Thread: tsptalk's Market Talk

https://www.thebalance.com/dollar-de...llapse-3306090

Thanks. I looked at some long-term charts of the dollar vs. the price of the 10-year Treasury, and while there were many times that they moved in opposite directions (yields and dollar moved in same direction), there were also periods where they moved together (yields and the dollar moved counter) as we're seeing now.

The Volatility Index has pulled back to the 200-day MA. Was that all the volatility that we'll get, as we've seen in the past, or will the moving average hold here?

Dalio has interesting dual message. He says you'll feel stupid if you're holding cash in this environment - UNLESS the Fed gets aggressive. Coincidentally that's what I talked about in today's market commentary...

https://www.cnbc.com/2018/01/23/ray-...ty-stupid.html

Dalio explained that the Federal Reserve's potential rate hikes are the key risk for the market. He said if the central bank increased interest rates by 100 to 125 basis points, asset prices will drop.

"You can't have a significant rise in interest rates without knocking over the whole asset markets," he said. The "Fed is going to determine what the level of real interest rates are."

http://www.tsptalk.com/mb/blogs/tspt...-shutdown.html

What could derail this market? It will probably be something unexpected, so obviously it would be tough to prepare for. There is an FOMC meeting next week and with the economy showing definite signs of growth, I suppose they could raise rates 0.50% instead of the anticipated 0.25% and that could throw a wrench into things, but their more recent history has been to be as accommodating as possible to the markets, even when they are raising rates.

Looks like it held as a ceiling at the beginning of the year, but other than that it gets sliced through pretty often.

Originally Posted by tsptalk

The Volatility Index has pulled back to the 200-day MA. Was that all the volatility that we'll get, as we've seen in the past, or will the moving average hold here?

Two interesting things today, besides the negative reversal so far in stocks...

The dollar (sorry, repost from another thread) gapped down yet again...




And copper tanked this morning - not something we might expect with the dollar down so much. So, this is an unusual setup.

Originally Posted by tsptalk

Two interesting things today, besides the negative reversal so far in stocks...

The dollar (sorry, repost from another thread) gapped down yet again...

And copper tanked this morning - not something we might expect with the dollar down so much. So, this is an unusual setup.

I see the problem. That chart of copper in the prior post was not updated for today yet. Copper actually rallied almost 4% today with the dollar dropping. That makes more sense. Sorry for any confusion.

Volatility moving higher...

What does the market do the day/week after the Dow drops 500+ in one day? (on average, it goes up)

https://www.cnbc.com/2018/02/02/the-...pens-next.html

Originally Posted by bmneveu

What does the market do the day/week after the Dow drops 500+ in one day? (on average, it goes up)

https://www.cnbc.com/2018/02/02/the-...pens-next.html

I almost got out today then I remembered my rule to never bail on a huge down day...the next day is almost always a better choice....

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Originally Posted by bmneveu

What does the market do the day/week after the Dow drops 500+ in one day? (on average, it goes up)

One thing may be different this time... 500-points now is a lot different than 500-points going back 25 years. I wish they would have listed the 17 times because going back 20 years (let's say 1997) the Dow was in the 7000's and 500 points was obviously much more significant.