Why does the bounce in the market feel like a false flag?

Why does the bounce in the market feel like a false sense of hope?

World share market seeing more Green than Red

Can see a crazy ride in next few months

Personally I am willing to jump on board and play the game

https://au.investing.com/indices/world-indices

Yeah, I’ve been using 2500 just to play around with during the last month and I’m up to 3200. It’s been kind of fun basically day trading here and there.

All my 401ks are destroyed though but I don’t have to retire for a long time so I didn’t mess with them. Last I checked they were down 25%

High end and luxury items are the first things to take a hit in a recession
Not something I would jump into

I mean, because it is? Nothing has been fixed in the economy so any movement up is just people getting out before the next wave down. The stock market can’t recover from the bear market until the overall economy heals and that won’t happen until the virus is kept at bay and a vaccine is available.

Because until you can turn on the news and the virus is a 5 min. segment instead of the entire news cast - people are still going to panic and sell stocks

Boeing CEO is on CNBC now for those interested.

Same here down under
AUS SUPER aka 401k has been smashed here as well.
@ age 52 im a litle upset cause I want to have some good times from all the hard work.
Approx 30% so for me at least a couple of NiB's down the toilet

Ah well, gotta roll with the punches

Best wishes all.
Main thing, Stay safe and healthy !

Ando

Interesting how UVXY and VXX are getting killed. Market was down yesterday 600 points and also the VIX was down 11.22%. Haven't seen that for a while where they trend in the same direction. Thoughts?

Looking into Cracker Barrel, Ruths Chris, and Red Robbin.

Bear marker rallies.

They come from almost nowhere.

Those who made new short trades get caught and have to scramble to cover.

They can be swift. And steep.

They can be violent.

About the the time you get scared out of your wits and cover, they turn down and drop like rocks.
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This is Tesla. It is not a Bear market rally. This is, to me, a short covering rally that took place over 2 months time. Followed by the subsequent drop. I don't follow TSLA so I don't know the reason for the up move other than I am aware that TSLA has always had a lot of shorts with its stock. But the downside is a lot of this virus action.

Bear markets can bring this kind of heart stopping action. And make fools of you. Yesterday some of us thought we might see sub-18K. I got fooled, for sure.

Any of your have never been in a bear market, expect to see more of this kind of two way action.

Screen Shot 2020-03-24 at 8.19.41 AM (resized).png

If you can find a silver chart from the early 80s, you will see this kind chart action and silver went from $4-$5 per ounce all the way up to $55.00 per ounce. It was a fast move up. At about $45.00 per ounce, Average Joe started buying and trading silver, silver was making the front pages, scads of little start up companies were placing ads and buying silver (at wholesale prices ), people started liquidating their silver coins and grandma's silver table service. Many old time collectable headed for the smelters. Silver topped at around $55.00 per ounce and started it slide back to earth. A lot of retail silver "investors" got their heads cut off. And sliver pulled back to around $12.00 per ounce and for the next several years slowly slid back to around $$-$5 per ounce.

Squeeze the data on the chart and you get something like this 5 year TSLA chart.

Screen Shot 2020-03-24 at 8.17.34 AM (resized).png

Agreed. We have seen the panic drop. Reason: Virus fear. Now we see the bear rally. Reason: Governments around the world opened the "free" money spigots.

Agreed. But why? What was the catalyst for the greed and panic buying?

I would need to go research it, but I think TSLA announced some good earnings and many were expecting crap earnings and loaded up on the short positions. Earnings turned out good on a heavily shorted stock and the cover was on. The last shorts to cover were probably getting phone calls from the margin clerk.

A phantom bull market will begin Months before the virus has abated, I'm beginning to think bottom. When 10 year displays over 1% for 2 days I'm putting cash back to work.

Yep. The market always turns before the economy.

Nothing to get too excited about yet. Was going to put some money into a few things but awaiting a pull back. I don’t feel the need to rush right here.

Whatever is causing it, that is a heck of an open...wrong of me to hope it drops back down to 18000?

No, but give it a few days. It will get there say by Fri.

You really can't time it. I have 4 IRAs that were around 50% cash/bonds until a couple weeks ago. I've been limping in a bit at a time with bigger buys each time we have a Dow down 1000+ day. Yesterday was my biggest buy yet.

Unfortunately I also have a brokerage account and I went all-in on that one a couple weeks back. That's the one that's hurting, but I only need about half the drop to come back to get back in the black. Much better than going all-in at all time highs I guess.

I'm more cautious with the IRAs because there are such small limits on yearly contributions to them.

It's not about betting against, or timing, it's about nothing has changed from yesterday. There's NO 'positive' reason for the market to be up that much other than false emotions. This is why I suck at the market though, I don't agree with what drives it.

trust your feelings young jedi!

Maybe not since yesterday, but I think it changed yesterday. The Fed came out and said they would buy everything, including things they didn't buy in the financial crisis, in unlimited amounts.

Okay, I had not heard that.

Zero good news for two weeks. Even a little bit of hope is going to make for big swings in a desperate market.

Mondays: Markets sharply drop as bad news accumulated during the week-end.
Tuesdays: Emergency measures taken, markets rally and people think they over-reacted on Monday.
Wednesdays: People don't think these emergency measures will work on the long term, people are depressed and markets drop again...

Not sure about Thursdays and Fridays.

Tomorrow will be another day. I still think the overall market will still drop further. Until the US starts to show a slowing of new cases and things start to open up again.

At this juncture, I don't think we are going to see a true "bottom" until there is medical news that shows things are under control or will be under control soon(ish): vaccine or treatment, either would be a stabilizing event. Till then everything is just a band-aid, and not a stitch, and there will keep being up and down volatility.

It seems to be working. Stock Market is doing great today!

What are you buying?

90645516_2959069034172676_7307292357655789568_n (resized).jpg

I assume everybody has had a trade blow up big in their face. I had one of those way back in 1986-87. And it is all about how you can get hammered by the news and the professional traders trying to stick it to each other. This virus is a different animal than what has come before. But you still cannot trust the news.
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This was the set up.
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What was going on at the time: The AIDS virus was front page news. Biotech stocks had hit the market big time. There were stocks like Cetus, Biogen, and Genentech. Genentech had been a runaway success as far as the market was concerned. I was just getting started in my self-taught trading.

News was hard to get. Stock quotes on the tape were delayed by 20 minutes--unless you paid big bucks for real time quotes. You still had to get yesterday's action from the stock pages in newspapers. I subscribed to a weekly copy of Barrons until I learned I could get it sooner if I went to the news shop on Sunday.

I also had my Mansfield weekly charts. Genentech ran up from its IPO price all the way up to around 105 and then pulled back to around 85 and then bounced around in this range for a couple of months. When I started charting it, Genentech was around 95 dollars per share. OTM 85 puts with 6 weeks to go were selling for $3.50 per contract. OTM 100 calls were selling for around $3.50 per contract. I did not have the money to buy or sell a 95 dollar stock. But with the margin allowances on that stock I had enough margin allowance to short 5 options contracts.

I put on a short straddle and sold 5 OTM 85 6 week puts for $3.50 per. Times 500 that was $1750 credit to my account. The margin does not double on a short straddle so I also shorted 5 OTM 6 week calls for $3.50 per. $1750.00 x 2 = $3500 credit to my account. So, now all Genentech had to do is stay within 100 and 85 and I was golden. Genentech kept trading sideways and was slowly creeping up to $100 per share. My puts got down to 25 cents per contract so I bought those back and covered. The 100 strike calls were trading for about a dollar. Expiation was one week away. It was a Friday so I told myself that I would cover the short calls when they got to 50 cents. That is how I closed out Friday.

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This was the scene.
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I worked nights and would spend my days setting at my broker's desk and we would watch his Quotron together. This is how I got real time quotes and news. If I wanted to make a trade, I would say to broker "buy this". He would fill out the ticket and hand it to the clerk. Many times I saw my trades happen soon as the order clerk made the entry. (You all may find it surprising, but in certain instances, a 100 share trade could get a stock to moving).

I had a good job with good income and could afford to take some risks. Some trades made my broker nervous. He had no balls, even with my money.
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This turned out to be my problem
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Options go thru an opening rotation. They do not start trading until after the stock trades. Genentech had moved from the IPO price of around $35 per share all the way up to $105 per. There was a chain of options as long as your arm. 1 week options. 3 month options, 6 months and 9 months. Lots of options to rotate through. Sometimes it could take 10 minutes to get all of the contracts open. I did not know about how options traded with opening rotations. I was about to find out.
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This was the getting hosed part.
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Monday morning. Bright and early. My broker is at his desk with me sitting at his side. I am short 5 genentech calls striking at 100 dollars that expire in 5 days. On Friday, those calls had closed at $1.00 per contract. About a minute before the market opened a news flash on Genentech popped up on the Quotron. At the moment, I knew I was hosed. I just did not know how bad it was going to be. The NEWS article? : "GENENTECH MAY HAVE FOUND A CURE FOR THE AIDS VIRUS." My butthole puckered up so tight you would not have been able drive and nail into it.

I am short 5 calls with a 100 strike price. The market opens and Genentech blasts out of the gate at $102 dollars. 103, then 104, 105. Me and my broker are going Oh shit oh shit. I cannot buy 500 shares of a $105 dollar stock; I don't have that kind of money and my margin was all used up. The price keeps moving up 106. 107. I cannot buy my short calls back because opening rotation was taking forever. 108, 109. Finally, when the stock hit 110 my options finally opened. My broker was freaking out, which was freaking me out, so I covered in a panic.

A trade that was going to net $3500.00 for me turned into a loss that cost me $4500.00. All it took was 10 minutes. I was psychologically hosed and frozen. As the week progressed, Genentech slowly started drifting down. But the end of the week it had settled back down to $95.00 per share and the calls I covered in a panic went out worthless. Even if I had put stop loss orders on these calls it would not have helped.

I learned a lot of lessons that day. #1 lesson: If you don't have to money to buy the actual shares to cover yourself, then you are overtrading. #2 lesson: Never trust the news as all kinds of games can be played with the news.

I put this up because while there will be all kinds of trading opportunities with this market, there will many opportunities for you to get hurt real bad.

You can call this trade a comedy of errors. Or a series of fuckups. The end result was the same.

Hope this helps anybody who managed to read thru it all.

All I know of stock trading is summed up this way;

blue horseshoe loves Teldar paper these days!

and you can quote me.

I worry this bump will accelerate the "let's get the economy roaring again in 2 weeks! People are gonna die anyways!" talk

I’ve been very lucky picking the right stocks during the wild swings. it was only $2500 I played with. I would of been less risky with a lot of money. I’ve taken pretty much all of it out now

E5C431EA-761A-46B9-8E21-BF05C6743AC1 (resized).png

Do you trade with stops? Or just an ichy trigger finger?

Well, I would say it depends on your investing horizon. For myself, I have no idea where the market will be next week or even tomorrow, could be up or down. So, on a short term basis in my eyes it looks like more unknowns in the near term. Long term the market will be up. It may take years to see that happen, but it will happen.

All that for a $4500 loss. You call that a fuckup?? Lol

What else you would you call it? You have worse?

Close to 6 figures on a trade once. Numerous 5 figure losses. I have also had equal or more gains to balance them out.

Bezos just pissed off the masses.

What happened?

Asked for donations. (Like that operator gofundme thread that went over like a brick). Apparently he did it yesterday(?) but word is just now getting around. I mean...I don't have an issue with it, but...

https://www.independent.co.uk/news/world/americas/coronavirus-amazon-jeff-bezos-relief-fund-covid-19-billionaire-net-worth-a9422236.html