Australian (ASX) Stock Market Forum

The official "ASX is tanking!" panic thread

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ducati916 said:
I agree that we may indeed see some relief/rally in SPY:

View attachment 141999

However the VIX has not been moving sideways. It is reproducing the 2007/2008 pattern:

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A rally in SPY with a dip in VIX would be entirely consistent technically.

Until the macro fundamentals are resolved, it is an ever worsening bear market.

View attachment 142002View attachment 142003


The interest on $30.5T at 0.005% = $0.1525T


GDP = $24T. Tax revenue = $3.84T


At 10% FFR, the interest (that required to tame inflation at 8.5%) = $3.05T. So essentially the interest required to pay the debt, consumes 79% of tax revenues.


What about everything else?


The Fed would need to monetise everything else. What happens to inflation? Is it tamed at 10% or does it need to rise further...which simply increases the amount required from the Fed to be monetised.


The debt is now simply so extreme, it cannot be paid unless GDP and tax take increases SUBSTANTIALLY. The problem is that FFR of 10% induces a major recession/depression and GDP collapses.

The rally, if it materialises, is a last opportunity to exit.

The problem with technicals in a bear market, is that they are far less reliable than they are in a bull market. So while I agree the technicals look ready for a really major bounce, maybe not.

View attachment 142005

jog on
duc
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Some of that is just beyond me Mr Duc, but two points:

Firstly the Debt from Stimulus I assume you're talking about. Can't they just wipe that and take it back over time.

Secondly, the Vix pattern. How much meaning has that? The Vix by itself is a rather "shut the gate after the Horse has bolted" indicator.

Supply and Inflation issues causing Consumer and Business concern, along with Building and Housing, but Employment and Wages strong resulting in Retail spending still strong, thus Production is too.
 
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Mohammed Hazabig'un said:
Firstly the Debt from Stimulus I assume you're talking about. Can't they just wipe that and take it back over time.
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yes they can , the current regime is trying to 'forgive' ( fully or partially ) Education Debt ( which translates to stop taxing the student pass the expense to tax-payers)

now i am NOT saying that a good policy , just one policy that is being proposed currently in the US

they have already defaulted ( delayed indefinitely ) on the gold commitment ( to give one ounce of gold in exchange for $US 35 ) but also deriving the benefit the excessively created currency

given the extent of US debt only the most extreme optimist would think it will be repaid in a timely manner
 
My last Post refers to the U.S. but the same applies to Australia:

Aussie Firms Up on Strong Jobs Data
Australia Jobless Rate Stays at Record Low
Australia Q1 Wage Prices Rise the Most in Over 3 Years
RBA Sees More Rate Hikes: May Meeting Minutes
Australia New Home Sales Fall 1.2% MoM in April
Australia Private House Approvals Down 3% MoM
Australia Building Permits Drop 18.5% MoM
Australia Consumer Mood Plunges in May
Australia Retail Sales Grow for 3rd Month.
 
Mohammed Hazabig'un said:
Some of that is just beyond me Mr Duc, but two points:

Firstly the Debt from Stimulus I assume you're talking about. Can't they just wipe that and take it back over time.

Secondly, the Vix pattern. How much meaning has that? The Vix by itself is a rather "shut the gate after the Horse has bolted" indicator.

Supply and Inflation issues causing Consumer and Business concern, along with Building and Housing, but Employment and Wages strong resulting in Retail spending still strong, thus Production is too.
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Evening,

Re. the QE, they will take that back via QT at about 1.3T/annum. That is a huge issue, bigger than rising rates. Already the dollar is trending higher, ie. there is dollar demand. This is because the US consumer has already slowed their demand, which is import driven (China). US inventories are way up...look at TGT and WMT, very high (unsold) inventories.

A slowdown in US consumer spending (imports) means less dollars being supplied. QT to the tune of $1.3T/annum is going to create a liquidity crisis that will start in Asia/Europe and spread to the US. Add to that the leverage of derivative contracts (SWAPS) which are unmargined and dark and counter-party risk cannot be managed.

The VIX, like any price, is trending higher. In 2007/08 there was a very similar pattern building, followed by an explosion higher. That explosion is a liquidity event. EVERYTHING is sold in a mad dash for cash.

The 'Powell Put' is far lower than many imagine. It is not a 20% decline. It will be closer to a 40% decline in SPY before the Fed move to rein in FFR rises and reverse QT back to QE.

Enjoy.

jog on
duc
 
ducati916 said:
Evening,

Re. the QE, they will take that back via QT at about 1.3T/annum. That is a huge issue, bigger than rising rates. Already the dollar is trending higher, ie. there is dollar demand. This is because the US consumer has already slowed their demand, which is import driven (China). US inventories are way up...look at TGT and WMT, very high (unsold) inventories.

A slowdown in US consumer spending (imports) means less dollars being supplied. QT to the tune of $1.3T/annum is going to create a liquidity crisis that will start in Asia/Europe and spread to the US. Add to that the leverage of derivative contracts (SWAPS) which are unmargined and dark and counter-party risk cannot be managed.

The VIX, like any price, is trending higher. In 2007/08 there was a very similar pattern building, followed by an explosion higher. That explosion is a liquidity event. EVERYTHING is sold in a mad dash for cash.

The 'Powell Put' is far lower than many imagine. It is not a 20% decline. It will be closer to a 40% decline in SPY before the Fed move to rein in FFR rises and reverse QT back to QE.

Enjoy.

jog on
duc
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Do you see that at 40% from peak or 40% from now Mr Duc?
 
Mohammed Hazabig'un said:
Both the XJO and AXVI have been falling all day. The Hang Seng to blame for the XJO?
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It seems like this could be the case. The move lower really began to take shape around the open in China as COVID cases in Beijing sparked fresh lockdown concerns.

All trading carries risk, but it should be interesting to see how XJO continues to interact with 7200, with today marking the second rejection as it approached key level in less than a week.
 
It's all short-term stuff, which is fine if you're trading short term.

Sometime this year I am punting that we will see a five on the front of the XJO, perhaps a four.

If not this year, then next year.

If not next year, then the year after.

How far can you kick a can?
 
Mohammed Hazabig'un said:
Short term upswing, dependent on China, then the chickens will gradually come home to roost second half of 2022 into 2023.
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My view,
we still have BTD, not capitulated yet players plus super always in:
so we will see a BTD, get higher indexes then FOMO, but another rate raise in the us next month..slow rise,confusion then capitulation sliw then fast until feds stop qt
I have kept my shorts for mid july.

I tend to be always too early and missed the dip by less then a month with option expired in april.
->This time i also took September options(short)
And will keep trading long for another months then liquidate hopefully at a profit.my system will be doing their work but maybe on reduced size, i am just reinstating full size today.
Pray for me
 
wayneL said:
It's all short-term stuff, which is fine if you're trading short term.

Sometime this year I am punting that we will see a five on the front of the XJO, perhaps a four.

If not this year, then next year.

If not next year, then the year after.

How far can you kick a can?
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about nine years longer than i thought they could and are still going ,

i can't afford to wait , i suspect some banks will need to bail-in ( if only one or two ) or need more bail-outs if several are liable to fail
 
Jeez guys, just segregate the portfolio, into long term keep for dividends, medium term keep for profit, short term keep to flip when it hits the sell mark.
Then have a comfortable nest egg incase it all goes to $hit, life is so much easier, I'm not convinced that running numbers up and down, buy now, sell now, then re buy now is for everyone.
It might suit my wife she is OCD. :roflmao:
But having said that, there are some very learned guys and ladies on here, who have enlightened me to some great buys and I'm forever grateful.
My SMSF always sits with at least 30% cash, the rest fluctuates, normally 50% blue chip div paying and 20% spec flip for profit.
At the end of the day your super or investments have to replace your income, or else you need to focus on the pension, the first thing is to make sure you are not having to pay rent because that is a variable that you have no control over. :2twocents
I guess I'm giving these pearls of wisdom, because I'm just about over it, too old to care and running out of enthusiasm.
 
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sptrawler said:
Jeez guys, just segregate the portfolio, into long term keep for dividends, medium term keep for profit, short term keep to flip when it hits the sell mark.
Then have a comfortable nest egg incase it all goes to $hit, life is so much easier, I'm not convinced that running numbers up and down, buy now, sell now, then re buy now is for everyone.
It might suit my wife she is OCD. :roflmao:
But having said that, there are some very learned guys and ladies on here, who have enlightened me to some great buys and I'm forever grateful.
My SMSF always sits with at least 30% cash, the rest fluctuates, normally 50% blue chip div paying and 20% spec flip for profit.
At the end of the day your super or investments have to replace your income, or else you need to focus on the pension, the first thing is to make sure you are not having to pay rent because that is a variable that you have no control over. :2twocents
I guess I'm giving these pearls of wisdom, because I'm just about over it, too old to care and running out of enthusiasm.
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Agree entirely. I am a long term Holder too, but there is also money to be made (and lost) short term. Just look at the 1 and 2 percent swings this past year,the S&P 500 overnight. Not only that, but the learning curve when looking a bit shorter is huge.
 
Before the Bell today the NZ Retail figures come out, then a plethora of Manufacturing numbers starting with Aus at 9am, then Japan this arvo, then after our Bell France, Germany, Euro, GB and the U.S. overnight.
Those Europe and U.S. numbers have me worried that the "tanking" could begin overnight.

And that's before taking into account China slowdown and Lockdowns.
 
Mohammed Hazabig'un said:
Before the Bell today the NZ Retail figures come out, then a plethora of Manufacturing numbers starting with Aus at 9am, then Japan this arvo, then after our Bell France, Germany, Euro, GB and the U.S. overnight.
Those Europe and U.S. numbers have me worried that the "tanking" could begin overnight.

And that's before taking into account China slowdown and Lockdowns.
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This data is looking at what has already happened though. China is on track to exit lockdown.
 
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