Why is the market rising?!

[aus_trader]

In my opinion the the DOW is going to run over 29000; but I don't have the capital and I am not willing to sacrifice fingers .

Totally understand and I would be scared to go all in with the current rebound rally. But I do have a few positions on asx stocks.

Hope any shocks will be drawn out rather than a flash crash. But I think unbearable flash crashes happen when people are not expecting it. I could be wrong, but I am staying on with those few positions while sitting at the edge of my seat

 

[Chronos-Plutus]

Totally understand and I would be scared to go all in with the current rebound rally. But I do have a few positions on asx stocks.

Hope any shocks will be drawn out rather than a flash crash. But I think unbearable flash crashes happen when people are not expecting it. I could be wrong, but I am staying on with those few positions while sitting at the edge of my seat

I don't have the luxury of getting it wrong my friend. Not saying that I thought that I would have predicated the V recovery so far: but I was on the button picking the drop in the market; you can check my ING super account.

So the FED is giving money for free, give it to me!

 

[aus_trader]

but I was on the button picking the drop in the market; you can check my ING super account.

Good to hear

 

[frugal.rock]

Well, an indicator could be a single stock.
Someone mentioned Z1P and Afterpay as being good general market indicators. So, let's note they have pulled back a bit from very recent highs.
However, if one considers Tyro (TYR), this is the finger on the pulse with regards to getting out there and spending. Their income as being currently reported weekly at the start of the week to keep investors informed.
(FYI, Tyro is a payments and lending platform with over 30,000 retailers using their EFTPOS machines )
This morning's Ann, is the first out of these recent weekly Ann's to show an improvement over same period last year.
The money is flowing, pumping hard to be precise.
Good For Tyro, the fact that many people and retailers have moved away from paying with cash, means there paying by phone or card.

Street bins are overflowing with tourists rubbish, namely and mostly take away coffee cups.
Packaging companies are onto a winner. The environment? not so much...

Table; Tyro announcement today.


F.Rock

 

[sptrawler]

Totally understand and I would be scared to go all in with the current rebound rally. But I do have a few positions on asx stocks.

Hope any shocks will be drawn out rather than a flash crash. But I think unbearable flash crashes happen when people are not expecting it. I could be wrong, but I am staying on with those few positions while sitting at the edge of my seat

If this is a dead cat bounce, it should be entered in the olympics, if it wasn't for NAB and WBC i would be back to pre covid.
I like you am hanging on for dear life, but we still have to survive the next reporting season, before I breath easy.

 

[Boggo]

...
I like you am hanging on for dear life, but we still have to survive the next reporting season, before I breath easy.

Yes, that's the upcoming test. I can't see it being pretty

 

[Dona Ferentes]

I read this guy

Right now financial markets have their attention on an exploding Fed balance sheet, not to mention similar expansions taking place at the ECB, BOJ, RBA, BOE et al.
Furthermore, overnight we saw the largest economic data surprise in history. Instead of an expected decline of 7.5 million U.S jobs in May, we saw an increase of 2.5 million.....
In addition we are seeing, at long last, the reopening of economies across the world. The light at the end of the tunnel is now much closer and let us hope and pray that the darkness will soon be behind us.

The fact of the matter is that the combination of turbo-charged, unprecedented monetary and fiscal policy has provided financial assets with an extraordinary typhoon-like tailwind.
Adding further fuel to the ‘buy everything’ euphoria are millions and millions of new investors that have become intoxicated with the excitement of buying call options on stocks instead of gambling on sports games.

Are we seeing signs of irrational exuberance?
Absolutely.

Are market veterans of the crashes in 1990 (Japan), 2000 and 2008 urging caution and warning that we’ve seen this movie before?
Absolutely.

Is the market expensive?
Absolutely.

Do we all think that we’re smart enough to get off the rollercoaster just in time?
Absolutely.

Will the great majority of long-only closet indexation money managers stay on the roller coaster regardless of valuation and risk/reward?
Absolutely.

They live in a world of relative return, whilst everyone else lives in the real world of actual returns.
Market up 30%, portfolio up 32%...great job.
Market down 30%, portfolio down 28%...great job.

All of which begs the question, what do I do?

J Pain. (he's into banks, BTW)

 

[Dominover]

I still can't believe this market is still rising. Investors must be paying multiples higher price to sales than before the crash. It must be the lack of market data at the moment, creating the illusion that everything is ok. The dumb luck if those in the market now actually frustrates me a little. So much faith in QE I suppose.

 

[frugal.rock]

I still can't believe this market is still rising. Investors must be paying multiples higher price to sales than before the crash. It must be the lack of market data at the moment, creating the illusion that everything is ok. The dumb luck if those in the market now actually frustrates me a little. So much faith in QE I suppose.

The US over estimated unemployment levels. So did we.
If it were the other way around, things would be vastly different.
In part, it seems to be the crash we didn't need to have, but of course, the ~ 10 year cycle just had to happen, one way or another.

F.Rock

 

[The Triangle]

If this is a dead cat bounce, it should be entered in the olympics, if it wasn't for NAB and WBC i would be back to pre covid.
I like you am hanging on for dear life, but we still have to survive the next reporting season, before I breath easy.

I'm down 3% vs feb 15th and should be down 15 at least. Ive pulled about 1/3 out of the market in the past month. I would rather risk missing a risky gain vs a huge loss.

What's happening here is uncharted market territory. Melt up. Robin hood accounts. Who knows. Craps are better odds than guessing whats happening.

Gold is overrated. In an apocalypse gold is worthless. Im happy with holding pure AUD. Resources will always give our currency a decent backing. Once annual results come in i think we'll see a gradual pullback as people realise the economy has been seriously hit. And if inflation skyrockets cash is not bad to have either.

Also reallocating super out of any US equity. If sleepy creepy joe wins the market will get crushed.

 

[aus_trader]

Agree on most of it and like given. Except for one point:

And if inflation skyrockets cash is not bad to have either.

I thing you got it mixed up somehow, easy to happen.

Anyway, this is my take:
In an inflationary environment cash is trash.
In an deflationary environment cash is king.

 

[Dominover]

Well I am glad to see that others are thinking what I am thinking. I agree especially with the point that once financial results arrive, the informed will lead the uninformed out if the market.

Deflationary pressures are more of a worry now though. I do you have money in the market from a long way back but would not dare add anything since the blood bath. It kind of frustrates me that in a forward looking market nobody is seeing the obvious. It might tell us something about the type of investors populating the market at the moment. I am just amazed at how many there are

 

[Smurf1976]

They will pump it up, to maintain the narrative to support the government of the day!

As a random thought and referring to the S&P500 we could see:

*A double or triple top. So back to the old high then down and possibly having a second go for the third top.

*A head and shoulders top where the February high was the left shoulder and we're now on the way to the head.

In both cases that means massive moves up and down and whilst my comments are pure speculation, all things considered I wouldn't say they're impossible since we've seen two massive moves already this year.

 

[mangojoe]

I found this article using the term “Misallocation of capital” today to the point :-| and it motivates me to take even more money out of the market even though it may keep rising.

The car rental company, Hertz Global Holdings (HTZ), declared bankruptcy on May 22 and their stock, as you might expect, lost most of the little value it had left at that point, falling to $0.40, a long way from the $20.85 February high. That should be the end of the story, but with so much cash chasing a return, it isn't. Instead, HTZ has done this:

The stock has risen over 1250% from that low, taking it to nearly double its price before declaring bankruptcy.
...
It is the kind of behavior we saw in the run up to 2000 and 2007, where value was irrelevant. If the hunt for profit has led to such irrational behavior, it must mean that all rational value has disappeared. That does not bode well for sustained upside in the near future.


https://www.nasdaq.com/articles/wha...ocks-says-about-the-market-overall-2020-06-09

 

[The Triangle]

Agree on most of it and like given. Except for one point:

I thing you got it mixed up somehow, easy to happen.

Anyway, this is my take:
In an inflationary environment cash is trash.
In an deflationary environment cash is king.

I should have been more clear! Yes i agree in theory to your point on cash - I was not suggesting to hold cash through a large inflation period but i do not want to hold shares with inflation (or deflation) at the early stages. Its hard to tell whats a good stable company now with the extreme accounting and tax loopholes which get exploited and with the market uncertainty I would rather hold increased cash and have it available to redeploy one we get a feeling where things are going. Obviously Im screwed if we hit Zimbabwe level inflation. But 70s level US Ill handle.

 

[aus_trader]

I found this article using the term “Misallocation of capital” today to the point

These are biblical times as far as stocks are concerned. Resurrection of dead companies and keeping alive all sorts of zombie companies seems to be the norm.

What's happening here is uncharted market territory. Melt up. Robin hood accounts. Who knows.

Those Robin hood stock buyers must have had a huge boost to their confidence and ego given buying at the bottom at bankruptcy levels has paid off as a 10-bagger with Hertz Global Holdings Inc (HTZ). Risk taking may go to a whole new level especially with Robinhood Rookies.

 

[Dominover]

These are biblical times as far as stocks are concerned. Resurrection of dead companies and keeping alive all sorts of zombie companies seems to be the norm.


Those Robin hood stock buyers must have had a huge boost to their confidence and ego given buying at the bottom at bankruptcy levels has paid off as a 10-bagger with Hertz Global Holdings Inc (HTZ). Risk taking may go to a whole new level especially with Robinhood Rookies.

Yes, Ted Bouman mentions this in his presentation on this topic. I believe he got his information from zero hedge. Apparently there was a surge in new sign ups to Robinhood since the start of the pandemic, and he presented this as a clue to the experience levels of those holding up the U.S market.

Even the Aussie VIX has dropped. We're below 20 now. Could this be a clue that the cluelesness is expected to continue?

 

[Chronos-Plutus]

Good to hear

Yes; I suppose that is why some people put up with my behaviour at times. I do have a pretty good track record at picking the market plunge; I have picked them all over the last ~3 years.

 

[aus_trader]

Yes; I suppose that is why some people put up with my behaviour at times. I do have a pretty good track record at picking the market plunge; I have picked them all over the last ~3 years.

wow

 

[aus_trader]

...

Really ?
I thought he was acting like a Saint giving up most of his salary while Qantas not making any money with no flying at the moment.