There's been several comments here from some of you about how
the market is like 1987, it's going back to the highs etc.
here's the thing though guys - look at a chart of 1987 crash -
yes the market went back to the highs, but it took 13 months over a
year to do so!
We are 1 month off the bottom, not even 1 month, just over 3
weeks. If you look that the Dow chart, the dotted vertical
line represents where we are now. So just looking at this from a
very simplistic standpoint does it look like the SPX easily goes
back to new highs right now?
The comments were also made that the market is trading mostly on
psychology. Well using that premise, think about it, the reason why
it took 13 months for the Dow and SPX to go back to the highs from
1987 crash is because the crash caused severe emotional damage that
took a year to heal. The same could be said now, that crash
caused a lot of emotional damage, so going right back to the highs
in 1 or 2 months do you think it would be that easy? Again
the thing I will point out that is differently now is that we have
all this trillions upon trillions of dollars in the system - this
artficialness to the market. This liquidity that is there on
tap to go right into the market that wasn't there in 1987.
However when some of you made the 'this is like 1987'
comments - I think you didn't look at that chart, the market didn't
just go back to the highs right away, it took 13 months to do so.
And currently we are less than 1 month off the bottom
I agree about the liquidity provided (multiple trillions). Fed
is stating clearly that it wants ALL asset PRICES higher - sooner
the better. Having said that, you may be right that the market
needs time to digest earnings (or the lack thereof) and any news on
the drug development, etc. before it challenges the previous
highs.
Posted by kevindeng0727 on 17th of Apr 2020 at 10:42 am
Also the 1987 bear market had no recession in economy. Those
bear markets without recession tend to recover much faster on
average, but still, there was a higher low a couple of months after
the initial 1987 low.
Agree MAtt .... but from investing standpoint i would love to
see my money go up 30% in 2 years assumung 1988 recovery time
frame...Next important thng - we are technically inn a recession
because of abrupt shut down but thats going to change once
businesses reopen / vaccines come and people start being more
alert
never mind all the trillions into the system, I've looked at 100
plus years of charts. After a big trending move, which was
down - quite simply you are due for a long period of
consolidations. Not another big trending move. This is why I
think we are consolidation patterns for a while, not a straight up
V move.
but again like Steve said, let's discuss on weekend. I'll
make that a sticky post after the close
Guys save the bigger picture comments for the weekend - let's
focus on making money today. It's been a GREAT FADE off the
open. If you want a good bigger picture guide look at the 20
month MA which capped the rallies in 2001 and 2008 before another
move lower. Currently that level is just below 2900 so that
is one guide post.
BIGGER PICTURE - Yes i agree we should trade what is in
front of us but we should
ALSOfocus on long term investment/wealth where we can save
ourselves from the stress of day to day trading. No one can catch
all the move but look at SPY or QQQ where they have come in 10
years or 20 years .... now thats wealth. You guys have so many
valuable tools you can provide for investors not just traders
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Comparision to 1987
Posted by matt on 17th of Apr 2020 at 10:36 am
There's been several comments here from some of you about how the market is like 1987, it's going back to the highs etc.
here's the thing though guys - look at a chart of 1987 crash - yes the market went back to the highs, but it took 13 months over a year to do so!
We are 1 month off the bottom, not even 1 month, just over 3 weeks. If you look that the Dow chart, the dotted vertical line represents where we are now. So just looking at this from a very simplistic standpoint does it look like the SPX easily goes back to new highs right now?
The comments were also made that the market is trading mostly on psychology. Well using that premise, think about it, the reason why it took 13 months for the Dow and SPX to go back to the highs from 1987 crash is because the crash caused severe emotional damage that took a year to heal. The same could be said now, that crash caused a lot of emotional damage, so going right back to the highs in 1 or 2 months do you think it would be that easy? Again the thing I will point out that is differently now is that we have all this trillions upon trillions of dollars in the system - this artficialness to the market. This liquidity that is there on tap to go right into the market that wasn't there in 1987. However when some of you made the 'this is like 1987' comments - I think you didn't look at that chart, the market didn't just go back to the highs right away, it took 13 months to do so. And currently we are less than 1 month off the bottom
I agree about the liquidity
Posted by coolhat on 17th of Apr 2020 at 10:45 am
I agree about the liquidity provided (multiple trillions). Fed is stating clearly that it wants ALL asset PRICES higher - sooner the better. Having said that, you may be right that the market needs time to digest earnings (or the lack thereof) and any news on the drug development, etc. before it challenges the previous highs.
Also the 1987 bear market
Posted by kevindeng0727 on 17th of Apr 2020 at 10:42 am
Also the 1987 bear market had no recession in economy. Those bear markets without recession tend to recover much faster on average, but still, there was a higher low a couple of months after the initial 1987 low.
Agree MAtt .... but from
Posted by arun on 17th of Apr 2020 at 10:46 am
Agree MAtt .... but from investing standpoint i would love to see my money go up 30% in 2 years assumung 1988 recovery time frame...Next important thng - we are technically inn a recession because of abrupt shut down but thats going to change once businesses reopen / vaccines come and people start being more alert
never mind all the trillions
Posted by matt on 17th of Apr 2020 at 10:48 am
never mind all the trillions into the system, I've looked at 100 plus years of charts. After a big trending move, which was down - quite simply you are due for a long period of consolidations. Not another big trending move. This is why I think we are consolidation patterns for a while, not a straight up V move.
but again like Steve said, let's discuss on weekend. I'll make that a sticky post after the close
Guys save the bigger picture
Posted by steve on 17th of Apr 2020 at 10:47 am
Guys save the bigger picture comments for the weekend - let's focus on making money today. It's been a GREAT FADE off the open. If you want a good bigger picture guide look at the 20 month MA which capped the rallies in 2001 and 2008 before another move lower. Currently that level is just below 2900 so that is one guide post.
BIGGER PICTURE - Yes i
Posted by arun on 17th of Apr 2020 at 11:04 am
BIGGER PICTURE - Yes i agree we should trade what is in front of us but we should ALSO focus on long term investment/wealth where we can save ourselves from the stress of day to day trading. No one can catch all the move but look at SPY or QQQ where they have come in 10 years or 20 years .... now thats wealth. You guys have so many valuable tools you can provide for investors not just traders