How Far Will The Market Fall?

[OmegaTrader]

I do. Do you?

All of those magical CB programs and they couldn't even get to the past highs that were achieved with no QQE, no ETF, no ZIRP, no nothing.

All of those magical programs and still underperformed the global index, an underperformance that only accelerated with ETF purchases and QQE

View attachment 101807

No inflation, no growth, no magical stock "floor".

Almost as if Central Banks aren't even relevant.

buying began 2010 buying accelerated 2013
price only gains
2020 -18.04%
2019 18.20%
2018 -12.08%
2017 19.10%
2016 0.42%
2015 9.07%
2014 7.12%
2013 56.72%
2012 22.94%
2011 -17.34%
2010 -3.01%

10,000 to 18,000 ???

what am i missing ? isn't that 180% gain

 

[InsvestoBoy]

what am i missing ? isn't that 180% gain

Just look at the chart.

All that buying, no special performance vs other markets with no ETF buying or QQE or ZIRP or anything. If anything, underperformance.

 

[moXJO]

Here's the chart of a market where the Central Bank is actively buying equity ETFs for years now, to the point where they are a Top 10 holder of many companies via ETFs.

Not to mention extremey low rates for a long time, QE, QQE, yield curve control, ZIRP, NIRP, you name it.

View attachment 101805

It's almost as if none of that matters at all.

So you don't think dow will jump/hold because of it?
Surely confidence is a factor?

 

[OmegaTrader]

Just look at the chart.

All that buying, no special performance vs other markets with no ETF buying or QQE or ZIRP or anything. If anything, underperformance.

In your words:
No inflation, no growth,

But up 180% what is driving the growth then?

Could it be that 80% of the market is owned by the BOJ and being consistently bought up??

 

[InsvestoBoy]

In your words:
No inflation, no growth,

But up 180% what is driving the growth then?

When I say growth I mean economic, GDP growth.

Could it be that 80% of the market is owned by the BOJ and being consistently bought up??

If it's BoJ buying that is driving the Nikkei up, then why were all other markets up in the same timeframe with no CB buying or QQE? Why were those markets up more than the Japanese market when priced in the same currency?

So you don't think dow will jump/hold because of it?
Surely confidence is a factor?

Because of what? Speculation about Fed buying stocks that hasn't happened?

Yes! Sentiment is a huge factor. If market participants think the Fed has a floor then they buy and the market goes up, sure. But don't mix up what drove that, namely, sentiment, not the Fed.

Here's a link from a week ago about the kind of things that might drive a rally
https://heisenbergreport.com/2020/0...novic-nomuras-mcelligott-look-back-and-ahead/

or this note from JPM on Friday on similar topics



You'll note that in none of this discussion is gibberish about the Fed.

 

[moXJO]

Because of what? Speculation about Fed buying stocks that hasn't happened?

Yes! Sentiment is a huge factor. If market participants think the Fed has a floor then they buy and the market goes up, sure. But don't mix up what drove that, namely, sentiment, not the Fed.

That's all I care about. All good.

 

[InsvestoBoy]

That's all I care about. All good.

The reasons I think it could rally from here, aside from the stuff mentioned in those links:



Breadth as measured by NYSI has turned up from an extreme oversold. Who knows whether it'll make it up to a decent value +500 that could really indicate longer term bullishness. Maybe it'll only make it to 0 or -200, who knows. All I know is we are a far way off any kind of retracement on this chart, so there is room to go up.

 

[OmegaTrader]

When I say growth I mean economic, GDP growth.



If it's BoJ buying that is driving the Nikkei up, then why were all other markets up in the same timeframe with no CB buying or QQE? Why were those markets up more than the Japanese market when priced in the same currency?



Because of what? Speculation about Fed buying stocks that hasn't happened?

Yes! Sentiment is a huge factor. If market participants think the Fed has a floor then they buy and the market goes up, sure. But don't mix up what drove that, namely, sentiment, not the Fed.

Here's a link from a week ago about the kind of things that might drive a rally
https://heisenbergreport.com/2020/0...novic-nomuras-mcelligott-look-back-and-ahead/

or this note from JPM on Friday on similar topics



You'll note that in none of this discussion is gibberish about the Fed.

If the fed announces tomorrow that it will buy etfs then it will rise, that is all that matters. If it is sentiment or the actual buying stopping market panic and forced selling.

 

[InsvestoBoy]

If the fed announces tomorrow that it will buy etfs then it will rise, that is all that matters. If it is sentiment or the actual buying stopping market panic and forced selling.

This is demonstrably wrong, just by looking at the Nikkei chart.

Japanese equity investors didn't bid equities any more or less over the course of several years simply because the BoJ announced they were buying or even because they bought!

There is no rule which says if the Fed announces they will buy ETFs then markets will rise, just exactly like there was no rise when the Fed announced QE-Infinity and rate cuts to 0% and instead the market went lock limit down.

Just because a CB can sometimes drive sentiment, doesn't mean that they will. Sentiment is sentiment, Central Banks aren't sentiment.

 

[InsvestoBoy]

Fed cuts rates by ONE HUNDRED BPS to ZERO.

Announces return to QE.

Before market open to try and create a short squeeze.

Dow drops 20%.

It's still lower than where it was when the announcement came out.



So tell me again why you think the market has to rally just because the goobers at the Fed say something stupid?

 

[OmegaTrader]

This is demonstrably wrong, just by looking at the Nikkei chart.

Japanese equity investors didn't bid equities any more or less over the course of several years simply because the BoJ announced they were buying or even because they bought!

There is no rule which says if the Fed announces they will buy ETFs then markets will rise, just exactly like there was no rise when the Fed announced QE-Infinity and rate cuts to 0% and instead the market went lock limit down.

Just because a CB can sometimes drive sentiment, doesn't mean that they will. Sentiment is sentiment, Central Banks aren't sentiment.

You think one thing I think another
only time will tell if it actually happens.
it may not even be announced.
I don't care about being right I just am trying to game a scenario that could occur to improve the chances of making money. Other factors might overwhelm central banks buying.
If i could make 180% every 8 years I will be happy.

It just shows that the anything it takes is a literal statement by central banks.

 

[qldfrog]

You think one thing I think another
only time will tell if it actually happens.
it may not even be announced.
I don't care about being right I just am trying to game a scenario that could occur to improve the chances of making money. Other factors might overwhelm central banks buying.
If i could make 180% every 8 years I will be happy.

It just shows that the anything it takes is a literal statement by central banks.

By now the Japanese taxpayers own most of their local sharemarket, the socialisation of Japan

 

[Country Lad]

The ASX spent a full decade getting back to 1987 levels and more recently it took 12 years to regain the 2007 high. For that matter the high of January 1970 wasn't reached again until September 1979 and the 1937 high wasn't regained until 1945 and the 1951 high wasn't seen again until 1958 so there's plenty of examples of the market taking close to a decade to recover.

Current crash looks so steep, somewhat like the 1987 flash crash. I would like to go all the way back to 1929 crash and earlier

As someone who was trading during the 1987, 1991 and 1992 falls, (not 1929 I'm afraid @aus_trader) can I say that trying to relate the current falls and particularly how the market will recover with those periods is simply not worth the effort.

The conditions then were totally different, comparatively few companies on the ASX, nowhere near the spekkies to play with, and importantly, in 1987, no internet to get data (imagine that kiddies) and 1991 and 1992 no or very basic internet price data. It is like comparing separate and different worlds.

My charting was done with pencil and graph paper and trades were done through real brokers. Now we have instant trades, high frequency trading, myriads of differing professional opinions at the click of a mouse, forums driven by the red cordial brigade, minute by minute price discovery, instant access to market information and announcements……..and any other of the numerous differences between then & now.

In my view every downturn and recovery has been different and this one will not resemble any other.

 

[basilio]

As someone who was trading during the 1987, 1991 and 1992 falls, (not 1929 I'm afraid @aus_trader) can I say that trying to relate the current falls and particularly how the market will recover with those periods is simply not worth the effort.

The conditions then were totally different, comparatively few companies on the ASX, nowhere near the spekkies to play with, and importantly, in 1987, no internet to get data (imagine that kiddies) and 1991 and 1992 no or very basic internet price data. It is like comparing separate and different worlds.

My charting was done with pencil and graph paper and trades were done through real brokers. Now we have instant trades, high frequency trading, myriads of differing professional opinions at the click of a mouse, forums driven by the red cordial brigade, minute by minute price discovery, instant access to market information and announcements……..and any other of the numerous differences between then & now.

In my view every downturn and recovery has been different and this one will not resemble any other.

Plus 1. I think this will be quite a different beast. Not sure how but there are far too many factors involved to believe there will be a "traditional" response.

 

[Smurf1976]

Plus 1. I think this will be quite a different beast. Not sure how but there are far too many factors involved to believe there will be a "traditional" response.

A particular issue is the sheer speed of events unfolding.

This thread started 20 days ago and at this point it's fair to say that in the context of current events that's an eternity. Things are happening in the space of 24 hours that under more normal circumstances would take a year or more to unfold.

 

[Triathlete]

My current thoughts are that the market still has further to fall,...I am looking for a 3 wave move down to complete the Elliott wave cycle.So we should see a rally up into the Wave 'B' which is sort of taking place now with prices moving higher but we need to look for the next move down after that to complete wave "C"....before we move back into a sustained upward move,the last financial crisis took about 2 years to complete the same so will be interesting to see how this one plays out.....Anyone else have some thoughts on this....???

 

[qldfrog]

My current thoughts are that the market still has further to fall,...I am looking for a 3 wave move down to complete the Elliott wave cycle.So we should see a rally up into the Wave 'B' which is sort of taking place now with prices moving higher but we need to look for the next move down after that to complete wave "C"....before we move back into a sustained upward move,the last financial crisis took about 2 years to complete the same so will be interesting to see how this one plays out.....Anyone else have some thoughts on this....???
View attachment 101828

Not an Elliot guru but yes i expect a little bounce back, a good opportunity to sell these bargains we got last 2 weeks
Then a deeper fall when both death toll and economic carnage realisation sinks in both here and in the states.
Potentially even start of inflation to ward end of year next year
Overall sell some profit in the next 2 months, wait by the bottom around us election time..hard to time..as noted everything going very very fast so bounce could very well end quickly.

 

[hja]

When in their lives will the Coronial (Covidian?) generation get to see these market levels again?

 

[basilio]

Not an Elliot guru but yes i expect a little bounce back, a good opportunity to sell these bargains we got last 2 weeks
Then a deeper fall when both death toll and economic carnage realisation sinks in both here and in the states.
Potentially even start of inflation to ward end of year next year
Overall sell some profit in the next 2 months, wait by the bottom around us election time..hard to time..as noted everything going very very fast so bounce could very well end quickly.

Plus 1. I think there will have to be a very big rethinking of how we manage our economy and society as this crisis unfolds.
I just can't see how our current systems will work.

 

[gartley]

Maybe we should change the name of this thread in the short term to: How far will the market go up?
For now expecting this rally to test the 11 year trendline @ approx 5850 which originates from GFC low. The Hurst Price Projection analysis suggests approximately simliar within 26points (5876)