Black Monday

[Ggcc]

Yawn, 2 or 3 down days and it will be back to business as usual once the punters remember that Covid and all it's variants are here to stay.

I feel you underestimate this one (covid). You may understand this better than me, being from the health sector, but the majority of people I know are concerned things will never return back to normal and that things will permanently change how we live. Sure I will survive, but will my parents??? That is why I get the impression their generation is spending it and fast on their bucket lists

[Biscuit]

Economies around the world are cracking, banks and governments won't let on, could this be the end of the peak cycle?
Recession/Depression on it's way?
One more serious event and economies won't cope, heavy inflation, ATH high markets, overloaded hospitals, lack of workers and lockdowns taking the strain, Energy crisis, winter in Europe/USA, travel bans to be implemented once more, so on so forth, not looking good and this new variant could be the final nail, does anyone have a similar worry?

No, everything will work out fine.

[bull....]

Yawn, 2 or 3 down days and it will be back to business as usual once the punters remember that Covid and all it's variants are here to stay.

US and european futures are looking decidely ugly for start of trading next week.
Dow showing a nearly 500pt drop to open next week at this stage and you need to remember these drops are occuring on news of a variant in other countries. what will happen when they announce a case in the US

[LEMON]

No, everything will work out fine.

I think I would have to disagree, maybe lil NZ will be okay, but economies around the world are starting to break, look at turkeys huge economy and the Lira has lost 40% of its value now adopting the Dollar, you think that won't have a knock-on effect, surrounding countries will feel the impact

[bull....]

I think I would have to disagree, maybe lil NZ will be okay, but economies around the world are starting to break, look at turkeys huge economy and the Lira has lost 40% of its value now adopting the Dollar, you think that won't have a knock-on effect, surrounding countries will feel the impact

actually i dont think NZ will be ok , property coming off the boil , share market stuffed , all those feel rich factors declining now and then we have covid about to be unleashed on the whole of NZ

[couta1]

US and european futures are looking decidely ugly for start of trading next week.
Dow showing a nearly 500pt drop to open next week at this stage and you need to remember these drops are occuring on news of a variant in other countries. what will happen when they announce a case in the US

News this/news that, real news/fake news, thing is the !onger this goes on adaption improves and the old problem becomes the new normal. Markets have always gone up and down in a zig zag fashion yet they always eventually end up higher than they were before.

[Biscuit]

actually i dont think NZ will be ok , property coming off the boil , share market stuffed , all those feel rich factors declining now and then we have covid about to be unleashed on the whole of NZ

On the positive side, the heat might finally be coming off the property market, the share market seems to be functioning normally and likely the new covid variants that are emerging will be more infectious but less severe, leading to a normalisation of covid over time.

[Bobdn]

At least Tom Lee is still upbeat...

https://www.youtube.com/watch?v=L773q7SHJEI

Also, dividends continue to be paid and reinvested in December which helps the war effort. Smartshares go ex-dividend tomorrow I see. It all helps.

[FTG]

Economies around the world are cracking, banks and governments won't let on, could this be the end of the peak cycle?
Recession/Depression on it's way?
One more serious event and economies won't cope, heavy inflation, ATH high markets, overloaded hospitals, lack of workers and lockdowns taking the strain, Energy crisis, winter in Europe/USA, travel bans to be implemented once more, so on so forth, not looking good and this new variant could be the final nail, does anyone have a similar worry?

I, like a few others, have often been humbled since the GFC. Many times thinking, "this is the time; surely the market is overdue to have a more substantial & sustained correction", only to have that thrown back in the face with the market continuing to charge on.

Intriguing yet irrational, & "unpredictable" market behaviour has been a fact of life since Adam first started trading. We should remember that "a market" is simply a collection of a whole lot of 'intriguing', irrational & "unpredictable" participants (put another way, characters on the Stage of life!). The trick is being able to read the body language of the market, as that will give us an indication to what is really happening. When it is "lying" for example, and hence we should proceed with more caution.

Learning from & reminiscing a little on the last proper & sustained "Crash" in NZ (1987), it's a reminder that, despite overwhelming facts to the contrary, sometimes we can be guilty of being so tunnel-visioned, that we ONLY see the positives in a situation. The allure of potential riches can blind us from seeing what the market 'body language' is telling us.

In '87 on the NZ Market (Barclays Index), the market had already printed an ATH a month prior to the Oct 20 crash day. It had already corrected over 5% off that high and triggered some important sell signals. What a few folk may not know/remember is that NZ's Oct 19th (our Monday), followed a sharp down day on the Dow (their Friday) - about 160 points from memory (wow crazy, not even a 1% move in today's context!). Despite this, many Kiwi's (professional traders too I might add) were still drunk from the dizzy times we had experienced in the previous 5 years. Hence totally blind to any signs that carnage was about to unfold on the Tuesday (Black Monday USA).

Coming back to today, you ask a salient question. A question that 99% of us won't truly know the answer of until well after an ATH is printed.
But........for whatever it's worth, my read of the market's body language is that the underlying health of the market is very sick. It's been on artificial life support and a cocktail of steroids for quite a while now. At some point the market participants will realise this and confidence (bravado) will evaporate (quickly or slowly, situation dependent). As a student of TA, my preference is for that confidence to evaporate more slowly. Hence giving more time & data flow to read the signs and act accordingly. However, the level of artificial support & leverage in the US market is now at unprecedented levels. All it may take is for another Black Swan event to make that confidence evaporate in an "instant".

Coincidentally, I recently opined here that 4600 on the S & P 500 is a significant level, and ~ 4750 was the next level to watch on the bull trend. Well, this week it hit an ATH of 4745, but then reversed to 4595 (with the biggest 1 day fall this year) to sit back right on the significant level. Also leaving a Bearish engulfing pattern on the weekly chart. It seems that the market is treating those levels with some respect.

Next week MAY be telling & interesting!!

In a finishing note Lemon, regardless of your view of what the market has, is & will do, long term success in trading & investing is more assured if one has, and routinely reviews, a well considered trading/investing plan. Part of a great plan is ensuring that you have "insurances" in place. So whatever direction the market takes, whether it be a melt-up or meltdown, the overall portfolio is better protected from the "irrational" or otherwise, actions of the market.

[winner69]

If you’ve got a portfolio of investments that can have non-linear outcomes, never sell early.

You may be right most of the time, but the one time you’re wrong will cost you most of the returns.