The Market 2022-2023-2024

[Folster]

I thankfully and luckily got out of my TLT long in my 401k just in time. I definitely didn't see this liquidation coming to treasuries coming on so hot like this... But, it's so rapid that I can't see how's it's sustainable from a chart or dollar perspective. Dollar parabolic up, long bond parabolic down doesn't happen on a frequent basis over time..

Yeah I got out of my triple bear short, TTT too early, still made money, but left a lot on the table. It was a small speculative bet though.

 

[dscher]

Yeah I got out of my triple bear short, TTT too early, still made money, but left a lot on the table. It was a small speculative bet though.

It was really just part of that credit market carnage we've seen that started in January...

 

[elindholm]

You could always sell it tomorrow.

Wow, it looks like everyone had that idea. After closing at 7.15 yesterday, it jumped over 8 at the open (har) this morning -- and now has, in just a few minutes, fallen to the low 6's!

 

[Folster]

It'll be interesting to see how this week ends. Whimper or rally? The last 2 hours should be interesting.

 

[dscher]

If the QQQ/NDX closes below 13k for the week we lose support levels from March. That could trigger the next leg down for the broader market.

 

[Folster]

If the QQQ/NDX closes below 13k for the week we lose support levels from March. That could trigger the next leg down for the broader market.

What does that correspond to with the actual Nasdaq composite?

 

[dscher]

What does that correspond to with the actual Nasdaq composite?

12,500.

 

[dscher]

What does that correspond to with the actual Nasdaq composite?

Although I can't see it meaning much since tech is the market. But, SPX weekly level looks to be about 4100. Its looking like they'll decide that level in the closing hours.

 

[dscher]

Still seeing ALOT of correlation with stocks and treasuries right now during the trading day. T Bond selling continuing with stock selling usually indicates something is "off" in the market.

 

[Folster]

I just don't see any lasting upside in the market until we see what the impact of the balance sheet reduction will be in June.

 

[dscher]

I just don't see any lasting upside in the market until we see what the impact of the balance sheet reduction will be in June.

Any thoughts on the credit products getting wrecked? Bond market screaming to the fed for a massive balance sheet run off?

 

[Folster]

Any thoughts on the credit products getting wrecked? Bond market screaming to the fed for a massive balance sheet run off?

Powell has proven over and over again that he will not surprise the markets. Every move has been telegraphed. He has altered stated plans, but not before he communicates the changes for the markets to digest prior. I just don't think you are going to get any shock and awe from Powell and the Fed unless things were to spiral out of control.

 

[dscher]

SPX did it's thing and stayed above 4100. The tech sector remains under pressure. So goes tech...so goes the market. Also interesting to see big selling in some risk asset spaces with a crushed VIX.

 

[dscher]

Powell has proven over and over again that he will not surprise the markets. Every move has been telegraphed.

Looks like the talking heads are using the excuse of Powell taking 75 bps hike off the table as a reason for potential distrust in his message for the weakness seen the remainder of the week...

 

[dscher]

"The economy is strong... the consumer is strong"

-Jay Powell


Anyone still trust the Fed at this point?! Comical.

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[dscher]

The strategists offer up one final factoid that may also give investors some comfort. Hartnett and the team noted that for every $100 invested in equities over the past year or so, only $3 has been redeemed.

As well, the $1.1 trillion that has flowed into equities since January 2021 had an average entry point of 4,274 on the S&P 500, meaning those investors are “underwater but only somewhat,” said Hartnett and the team.

Based on 19 bear markets in the last 140 years, here’s where the current downturn may end, says Bank of America

If the S&P 500 were in a bear market, and some say it is, this is when it would end, says Bank of America.

www.marketwatch.com

Comforting. They got ALL of retail in at the top. Rinse. Repeat. Congrats Wall Street!

 

[Folster]

ARKK is down 73% from its ATH. I thought it would be interesting to compare it to some other broad indexes.

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So the S&P 500 has caught up to ARKK in the 5 year and even the broader S&P 1500 is only a tenth of a percent behind which is quite remarkable considering where we were a year ago. QQQ is trouncing ARKK and holding up well. If you are of the belief that you can't beat the market long term, you'd assume that the S&P 500 will eventually catch the Nasdaq/QQQ, but that would require a significant sell off of MSFT, AAPL, AMZN, and GOOG. Obviously, the S&P 500 would not be unscathed if that were to happen, but it does not have the same concentration in those names. It will be interesting to see what happens with QQQ vs SPY over the next 6-12 months.

This chart makes me think we could be in the for a tough time yet, especially if you ascribe to mean reversion

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[dscher]

QQQ is trouncing ARKK and holding up well.

As it should. IMO. Her holdings were purely speculative (no earnings/post COVID trade) with her growth model needing to pan out in a semi no growth environment most analysts could see before stuff hit the fan and the market is punishing her...as it does with most speculative traders in the market. Simply, she got greedy with her model, didn't maneuver when she should have, and got slaughtered... It happens to many traders/investors/managers.

 

[Folster]

As it should. IMO. Her holdings were purely speculative (no earnings/post COVID trade) with her growth model needing to pan out in a semi no growth environment most analysts could see before stuff hit the fan and the market is punishing her...as it does with most speculative traders in the market. Simply, she got greedy with her model, didn't maneuver when she should have, and got slaughtered... It happens to many traders/investors/managers.

What do you think about the Nasdaq vs the S&P 500? Will they converge?

 

[dscher]

What do you think about the Nasdaq vs the S&P 500? Will they converge?

Well. I use relative strength charts to see what directional clues I can get from all three. (Dow, Spx, QQQ) Currently, it's all about rates. If we get another spike in the 10 yr, then they will continue to diverge. I still think we get our collapse in yields, eventually, and when that happens you will see the convergence. But I can't even get a good grip on when T bond selling will stop. Everything's still a falling knife in the credit markets. When you cut through levels of support like that.. it means volatility is becoming irrational and moves can be extremely unpredictable.....and wild.

 

[Russ Smith]

Another brutal day, started out ok but Nasdaq in particular is just cratering again.

Our nephew who was bragging recently he's glad he's in crypto not stocks he's actually doing worse than we are now.

 

[dscher]

Money rotating into treasuries a little bit today compared to other heavily beaten up bonds (corporate/muni's/MBS)... Something I'll be laser focusing in on over the coming weeks.

 

[Folster]

Oil related stocks are getting rocked!

 

[elindholm]

Another brutal day, started out ok but Nasdaq in particular is just cratering again.

Our nephew who was bragging recently he's glad he's in crypto not stocks he's actually doing worse than we are now.

Crypto was doomed from the beginning. Just like any pyramid scheme, some people will end up making a killing off of it, but most will take it in the shorts.

KNBE getting killed today, with their earnings report due tomorrow morning. Something got leaked, or maybe massive insider activity. I haven't tracked down what's going on.

Good old K still trying to fight the good fight.

 

[Folster]

Crypto was doomed from the beginning. Just like any pyramid scheme, some people will end up making a killing off of it, but most will take it in the shorts.

KNBE getting killed today, with their earnings report due tomorrow morning. Something got leaked, or maybe massive insider activity. I haven't tracked down what's going on.

Good old K still trying to fight the good fight.

It's so obvious that crypto is a scam to me just by looking at the demographic hyping it. It's shocking it has gotten as much institutional adoption as it has thus far. NFTs are digital beanie babies. I will relish in the collapse of this nonsense.

LOL at K. Pass the corn flakes.