Stock Market Watch |OT| I've stocked up on market watches, what now?

MrBob · Mar 26, 2020

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.

SRG01 · Mar 26, 2020

The interesting part is that we haven't seen any (or a lot) revised guidances from a lot of big companies yet...

CrankyJay · Mar 26, 2020

MrBob said:
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

Steel · Mar 26, 2020

SRG01 said:
The interesting part is that we haven't seen any (or a lot) revised guidances from a lot of big companies yet...

How do you even calculate guidance in this environment? It'd basically be making shit up and theory-crafting.

MrBob · Mar 26, 2020

CrankyJay said:
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 · Mar 26, 2020

MrBob said:
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.

Ramsay · Mar 26, 2020

Happens every time.

whatsinaname · Mar 26, 2020

Ramsay said:
Happens every time.

jdmc13 · Mar 26, 2020

whatsinaname said:

Like pottery, it rhymes. The question for me is: how far do we have to fall?

2pac_71 · Mar 26, 2020

jdmc13 said:
Like pottery, it rhymes. The question for me is: how far do we have to fall?

That's Tesla stock not the market index. But I'm sure the market index sort of looks like that at the moment.

Unless you were talking about Tesla.

jdmc13 · Mar 26, 2020

Mackaveli said:
That's Tesla stock not the market index. But I'm sure the market index sort of looks like that at the moment.

Unless you were talking about Tesla.

Didn't know it was Tesla, thought it was SPY.

SaintBowWow · Mar 26, 2020

whatsinaname said:

So is this return to "normal" or return to the mean? There's that bump at the beginning of March that could also match up with the return to "normal" pattern.

Pwnz · Mar 26, 2020

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.

whatsinaname · Mar 26, 2020

SaintBowWow said:
So is this return to "normal" or return to the mean? There's that bump at the beginning of March that could also match up with the return to "normal" pattern.

No fucking clue with TSLA tbh, just found the coincidence funny. S&P went up 6.5% today, Tesla dropped 2%.

Piston · Mar 26, 2020

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 · Mar 26, 2020

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.

massoluk · Mar 27, 2020

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.

Deleted member 8741 · Mar 27, 2020

Yah, I'm not buying any of this long term.

Mr.Awesome · Mar 27, 2020

SRG01 said:
The interesting part is that we haven't seen any (or a lot) revised guidances from a lot of big companies yet...

Most have just forgone guidance so you wont see any.

greepoman · Mar 27, 2020

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 · Mar 27, 2020

greepoman said:
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.

greepoman · Mar 27, 2020

sfedai0 said:
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.

I thought that was obvious sarcasm :}

Mr.Awesome · Mar 27, 2020

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.

Mr.Awesome · Mar 27, 2020

Lyrick said:
yeah, Fidelity sends you a paper book then only gives you access to covered Calls to start (and requires a margin acct), you have to fill out more forms to get full option access.

They require a margin account for covered calls? That doesnt make much sense

dhlt25 · Mar 27, 2020

Mr.Awesome said:
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.

Mr.Awesome · Mar 27, 2020

Blue Skies said:
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 · Mar 27, 2020

Mr.Awesome said:
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 · Mar 27, 2020

Mr.Awesome said:
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.

Mr.Awesome · Mar 27, 2020

RastaMentality said:
Does it actually require you to buy 100 shares for puts if its fulfilled?

If you are called away on a short put, yes you are indeed required to buy a 100 shares. That can happen at anytime overnight for the majority of options.

Ramsay · Mar 27, 2020

Mr.Awesome said:
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 · Mar 27, 2020

RastaMentality said:
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.

Link · Mar 27, 2020

There must be some sweet corporate lifelines in that Senate bill.

Mr.Awesome · Mar 27, 2020

Sheepinator said:
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.

zulux21 · Mar 27, 2020

Mr.Awesome said:
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.

feline fury · Mar 27, 2020

dhlt25 said:
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.

Just how unlimited is this unlimited QE though? At some point, there would be inflation issues but inflation has been low so…

dhlt25 · Mar 27, 2020

feline fury said:
Just how unlimited is this unlimited QE though? At some point, there would be inflation issues but inflation has been low so…

no idea, it's like CB around the world are playing game of chicken, everyone is printing unlimited money, who knows when it will all come crumbling down

TheHunter · Mar 27, 2020

We're entering a Depression.

No amount of juicing the markets or WSJ articles can change that.

TyrantII · Mar 27, 2020

Mr.Awesome said:
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.

igordennis · Mar 27, 2020

So what is better to buy individual stocks guys? Fidelity account or Vanguard?

kiguel182 · Mar 27, 2020

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.

ItAintEasyBeinCheesy · Mar 27, 2020

TyrantII said:
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.

Yeah. This gonna be a rough ride.

Deleted member 41520 · Mar 27, 2020

Mr.Awesome said:
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.

Definitely have not seen the bottom.

SapientWolf · Mar 27, 2020

Mr.Awesome said:
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).

Luminish · Mar 27, 2020

SapientWolf said:
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.

Luminish · Mar 27, 2020

feline fury said:
Just how unlimited is this unlimited QE though? At some point, there would be inflation issues but inflation has been low so…

Inflation is the goal of QE, not the cost of it.

The real worry is inequality and consolidation. Those are already at insane levels, and we're about to see it supercharged even more with these stimulus plans.

TheHunter · Mar 27, 2020

igordennis said:
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!

TheHunter · Mar 27, 2020

Mr.Awesome said:
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 wouldn't call it.

We haven't even hit peak on this thing yet. I do think we'll stay above 15k though.

LanceX2 · Mar 27, 2020

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 · Mar 27, 2020

LanceX2 said:
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 · Mar 27, 2020

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."

Stock Market Watch |OT| I've stocked up on market watches, what now?

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