DJIA, NYSE, S&P = CRASH!!!

[Zippyjuan]

My 401k is gonna take a beating....

Wondering if I should suspend my monthly allocation. I'm matched my first 3% by employer.

That matching is equal to a 100% return on that money. I doubt you can do better with anything else. If you are worried, at least take the match money.

 

[angelatc]

My 401k is gonna take a beating....

Wondering if I should suspend my monthly allocation. I'm matched my first 3% by employer.

No no no! Buying during the valleys is where the real money is. Just keep buying and holding. Trust me on this.

 

[presence]

No no no! Buying during the valleys is where the real money is. Just keep buying and holding. Trust me on this.

Bulltrap

Let it fall.

 

[Zippyjuan]

Based on your chart, I would say we are in a "bear trap"- not a "bull trap". Media hasn't been hyping how totally awesome stocks have been doing and there has not been a huge rush of individual investors into the market.

The economy is not crashing so there is little reason aside from a market correction for stocks to crash. Fundamentals are still steady. Not "booming" but steady. (I see Donald Trump thinks "real unemployment" is 42%). I think this will be a short decline- not the "end of money as we know it" some hope it is. Jump out now and risk losing money after it goes back up. People should be in stocks for the long term anyways. Trying to react to ups and downs you usually miss the real action and make less money. You can't time it. IF you are worried about fluctuations you probably should not be invested in anything except maybe a savings account. Everything else will go up and down.

 

[Zippyjuan]

These two charts show that gold is not really a commodity.

 

[presence]

You can't time it.

Have you seen Friday's SPXU chart?

I'm in the midst of timing the shit out of it.

 

[Zippyjuan]

Are you shorting on stocks next week? How long does your chart forecast it might last? How low is it likely to go?

 

[presence]

Are you shorting on stocks next week?

I expect to be short on the major indexes for the next 8-18 months.

 

[Zippyjuan]

Wow. A stock market decline to last that long? (thanks for sharing your projections!)

 

[presence]

I guess you missed page 4

18 month outlook:

Nothing above May highs; 30%++ cumulative devaluation <1490 S&P <12800 DOW

global economies in state of panic and default, china engaging in currency war tactics, impending death cross has turned to death cross, GTFO now

 

[Zippyjuan]

I did kinda skim all the "gloom and doom". I still think this is just a short term decline. The economy just isn't that terrible right now. We have been hearing "crash soon!" for some six or seven years now.

 

[Lord Xar]

Put it into a money market account at least up to the amount that is matched by your employer,that part is free money.
You will want cash to buy into the market at some point in the future.

Yeah - my company only offers Fidelity stocks for the 401k, BUT there are a few bond choices.

 

[presence]

So, presence, what's the next prediction?

look for financial news keywords:

circuit breakers
margin calls

 

[presence]

Jul 28, 2015

http://www.marketoracle.co.uk/Article51628.html

Yesterday's inexplicable drop on the heels of all attempts to put a floor under stocks (and manipulate them higher) was truly indicative of what free markets can do to central planning's "hopes and dreams."

A total of 1,500 shares, or half of all listed stocks that were trading yesterday, were halted when they hit the 10% down limit that triggers market "circuit-breakers."

If we were looking for proof that the markets are bigger than those who would manipulate them, we've got it now…
If the investing (or was that speculating?) public can't sell shares that are halted or meet margin requirements without selling more stock, and all attempts by the government fail to stem widespread panic selling, there will be a crash.

A devastating market crash in China would upend the Chinese economy and undoubtedly create a wave of contagion that could take stocks down across the globe.

google trends "shanghai composite"




Stocks Fall Most in 4 Years as China Dread Sinks Global Markets
Bloomberg‎ - 3 days ago

European stock futures fall sharply, tracking fall in US and Asian markets - @Reuters - breakingnews.com

 

[Zippyjuan]

look for financial news keywords:

circuit breakers
margin calls

Circuit Breakers:

Level 1 Halt

A 1,200-point drop in the Dow industrial average before 2 p.m. ET will halt trading for one hour; for 30 minutes if between 2 p.m. and 2:30 p.m. ET; and have no effect if happens at 2:30 p.m. or later, unless there is a level 2 halt.

Level 2 Halt

A 2,400-point drop in the Dow industrials before 1 p.m. will halt trading for two hours; for one hour if occurs between 1 p.m. and 2 p.m.; and for the remainder of the day if at 2 p.m. or later.

Level 3 Halt

A 3,650-point drop will halt trading for the remainder of the day regardless of when the decline occurs.

The percentage levels were first implemented in April 1998, and the point levels are adjusted on the first trading day of each quarter. In 2011, those dates are Jan. 3, April 1, July 1 and Oct. 3.

The actual breakers are percentage declines in one day. First breaker is 10%, second is a 20% decline, third is a 30% decline. Points shown were based on a DOW of 12,000. Today would be based on what the DOW was on July 1st or 17,619.51.

That means that a Tier One circuit breaker would kick in if the DOW lost 1,762 points in one day. Second tier if it falls 3,580 points in a day.

Margin calls can happen at any time. http://www.investopedia.com/terms/m/margincall.asp

DEFINITION of 'Margin Call'

A broker's demand on an investor using margin to deposit additional money or securities so that the margin account is brought up to the minimum maintenance margin. Margin calls occur when your account value depresses to a value calculated by the broker's particular formula.

This is sometimes called a "fed call" or "maintenance call."

INVESTOPEDIA EXPLAINS 'Margin Call'
You would receive a margin call from a broker if one or more of the securities you had bought (with borrowed money) decreased in value past a certain point. You would be forced either to deposit more money in the account or to sell off some of your assets.

Say you are betting stocks will go down and you leveraged your bet (borrowed money) from your broker to try to multiply your returns (you bet you get a return greater than the cost of borrowing the money- if you are right- you can win big but if you are wrong- you can go broke- it is a very risky play). You put in $1000 and borrowed $3000 for a total investment of $4,000. If stocks instead go up by enough that the position you are in loses a value worth what you personally put up (in this case, $1000), you either have to borrow more money to stay in or can be forced to sell you shares to pay back the people (brokers) you borrowed from meaning you lose all of your money.

Margin calls can (and do) happen in good markets and bad. Just means you made a bad guess on what your investment will do.

 

[Zippyjuan]

Jul 28, 2015

http://www.marketoracle.co.uk/Article51628.html




google trends "shanghai composite"




Stocks Fall Most in 4 Years as China Dread Sinks Global Markets
Bloomberg‎ - 3 days ago

European stock futures fall sharply, tracking fall in US and Asian markets - @Reuters - breakingnews.com

Just to see where we are in China, the Shanghai Exchange Index is currently 3,507. That won't mean much to anybody since it is just a number but how does that compare to say a year ago? One year ago the index was 2,229 so despite all what we have heard about a Chinese Stock Market Crash it is still up 57% from a year ago- a huge increase compared to any other stock market. The high was 5166 in June- more than double from the year before. It is still a bubble deflating. http://www.bloomberg.com/quote/SHCOMP:IND

China's economy too is still growing and not collapsing. It is just growing at a slower rate than it was in the past. Double digit growth cannot be sustained indefinitely.

http://www.wsj.com/articles/china-gdp-growth-is-slowest-in-24-years-1421719453

BEIJING—China’s economic growth slowed to 7.4% in 2014, downshifting to a level not seen in a quarter century and firmly marking the end of a high-growth heyday that buoyed global demand for everything from iron ore to designer handbags.

The slipping momentum in China, which reported economic growth of 7.7% in 2013, has reverberated around the world, sending prices for commodities tumbling and weakening an already soft global economy.

China’s economy grew 7.3% in the fourth quarter from a year earlier, the National Bureau of Statistics said, buttressed by targeted moves to ease borrowing. But it continued to face a housing glut, soaring debt and overcapacity in many industries, factors likely to erode growth in 2015.

IF the US were growing at 7.3% there would be concerns about our economy "overheating". In China, that is a "slowdown".

 

[TheNewYorker]

What's stocks to invest in. this talk about George Soros buying BTU made me want to try the stock market game. Reason being I meet a guy who is day trader and makes a killing. I quit my day job Friday and put my entire savings account into BTU and GOOG shares. Any other good ones?

 

[Zippyjuan]

Yeah - my company only offers Fidelity stocks for the 401k, BUT there are a few bond choices.

Bonds do well if interest rates are falling- and they have been falling since about 1980 so they have had a good run. If the Fed does actually start to raise interest rates, bond prices could fall. This applies to people or funds which trade bonds. If you buy and hold bonds, then you collect the face value interest rate.

 

[Zippyjuan]

What's stocks to invest in. this talk about George Soros buying BTU made me want to try the stock market game. Reason being I meet a guy who is day trader and makes a killing. I quit my day job Friday and put my entire savings account into BTU and GOOG shares. Any other good ones?

If you have indeed quit your job and put "all your savings" into those two stocks, you have no money left to invest in other ones. Day trading is a hard way to make a living- many try but few are actually very successful at it. Buy and hold is better because the more you trade, the more you lower your returns (each trade costs money- not just in transactions costs but in short term capital gains taxes as well).

You also need diversity- not just one or two stocks- to spread risk. I like index funds for their diversity and very low costs. There are many different funds tracking many different indexes. And since they aren't chasing returns by trading for what they think will be hot in the next quarter but just matching the stocks in the index, they aren't trading shares within the fund and that keeps costs lower which means more money for you.

For individual stocks, check into what a DRIP is- (Dividend Re_Investment Plans). It is the lowest cost way to own individual stocks (each have their own rules on things like minimum purchases and investment requirements). Basically you buy a dividend paying stock and they take the dividend payout and instead of sending you a taxable check, they roll the money over into more shares of the stock (usually at zero transaction fee). I added $5,000 to my account recently and was charged $0.18 (yes, eighteen cents) transaction costs. Buying shares at say ETrade may cost $7 a pop.

 

[Warrior_of_Freedom]

This is all part of the moon cycle. Did you know all horrible events in human history happened while the near side of the moon was facing the earth?