The Dow is down AKA Stock Market Watch 2020. Update: Pump before the dump.

MrBob

Member
Oct 25, 2017
3,472
Remember, we are in the hope phase with this rally. This is the "we will look forward past covid 19" moment. Which is true as I believe the USA economy will get past it. But I expect the conversation to change to "How much damage has covid 19 done to the economy", because I don't believe we will get the V economic recovery some are predicting. Covid 19 will still be with us even if it dissipates in seriousness over the summer, and this will likely lead to people not going out as often and spending money. Plus, the fallout from this shut down is likely to cause usa residents to save more rather than spend as freely as before. In addition, companies that take assistance likely won't be able to issue buybacks, and this is a driver for increasing share price. Finally, companies are withdrawing earnings so there is almost no case to base the market on any type of fundamental analysis at the moment. I always try to look at both scenarios for the market, good and bad, but I believe we have a long way to go before getting the all clear moment people are looking for.
 
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SRG01

Member
Oct 25, 2017
3,916
The interesting part is that we haven't seen any (or a lot) revised guidances from a lot of big companies yet...
 

CrankyJay

Member
Oct 25, 2017
7,604
Remember, we are in the hope phase with this rally. This is the "we will look forward past covid 19" moment. Which is true as I believe the USA economy will get past it. But I expect the conversation to change to "How much damage has covid 19 done to the economy", because I don't believe we will get the V economic recovery some are predicting. Covid 19 will still be with us even if it dissipates in seriousness over the summer, and this will likely lead to people not going out as often and spending money. Plus, the fallout from this shut down is likely to cause usa residents to save more rather than spend as freely as before. In addition, companies that take assistance likely won't be able to issue buybacks, and this is a driver for increasing share price. Finally, companies are withdrawing earnings so there is almost no case to base the market on any type of fundamental analysis at the moment. I always try to look at both scenarios for the market, good and bad, but I believe we have a long way to go before getting the all clear moment people are looking for.
well my company just sent us a letter about possible layoffs or pay cuts etc. so it’s coming elsewhere.

meanwhile ceos will be fine
 

MrBob

Member
Oct 25, 2017
3,472
well my company just sent us a letter about possible layoffs or pay cuts etc. so it’s coming elsewhere.

meanwhile ceos will be fine
Sad, but true. I expect the unemployment line to get pretty big even after we are all "back to work". The regular employee will get hurt while the suits will still collect their enormous paychecks. Even if they offer to "cut it in half", this is still an obscene amount of money. Even in an economic downturn the wealth distribution will still heavily favor the already wealthy.

Do we even know the employment retainment details of this stimulus package? I could see companies retaining employees long enough so they don't have to pay back the loan, and then letting go of people right after. Any reason will be used to justify the action.
 

CrankyJay

Member
Oct 25, 2017
7,604
Sad, but true. I expect the unemployment line to get pretty big even after we are all "back to work". The regular employee will get hurt while the suits will still collect their enormous paychecks. Even if they offer to "cut it in half", this is still an obscene amount of money. Even in an economic downturn the wealth distribution will still heavily favor the already wealthy.

Do we even know the employment retainment details of this stimulus package? I could see companies retaining employees long enough so they don't have to pay back the loan, and then letting go of people right after. Any reason will be used to justify the action.
I remember back in 2008-2010 the “you’re lucky to even have a job” rhetoric bullshit that companies used to keep wages down.
 

Pwnz

Member
Oct 28, 2017
8,398
Places
Don't fall for this rally and fed boosted stocks. The reality is that the majority of businesses in the United States and the world are halted. They aren't buying from each other, which means plummeted revenue which means mass layoffs. And we are early in this pandemic. We are still spreading 25% per day. In 2 weeks we will probably have 6-10k dead with over 1k dead each day. I hope the spread stops tomorrow so that's the end of it but most likely we are heading for hundreds of thousands dead because we don't know how to isolate. People are black friday shopping TP everyday, super spreading to their communities.
 

Piston

Member
Oct 25, 2017
5,908
Yeah, my guess overall is that this is a bull trap. I'm still convinced this goes to shit in the next few weeks as people start to feel the actual economic effects of being shutdown.

We got some good news and a potential relief bill passed that caused spikes in the meantime... but most of the actual news about the virus in the US has gotten worse.
 

LJ11

Member
Oct 25, 2017
1,490
Was it yesterday, or Tuesday, that I posted the article about margin calls being held up due to NYS 90 day forbearance law on mortgages/loans. Was catching up on some reading and saw that the Royal Bank of Canada went ahead and started liquidating a REIT. RBC is being sued in court to stop the margin call, but I think they're fucking selling this shit. Laughed my ass off.
 
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massoluk

Member
Oct 25, 2017
4,032
Yeah, as soon as the market open, i'm dumping all my port except for one.

3.5 Million unemployment is undoubtedly an under-reported number.
 

greepoman

Member
Oct 26, 2017
873
I live in one of the southern states where they are kind of lax about stuff and there's still people out everywhere each day and strangely enough cases are sky rocketing. I almost wonder if there will be a 2nd wave of unemployment claims after a lot of states are forced to lock down stuff tighter.
 

sfedai0

Member
Oct 27, 2017
1,905
I live in one of the southern states where they are kind of lax about stuff and there's still people out everywhere each day and strangely enough cases are sky rocketing. I almost wonder if there will be a 2nd wave of unemployment claims after a lot of states are forced to lock down stuff tighter.
Its not strange at all. There is direct correlation and yet people are acting completely obtuse. I guess it will take thousands of deaths for them to snap back to reality.
 
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Mr.Awesome

Banned
Nov 4, 2017
2,295
So does anyone want to call it and say weve seen the bottom? Lots of others on the other side in here. I'm leaning towards that weve seen the bottom but not really willing to defend that statement.
 

dhlt25

Member
Oct 27, 2017
449
So does anyone want to call it and say weve seen the bottom? Lots of others on the other side in here. I'm leaning towards that weve seen the bottom but not really willing to defend that statement.
Not me lol, fed is pretty much out of options now and we still haven't seen the long term effect of the virus yet.
 
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Mr.Awesome

Banned
Nov 4, 2017
2,295
I don’t remember the robinhood process for options, I think you have to wait a while too tho.
Every brokerage house will have an application process. Basically if you make x amount of money (a lot) and say you know a lot about options, you can trade naked positions. Make a little less money and know a decent amount about options, then you can trade spreads. Down from there you can buy options outright. Then from there theres covered calls+cash secured puts. Every application has to be manually reviewed so it does take time (although if you meet automatically on criteria it can go quick). It's possible the brokerage firm even calls you to quiz you on how much you really know before approving you.

It can be their ass if they're giving away option trading approval strategies that are unsuitable...which probably means Robin hood is cutting corners lol.
 

x3sphere

Member
Oct 27, 2017
383
So does anyone want to call it and say weve seen the bottom? Lots of others on the other side in here. I'm leaning towards that weve seen the bottom but not really willing to defend that statement.
Wouldn't this be the shortest bear market in history if that was the bottom? Certainly possible, I just don't see it.
 

Sheepinator

Member
Jul 25, 2018
9,613
So does anyone want to call it and say weve seen the bottom? Lots of others on the other side in here. I'm leaning towards that weve seen the bottom but not really willing to defend that statement.
I think we've seen the bottom for the first time. I wouldn't be at all surprised to see a successful test of it in the next month.
 

Ramsay

Member
Jul 2, 2019
875
Australia
So does anyone want to call it and say weve seen the bottom? Lots of others on the other side in here. I'm leaning towards that weve seen the bottom but not really willing to defend that statement.
Oh no. The coronavirus is going to get a lot worse before it gets any better (especially with earnings on the horizon, and further lockdowns).

If anything, this is a bull trap.
 

Sheepinator

Member
Jul 25, 2018
9,613
Does it actually require you to buy 100 shares for puts if its fulfilled?
Every option is 100 shares. If you buy a put and it's in the money, it will be auto-exercised at the end of the strike date, or there's a chance it may be exercised earlier but that's rare. If you don't want to own the short shares then close the puts before expiry. The only time I can remember an option being exercised for me before expiry was when being short calls before something went ex-dividend, so basically the holder of the calls was exercising to gain shares to collect that dividend.
 
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Mr.Awesome

Banned
Nov 4, 2017
2,295
Every option is 100 shares. If you buy a put and it's in the money, it will be auto-exercised at the end of the strike date, or there's a chance it may be exercised earlier but that's rare. If you don't want to own the short shares then close the puts before expiry. The only time I can remember an option being exercised for me before expiry was when being short calls before something went ex-dividend, so basically the holder of the calls was exercising to gain shares to collect that dividend.
Adding to this but if you are short options in this market early exercise has become common so there is risk out there for anyone who is. Options trading at the money are finding themselves to be deep in the money a week later due to the extreme volatility were seeing. Soon as an option runs out of time value (which deep in the money options have none), it can become advantageous to exercise. Seen lots of people surprised lately that this can happen. If you are long an option you will always have the right to exercise or not.
 
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zulux21

Member
Oct 25, 2017
9,552
So does anyone want to call it and say weve seen the bottom? Lots of others on the other side in here. I'm leaning towards that weve seen the bottom but not really willing to defend that statement.
The only way we've seen the bottom is if the virus disappears in the next week and Trump really can open up America for business by Easter.

I'd be absolutely shocked if we aren't below 18.5k on the dow at the end of april.
We likely won't just be number one in the US in cases at that point but number 1 in deaths as well.
 

TyrantII

Member
Oct 25, 2017
1,652
Boston
So does anyone want to call it and say weve seen the bottom? Lots of others on the other side in here. I'm leaning towards that weve seen the bottom but not really willing to defend that statement.
We just passed China and Italy, Trumps still in charge, and none of the economic disaster data has really been reported out yet.

Strap in, the train hasn't even left the station.
 

kiguel182

Member
Oct 31, 2017
4,476
I've been dipping a bit in the stock market with ETFs and thought of maybe putting a bit more and get into an S&P500 ETF but stuck with my usual amounts in a more general ETF and a imobiliary fund that is more safe.

The market just seems super insane right now. Hopefully once I'm ready to up my contributions it will at least stabilise.
 

SapientWolf

Member
Nov 6, 2017
3,738
So does anyone want to call it and say weve seen the bottom? Lots of others on the other side in here. I'm leaning towards that weve seen the bottom but not really willing to defend that statement.
I don't even think we've seen the correction yet, let alone the bottom. The S&P 500 is still overvalued based on reality. But the fed is doing a full on Weekend at Bernie's right now so who knows when we'll see the bottom (hint: probably not during this administration).
 

thepotatoman

Member
Oct 25, 2017
5,805
Denver
I don't even think we've seen the correction yet, let alone the bottom. The S&P 500 is still overvalued based on reality. But the fed is doing a full on Weekend at Bernie's right now so who knows when we'll see the bottom (hint: probably not during this administration).
Yeah that's the funny thing. I'd say the prices we're seeing right now is basically the correction to a traditional price to earnings in an otherwise average economy, and we haven't even had time for any real loss in earnings to be reported, nonetheless the knock on effects of lost value down the road as we try to recover massive unemployment.

But who knows, maybe stock overvaluation is just the new norm, especially with this administration's focus on it, and within a week health scientists come out with a treatment that easily mitigates most of COVID's worst symptoms allowing us to get back to normal quicker than probably anyone expected 3 days ago.
 
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TheHunter

Member
Oct 25, 2017
9,105
I don't even think we've seen the correction yet, let alone the bottom. The S&P 500 is still overvalued based on reality. But the fed is doing a full on Weekend at Bernie's right now so who knows when we'll see the bottom (hint: probably not during this administration).
I don't think Bernie would let them do that!
 

LanceX2

Member
Oct 25, 2017
2,656
guys I need some true advice.

I want to spend 1000 on some stocks outside my roth.
I was waiting for the next drop but Im afraid I missed the last drop.

Do you all truly think there is another drop coming??

It seems we are recovering and UE numbers had mo effect
 

DickGrayson

Member
Jan 30, 2020
842
guys I need some true advice.

I want to spend 1000 on some stocks outside my roth.
I was waiting for the next drop but Im afraid I missed the last drop.

Do you all truly think there is another drop coming??

It seems we are recovering and UE numbers had mo effect
There are two schools of thought:

1st) We are entering an extended recession that was precipitated by COVID and we cannot begin an actual recovery until the we have control of the pandemic.

2nd) This was a temporary drop due to the COVID emergency and the fundamentals of the economy are strong enough to weather the storm without further large percentage sell-offs.

Any recession has periods of upward trends, so these last few days may just be a temporary upswing. I think we may have seen the bottom but we are likely to visit that bottom again in the near future.
 

SmokeMaxX

Member
Oct 25, 2017
1,012
The fundamentals of the economy might be strong, but the fundamentals go out the window when people are scared to go eat in restaurants or travel on vacation or get a Lyft ride from the airport. The fundamentals fail when unemployment spikes to 10%, 15%, or we're-totally-fucked 30%. I don't think we should be fooled by the variance of the stock market. A lot of effects aren't necessarily "I believe in the stock market" but "I believe that other people believe in the stock market so I should buy now."