Stocks - The Best Buys 2

[manwiches]

Lmao. If anybody actually believes this rally is the reversal, they're in for a ride awakening soon.

200dsma is above on all the 4 queens, and probably will test and reject hard, then fake breakout for the Santa Rally before maximum death for 2023.

I'm looking forward to the death. I'm a perma bear and love to short the market.

Sent from my SM-N975W using Tapatalk

[bluejays]

Originally Posted by manwiches

Lmao. If anybody actually believes this rally is the reversal, they're in for a ride awakening soon.

200dsma is above on all the 4 queens, and probably will test and reject hard, then fake breakout for the Santa Rally before maximum death for 2023.

I'm looking forward to the death. I'm a perma bear and love to short the market.

Sent from my SM-N975W using Tapatalk

Care to explain what this all means?

[Slava]

^ he’s saying that the indexes are all below the 200 day moving average. We’ll get a Santa Claus rally and it’s a head fake, so we go lower in 2023. Those indexes are the US main indicies and those are the futures prices.

Oh and by “test and fail” he means the S&P gets to 4081 (which is the 200 day moving average) and doesn’t get through that, comes back down and then the Santa Claus rally.

I should note, I’m just translating. This isn’t my view of things.

[bluejays]

Originally Posted by Slava

^ he’s saying that the indexes are all below the 200 day moving average. We’ll get a Santa Claus rally and it’s a head fake, so we go lower in 2023. Those indexes are the US main indicies and those are the futures prices.

Oh and by “test and fail” he means the S&P gets to 4081 (which is the 200 day moving average) and doesn’t get through that, comes back down and then the Santa Claus rally.

I should note, I’m just translating. This isn’t my view of things.

Thanks. I hesitate to ask because you do this for a living but what’s your take on 2023 in general? Seems like banks are expecting some tough economic times in 2023 at least for the first couple quarters.

[Slava]

I have to be pretty careful, but I’ll just say that I’m not as bearish as most when I comes to the markets. I still say odds of a recession are closer to 40%, which is quite high, but still avoidable. I guess I’m going to sound insane if I don’t at least give a couple justifications:

- unemployment figures are holding up well. Clearly the economy can/did handle the rate increases. Yes, there are layoffs at big name tech, but that’s part of a different concern. Instead, what’s evident is employers hoarding employees. It’s been difficult to hire, so rather than cutting positions a lot seem prepared to ride it out.

- this would be the most foreseen recession ever. That doesn’t happen, from a historical perspective. Generally, recessions are not foreseen and prepared for.

- in Canada and Alberta in particular, we’re not near a recession. Growth in Alberta is buoyed by energy and we haven’t been running too hot. Canada still has a significant chunk of our GDP attached to energy, so it seems unlikely that we dive to negative territory.

- there’s talk about demand destruction in energy. Well, a couple counter arguments. First, China is easing Covid restrictions. No guarantee that continues, but it would be a significant boost. Second, we’ve had 7 years of zero investment into exploration and production by energy companies. They’re sending out dividends and buying back shares (which is why the feds put in a tax to try to sway them to invest in hiring more and boosting green energy initiatives). We still have a supply issue, and as long as that’s there, demand destruction is less of a concern.

I’m not getting into the “we’re doomed and a recession is definitely coming” positions. I’ve heard them. Just this week I was at a thing with JP Morgan and that’s their base case, so it’s not just perma-bears saying these things. Those things are all over to read though.

And one point about the markets is that while “we” might feel the pain for a while and the recessionary forces are still in the economy (layoffs, cutbacks and things that make life difficult), the market emerges months ahead.

I guess I should add: this isn’t advice, and isn’t intended to be advice. It’s just my personal opinion. You should consult with a financial professional before you make these decisions and in reality shouldn’t be making investment decisions based on internet posts.

[Strange Brew]

I think the timing point is a good one. Even if the economy tips into recession by definition, the market is likely to recover well before the economy does. Which IMO mens if you have been in the market the last few months, these valuations will look awfully good in a few years time.

If you’re just looking to time the market and nothing else, well good luck to you. That usually catches up with most people eventually.

[opendoor]

I generally agree, but I don't know if this is necessarily correct:

Originally Posted by Slava

- this would be the most foreseen recession ever. That doesn’t happen, from a historical perspective. Generally, recessions are not foreseen and prepared for.

Every US recession in the last 50 years or so has had a yield curve inversion prior to it. And every time the yield curve has inverted in that time period, there was a recession relatively soon after. The timing depends on what maturity you're looking at (10Y minus 2Y, 10Y minus 3M, etc.), but generally once a yield curve inversion happens, there's a recession within 6-18 months. So it's a pretty reliable indicator of a likely recession, and we're currently in a yield curve inversion.

And you can see the same effect in the stock market. The S&P 500 normally peaks approximately 12-16 months before the beginning of a recession (right now we're 10 months into this bear market). And every bear market since WWII that has lasted as long as this one has ended up in a recession.

That said, it's possible that this time is an exception because of inflation and how quickly the Federal Funds rate is being raised. The two negative quarters of GDP growth in the US without any job losses was pretty unprecedented, so perhaps things will be different this time. But the conditions that are causing people to predict a recession in the near term are the same conditions that existed in every prior recession over the last 60-70 years. So if this one is more predicted than prior ones, I think that's merely a case of the evidence of what the economy looks like pre-recession being stronger than in the past, because we've learned from each subsequent recession.

[Enoch Root]

Originally Posted by manwiches

Lmao. If anybody actually believes this rally is the reversal, they're in for a ride awakening soon.

200dsma is above on all the 4 queens, and probably will test and reject hard, then fake breakout for the Santa Rally before maximum death for 2023.

I'm looking forward to the death. I'm a perma bear and love to short the market.

Sent from my SM-N975W using Tapatalk

Couldn't care less whether you're a bull or a bear, but overconfidence is always a foolish look

[Enoch Root]

One thing to remember about inverted yield curves is that they typically see the long end drop, in anticipation of the economy cooling. This time though, we have seen the entire curve rise, it's just that the short end has risen more, due to the quick and severe inflation jump.

In the last 2 years, the 10-year yield has risen by 3%, and it has more than doubled, year to date.

I am not suggesting we won't see a recession, but a mild recession is well baked in already. And the stock market is forward looking.

[manwiches]

Originally Posted by Slava

^ he’s saying that the indexes are all below the 200 day moving average. We’ll get a Santa Claus rally and it’s a head fake, so we go lower in 2023. Those indexes are the US main indicies and those are the futures prices.

Oh and by “test and fail” he means the S&P gets to 4081 (which is the 200 day moving average) and doesn’t get through that, comes back down and then the Santa Claus rally.

I should note, I’m just translating. This isn’t my view of things.

Exactly this! Look at the cycle in 2008. We are not in for a pleasant 2023. We are almost completing wave 4 of the Elliot wave now and will see more downside to complete a big wave 5 next year. If you look at previous recessions, they also show similar patterns and confluence.

Just my 2 cents of course. I've gone full bonds, conservative and cash in all my RSPs and retirements til late next year where I'll start DCA back in.



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[manwiches]

Originally Posted by Enoch Root

Couldn't care less whether you're a bull or a bear, but overconfidence is always a foolish look

For sure. I didn't mean to come across as over confident. But I am confident in my analysis. I've confirmed with a few other trading colleagues on their forecast as well, and they've come up with similar thoughts and cycles too. I just find it funny hearing CNN and all these other talking heads scream there is no recession and pass the notion like we've hit bottom. We haven't from what I can see. But that being said, should it actually be the bottom, well, I'll eat crow and go back to averaging back into my long term investments from bonds.

I day trade futures only with my trading account, so my long term outlook is unaffected with the intraday movement. But it does help with my conviction to hold through retracements if it the price action is following the current trend.

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[Enoch Root]

I learned a long time ago that technical analysis is always right - until it isn't.

[Slava]

Originally Posted by Enoch Root

I learned a long time ago that technical analysis is always right - until it isn't.

And that’s the issue with the yield curve inversion and predicting recessions. It works often, but it’s not a perfect predictor either, and then you have the wrinkle you mention above.

[Slava]

Originally Posted by opendoor

I generally agree, but I don't know if this is necessarily correct:



Every US recession in the last 50 years or so has had a yield curve inversion prior to it. And every time the yield curve has inverted in that time period, there was a recession relatively soon after. The timing depends on what maturity you're looking at (10Y minus 2Y, 10Y minus 3M, etc.), but generally once a yield curve inversion happens, there's a recession within 6-18 months. So it's a pretty reliable indicator of a likely recession, and we're currently in a yield curve inversion.

And you can see the same effect in the stock market. The S&P 500 normally peaks approximately 12-16 months before the beginning of a recession (right now we're 10 months into this bear market). And every bear market since WWII that has lasted as long as this one has ended up in a recession.

That said, it's possible that this time is an exception because of inflation and how quickly the Federal Funds rate is being raised. The two negative quarters of GDP growth in the US without any job losses was pretty unprecedented, so perhaps things will be different this time. But the conditions that are causing people to predict a recession in the near term are the same conditions that existed in every prior recession over the last 60-70 years. So if this one is more predicted than prior ones, I think that's merely a case of the evidence of what the economy looks like pre-recession being stronger than in the past, because we've learned from each subsequent recession.

I have a few misgivings with the inverted yield curve. Look at the last recession (Covid in 2020). While it’s true that the curve inverted ahead of that, it’s a case of pure correlation. It didn’t “predict” anything, and no one using that indicator alone would’ve guessed that would happen. But the overall indicator is reliable to a point, and it’s also given some false positives. I think there’s a joke that it’s predicted 7 of the last 5 recession or something like that?

And as far as recessions and seeing them coming, it’s tough. Yes, the market peak is ahead of the recession, but that’s not quite prediction. Plenty of people saw the market peak in 2007 (for example), and thought for sure we’d bounce back. In fact, in late 2007-2008 there was still a lot of talk that all the subprime issue was priced in and things were fine. Things were not fine and the extent of the subprime contagion was much worse than investors realized! So, while the market peak was a long time before the trough, it wasn’t a great indicator.

Part of the reason that market highs are so difficult to use for timing and projection is because the market (when things are going well) spends so much time in and around new highs. I think on average it’s about 25 days a year, which in terms of a percentage isn’t that high. But to use that as a gauge for possible recession, anyone of those could be a market peak.

And a 10 month bear is a consideration. But, one of these rallies will hold and the market will turn. Historically, this quarter (with midterms) is resoundingly positive. The 3rd year of the presidency is the best year for the market, and a great number of bears have seen the bottom in October. I don’t invest based on these things, but I do find them interesting. As I’m fond of reminding people, Mark Twain said “history doesn’t repeat, but it does rhyme”.

[V]

Originally Posted by Slava

…and a great number of bears have seen the bottom in October.

Like who? Every bearish analyst I’ve seen has stated the bear market is still firmly intact and there will be further movement to the downside, a lot of them calling for 3200 as the next move down. I haven’t seen a single bear call the bottom in October, let alone a great number of them.

My guess is the Fed hammers on the market in December, then a bad CPI print will come the next day and then Q1 earnings will be a gong show, and 2023 will be off to a miserable start. Just a guess,

[Slava]

Originally Posted by V

Like who? Every bearish analyst I’ve seen has stated the bear market is still firmly intact and there will be further movement to the downside, a lot of them calling for 3200 as the next move down. I haven’t seen a single bear call the bottom in October, let alone a great number of them.

My guess is the Fed hammers on the market in December, then a bad CPI print will come the next day and then Q1 earnings will be a gong show, and 2023 will be off to a miserable start. Just a guess,

That was saying a great number of bear markets have bottomed in October. Analysts are another matter. Some of them will never invest (at least according to their market punditry). The market could be at zero and I’d still expect some of them to find a bearish forecast (being facetious…)

[Madman]

Originally Posted by manwiches

Exactly this! Look at the cycle in 2008. We are not in for a pleasant 2023. We are almost completing wave 4 of the Elliot wave now and will see more downside to complete a big wave 5 next year. If you look at previous recessions, they also show similar patterns and confluence.

Someone tell me there's a Laffer Curve in there somewhere.

[Strange Brew]

Chapek out, Iger back as Disney CEO is a surprising turn of events. Might give the stock a little pop IdK but not many CEO’s more respected than Iger.

[#-3]

I do think a lot of those dig She Hulk was taking at SFX budgets were aimed at Chapek, news had generally been that he wanted in person entertainment / experience to out pace multi-media investments.

There are some big media brands that could feel a little snubbed that that strategic direction, ABC, ESPN, Marvel, Star Wars, Animation, WD Studios, Pixar, Nation Geographic, Searchlight, Blue Sky. If every top guy at those subsidiaries starts throwing stones at you, you'd better be pretty tough.

[bizaro86]

Originally Posted by #-3

I do think a lot of those dig She Hulk was taking at SFX budgets were aimed at Chapek, news had generally been that he wanted in person entertainment / experience to out pace multi-media investments.

There are some big media brands that could feel a little snubbed that that strategic direction, ABC, ESPN, Marvel, Star Wars, Animation, WD Studios, Pixar, Nation Geographic, Searchlight, Blue Sky. If every top guy at those subsidiaries starts throwing stones at you, you'd better be pretty tough.

The studio heads also were effectively demoted under Chapelle, where the power to green light streaming programs went to the streaming head, not the studio heads. That's a big loss of power and prestige for people who care a lot about power and prestige.

When you're having lunch with an a-lister or their agent and have to say, "I'll check with so-and-so and get back to you" next time they try and book that lunch with so-and-so not you.