Blog Comments

  1. JTH's Avatar
    Those pesky 3rd Friday Options Expirations always seem to sneak up on me....
  2. JTH's Avatar
    Thanks Tom!

    The USD to Polish Zloty exchange rate just hit a 22-Month low...

    TradingView Chart — TradingView
  3. Whipsaw's Avatar
    Did somebody say Whipsaw?
  4. luke869's Avatar
    yes its always right.
  5. tsptalk's Avatar
    You've got it right. If we do see a recessionary period, the Fed will pause or even eventually lower rates and that would be good for the F-fund. That's why they say a diversified account with stocks and bonds is good because bonds help during the weaker economic part of the business cycle.

    But the debt ceiling increases the government's debt, which means they need to issue more bonds, and whenever supply is increased, prices come down (yields up.)

    The price movement of the bond market is confusing to me as well. It felt like the bond market was selling the rumor, and now buying the news? I believe bond traders / investors are much more savvy and they tend to react to things in advance of the news, so the reaction in bonds when the news come out seems off.

    I probably didn't answer your question?
  6. cmalinowski's Avatar
    The increased debt ceiling was bearish for bonds creating that long losing streak in mid-May, so perhaps this is experiencing a buy the news reaction to the potential deal?
    Wasn't it the lack of a deal that kept sending the F-Fund down, and then once the deal was struck it sent the F fund up? I thought an increase in the debt ceiling was good news for F fund and bonds, but bonds and the F fund confuse me... a lot I'm sitting in F right now, so I'd welcome any input and explanation of F fund and the debt ceiling. Although another rate increase wouldn't be good as I understand it. TNX would go up and that would be bad for bonds and the F fund. But if that precipitous drop in a rate hike expectations based on the fed comments late y'day is to be believed (we all know that's not necessarily the case), that would also be good.

    Thanks.
  7. tsptalk's Avatar
    I wouldn't say I was distinguishing between the two, meaning a FOMO rally is a real rally that caught even money managers by surprise, and they are more worried about missing out than Joe Sixpack since their returns are their selling point. So this was institutional buying as well as bears turning bullish, etc.

    Technical analysis is technical analysis and a breakout is a breakout no matter the circumstances.

    It's the explosiveness that makes it feel FOMO.
  8. FireWeatherMet's Avatar
    Rhetorical question...is this a FOMO Rally, or really a classic breakout, where the market, after dropping 20-30% (40% S Fund) over 12 months, is now 4 months from its low, and is rising in a series of higher highs and higher lows, and busting thru 2 big barriers, the long term downward trendline & 200 EMA. Now that 50 day EMA crossed 200 EMA on some indices, and approaching on others. All of this comes on good news on 2 major fronts that took the market down in the first place, Concerns on 1) Inflation and 2)Recession are dwindling rapidly, esp with todays new jobs report of 500,000 new jobs.

    So wondering if "FOMO" might not be the right name for this rally, its likely these indicators are triggering the "Big Money" to start pouring into stocks more aggressively, including those institutions that have been positioned very defensively the past year. This upward channel seems very different from the sharp FOMO rallies of the past year.
  9. tsptalk's Avatar
    Right, that was basically the point. The flag has gotten so long that it doesn't look like a flag anymore.

  10. radarvector's Avatar
    SPX bear flag, really? Since when are flags longer than the flagpole? That ship has sailed, we are in a confirmed bull channel from my perspective~
  11. flalaw97's Avatar
    So is this one of the only days of the year where we don't have to worry about the second half of the trading day messing up our IFT decision? If we put in our IFT at 1130, the market only has 30 minutes to do something different?
  12. FireWeatherMet's Avatar
    Nice info on the VIX, thanks Tom.
  13. tsptalk's Avatar
    Great move!
  14. JTH's Avatar
    Pulled out of BND Bonds at 84.80 and broke even. I remember at the time hoping I wouldn't regret that decision. Now it's in the high 60s, so that's maybe the single best decision I've made this past year.
  15. JTH's Avatar
    Thanks Tom, as always great analysis!
  16. FireWeatherMet's Avatar
    Excellent analogy of the initial 2008 downturn...I was going to add that to my Account Talk, but I am drinking a bit too much wine this evening...will maybe try tomorrow.
    All I was going to say was that the initial 2008 drop was closer to 20% while this years was over 30%.

    And there were a few very big reasons we took another turn downward in July 2008...namely Fannie and Freddie collapsing.
    If that wouldn't have happened...and the banks weren't about to fail...maybe we would have went back up to new highs in late 2008 instead of free-falling?
  17. FireWeatherMet's Avatar
    Nice summary.

    I agreed with the "Not Yet". However after todays total bloodbath, it seemed very much like true capitulation.
    C down near 7% in just 2 days.
    S down near 8.5% in just 2 days

    A very oversold short term position exists....and if the FED sticks to the 0.5% rate hike for now, it could serve as a short term turbo-powered relief rally that could erase half these 2 day losses. I put 1 foot in the water today, shifting half out of G into the C, will wait for the first big up day to throw the other 'foot" in. That turn-around day could be this Thu, or it could be tomorrow, or next week, who knows,

    But nothing goes down forever.
  18. radarvector's Avatar
    You are exactly right! I don't see this as whining, you're just stating facts. I got burned in 2008 when I placed a trade one morning while the Dow was down over 1000 points. When the day ended it had recovered 75 percent of those losses costing me a huge potential gain. 750 Dow points may not seem like much now but back in 2008 it was very large percentage of the index. When I retired I vowed not to be constrained by the archaic TSP rules and I moved 2/3rds of my TSP into my self directed IRA at Vanguard. I have been very happy with that decision. I left the rest in TSP because the G fund was paying significantly higher than the money market accounts at Vanguard. In my opinion the G fund is the only reason to keep any funds in TSP after retirement and with it paying a measly 1% return, even that reasoning is sketchy.
  19. tsptalk's Avatar
    That's certainly part of it, but I think program trading is more prevalent. They may or may not be money managers, but trading conglomerates, if you will.
  20. TommyIV's Avatar
    Back when I was getting interested in the stock market in the early to mid-1990's we had a very strong bull market. Not unlike the action of recent years. Strong bull markets tend to do that, as we saw last year with the Robinhood crowd who turned into day traders during the COVID crash rebound. But back in the 90's, even though the trend was clearly up, we had serious pullbacks and corrections all the time. Market timers had a lot more t
    o work with that the 2 to 5% pullbacks we've seen over the last 18 months.

    Between 1996 and the peak of 2000 there were probably more than 8 corrections of 10% or more in less than five years. Then the volatility started during the dot com bubble bursting so it was a trader's market. It's never easy but there were certainly more opportunities.




    It may come back again someday and the insta-dip buyers will get burned, but for now, they are having a field day.


    We may talked about this before, but do you think there is a significant effect, especially on dips today, from retail investors? Or are their trades overshadowed by big money moves? I'm talking effect on entire indices not meme stocks. If so that may account for the shorter dips now that Joe can trade from his phone in line at Arby's.
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