OT: American Politics
- Thread starter MindzEye
- Start date
zeke
Well-known member
zeke
Well-known member
CH1
The Artist Formerly Known as chiggins.
The market is not the economy tho. It can and often does it’s own thing.
Today is a nothing burger really.
zeke
Well-known member
Preston
MBow30 alt account
Stocks go down sometimes. That's mostly it. When stocks have gone up so hard for so long, we price in many favorable outcomes at or near the peak (soft landing, economic prosperity, AI going perfectly, inflation defeated, etc). Something as small as slowly increasing unemployment could cause a massive sell off. Or maybe a second wave of inflation like what happened in the 70s during a period of slow economic growth (stagflation). Because then, instead of the market pricing in a 2% chance of a recession, it goes up to.. let's say 7 or 10%. And suddenly that can result in some weakness. The weakness fuels CNBC headlines which fuels fear which fuels panic selling.
It could be a number of things and none of them have to actually play out for stocks to correct 10% or for us to go into a bear market. Most of the price action in the stock market is highly dependant on context and where we are in the cycle. And right before this little hiccup, we were blasting and pricing in perfection (this is typically where I become cautious). It doesn't just go straight up. And corrections/bear markets don't have to mean we're in for a recession or that it's a bad thing. Would be bad timing tho.
zeke
Well-known member
zeke
Well-known member
But has this actually happened? Only in the latter half of last year did the markets catch up to the economic fundamentals that had been there literally for years already.
What's the definition of "so hard so long"?
Does this really look at all like some kind of unsustainable peak in need of correction?
zeke
Well-known member
zeke
Well-known member
hockeylover
Well-known member
Preston
MBow30 alt account
Something like a weekly RSI (relative strength index) indicator can help show whether something is overbought or oversold and can often stay that way for a long time. But eventually there comes a correction with no exceptions throughout history. Both SPY and QQQ have been overbought for basically all of 2024. And more overbought than any time since Jan 2018 actually (where we then corrected ~13%) and Jan 2020 where we know what happened but that doesn't count.
CH1
The Artist Formerly Known as chiggins.
There’s always plenty of signs — bullish or bearish. None of us know what’s coming.
One thing that got me bearish recently (lucky for me) was seeing the market making new highs but the list of stocks making new 52 lows was bigger than the list of stocks making new highs.
For me that meant the rally was pretty fragile and any number of things could be seen as a reason to take it down.
Quick corrections like we just saw usually have aftershocks as trillions in complacency get readjusted in the weeks and months ahead
Wayward DP
Well-known member
blee ghe? I don't even know what you're trying to say
zeke
Well-known member
worm
Well-known member