, although while not probable, it is possible to see another 10% or so rise first).

If you don't care about that, and are a completely passive investor, that's fine. I have no objection to passive investment strategies, provided that they are pursued with discipline and a full understanding of the periodic risks they unavoidably include. My view is that even passive investors should still be careful to align the effective duration of their portfolio with the duration of their future spending plans. Accordingly, I believe that passive investors are being given a very large but possibly fleeting opportunity here to rebalance their duration. Even without any view about future market direction, investors with a 25-year future spending horizon should not have much more than half of their portfolios in equities here.

One might object that changing the allocation as valuations change is market timing and not passive investing. I strongly disagree. Aligning the duration of one’s investment portfolio to be consistent with the expected spending horizon is one of the most basic principles of sound financial planning. I certainly don’t have a problem with people adhering to a passive investment discipline if it fits well with their investment views and financial goals, but I do think that many passive investors overestimate their ability to maintain discipline in a downturn, and fail to align their portfolio with their investment horizon.

The bottom line is this. Think carefully about your own tolerance for risk, with a clear understanding that a 40-55% market loss from the recent high would be a historically run-of-the-mill reversion to quite ordinary valuation norms. Also think carefully about your investment horizon. If you need to spend the funds within a short number of years, you really shouldn’t have more than a modest fraction of those assets in equities here, unless you want the ability to follow through on your spending plans to be highly sensitive to market outcomes.

If your portfolio is well aligned with your risk-tolerance and investment horizon, given a realistic understanding of the extent of the market losses that have emerged over past market cycles, and may emerge over the completion of this cycle, then it's fine to do nothing. Otherwise, it's time to set things right. If you're taking more equity risk than you can actually tolerate if the market goes south, setting your portfolio right isn't a market call - it's just sound financial planning. It's only fun to be reckless if you also turn out to be lucky. Market conditions are now one of the most hostile in history. Can you tolerate a 40-55% market loss over the next 24 months or so? That's not the worst-case scenario under present conditions; it's actually the run-of-the-mill historical expectation.

Have you been shorting GPRO?

Its looking attractive to me this week.

[OriZ 3,157]

Have you been shorting GPRO?

Its looking attractive to me this week.

I don't short specific stocks. I normally work with synthetic short/long futures on SPY.

(or gold, oil, USD etc)

As far as GPRO - I normally do not suggest trying to catch a falling knife. While it may seem like a good idea at times - it rarely actually works out that way. Now, I'm not saying it's not possible to make some money in it if you allocate a certain sum to put into it say, every 6 months for the next 3 years, realizing that you might lose for at least half that time. I just wouldn't pile it all in at once(believe it or not some people actually do that).

[Sousuke 1,214]

I don't short specific stocks. I normally work with synthetic short/long futures on SPY.

(or gold, oil, USD etc)

As far as GPRO - I normally do not suggest trying to catch a falling knife. While it may seem like a good idea at times - it rarely actually works out that way. Now, I'm not saying it's not possible to make some money in it if you allocate a certain sum to put into it say, every 6 months for the next 3 years, realizing that you might lose for at least half that time. I just wouldn't pile it all in at once(believe it or not some people actually do that).

I'm going to wait for it to stabilize first. There has been no resistance at 20.00 and looks like the next test will be the 15s.

[X Factor 1,112]

Here is why I am bullish in the near term and looking to buy the dips.

November is biggest buyback for stocks since bonus depends on stock prices. Plus the CEOs get to rip off the companies. See http://www.ritholtz.com/blog/2015/10/buyback-burst-seen-as-salvation-from-goldmans-sp-500-decline/

The end of December and/or early January depending on market conditions I plan to short certain large cap stocks and sell puts against it for the fat premiums and to finance the short stock positions. Of course this is done with appropriate position sizing. Trade smart folks and know your risk parameters.

Bought the dip Friday and Monday using 6% of my portfolio. About to take profits for some nice gains

[OriZ 3,157]

Bought the dip Friday and Monday using 6% of my portfolio. About to take profits for some nice gains

Nice. I'm still short long term(funny thing is I entered the position right around current levels even though it was many, many months ago. Markets have gone nowhere lol). But like I said before there's alot more than that to my day to day(and day lol) trading on 3, 5, 15, 30 and 60 min timeframe charts. With that system that I've developed over many years I'm currently at 126% YTD after commissions, much better than buy and hold huh?

Edited November 19, 2015 by OriZ

[X Factor 1,112]

Nice. I'm still short long term(funny thing is I entered the position right around current levels even though it was many, many months ago. Markets have gone nowhere lol). But like I said before there's alot more than that to my day to day(and day lol) trading on 3, 5, 15, 30 and 60 min timeframe charts. With that system that I've developed over many years I'm currently at 126% YTD after commissions, much better than buy and hold huh?

That is an excellent return YTD of 126%. Yes being watchful and trading actively is much better than buy and hold. I do use the hourly signal with the 3 or 5 min as triggers for some short term trades. I am up for the year after commission around 20% starting in April. And this return occurred while being in cash 90% of the time and only risking at max about 15% of my portfolio. I plan to ramp up my risk incrementally next year for higher returns.

Edited November 21, 2015 by X Factor

[OriZ 3,157]

That is an excellent return YTD of 126%. Yes being watchful and trading actively is much better than buy and hold. I do use the hourly signal with the 3 or 5 min as triggers for some short term trades. I am up for the year after commission around 20% starting in April. And this return occurred while being in cash 90% of the time and only risking at max about 15% of my portfolio. I plan to ramp up my risk incrementally next year for higher returns.

Actually down atm to 124.8% after the last couple days lol.

It took me literally 6 years of backtesting before I started actively trading using my system. If you have something in hand that you've actually tested thoroughly over a long period of time and decided that it works well enough for you to start taking more risk with it - go for it!

[Expat1 971]

Made a little money since Aug, but I don't see any return beyond this.

I think it's time to get out until valuations return to sane levels.

[OriZ 3,157]

Made a little money since Aug, but I don't see any return beyond this.

I think it's time to get out until valuations return to sane levels.

hear hear!

[B_J 2,752]

This thread is 15 pages long and almost two years old and I don't understand any of it.

Carry on, smart people.