Is the stock market going to tank?

[Brock Landers]

My take (in general, not addressed at the post right above this one) is that the market knew Obama was going to win quite a while ago and prices reflect that except that chicken little types (individuals mostly, not big players) selling on fear are pushing the market down temporarily. So, a dip=good chance to buy.

I think you may be right on the Obama thing, but noone really knew what would happen in the Senate. And there are a couple different ways things would probably play out with regard to the fiscal cliff and other things like Obamacare, dividend and cap gains taxing and Simpson-Bowles/supercommittee/general spending cuts.

I like mortgage REITs as a dovish Fed with a complicit administration means rates will stay low for a while.

As for coal...this isnt a dip, its had a real real tough market with a recent pop mostly due to nat gas's stabilization and mini rise. The current environment isnt great for nat gas to continue to rise (so instead of using thermal coal to fire electirc utilities, they use gas still cause its cheap) and metallurgical coal still sucks based on global news (China) for the short term

[ICEHOCEY77]

Gold bitches!

[Benny Profane]

http://blogs.reuters.com/felix-salmo...olume-edition/

[BDKeg]

http://blogs.reuters.com/felix-salmo...olume-edition/

when knight got screwed there was a huge drop off in HFT volume. yea maybe the next generation of kids aren't interested in the stock market, but if inflation ever goes rampant you'll see a huge surge back into stocks since equities will be one of the only ways to hedge against that.

[4matic]

Now is somewhat similar to the early 80's after the last big recession and ten year sidewise market. Everyone then, including me, hated equity. Now is more favorable for equity because rates are so low. How much capital has been deployed internationally vs. retained domestically? Call it complacency but I'm less worried about a volatility spike now than I have been in 5 years.

[iceman]

Now is somewhat similar to the early 80's after the last big recession and ten year sidewise market. Everyone then, including me, hated equity. Now is more favorable for equity because rates are so low. How much capital has been deployed internationally vs. retained domestically? Call it complacency but I'm less worried about a volatility spike now than I have been in 5 years.

Okay, and your action items are?

That's the thing about this thread, lots of theory, lots of history, not much practical advice unless you speak Street. Obviously you can't advise individual people on here but you can, at least in broad strokes (and maybe a specific little nugget here and there?) say where you're going. It would be nice is all.

[4matic]

Okay, and your action items are?

That's the thing about this thread, lots of theory, lots of history, not much practical advice unless you speak Street. Obviously you can't advise individual people on here but you can, at least in broad strokes (and maybe a specific little nugget here and there?) say where you're going. It would be nice is all.

Sure, right now I'm neutral weight equity (for my age and risk profile) and way under weight treasury with allocation at 60/40 stocks/debt. I'd been overweight equity for most of the last 3.5 years with up to 110% long equity (margin debt). By being aggressive the last few years to make up for 2008 losses I no longer "need" extra risk. I don't like owning debt at all at these prices/yields and especially junk because it is so illiquid (I prefer equity to high yield debt). I was trading 30-40 times a year but now I feel allocated properly based on current risk conditions and not overly concerned about a volatility spike so I don't sleep with my quote machine these days. I believe the risk of a 20% down move right now is small but I'm positioned to be ready for it because you have to be. My action items would be sell equity on a trade toward new all time highs SP500 @1570 and add to equity on dips to 1300 (I did move about 3% more to equity on the post election selloff.) The monthly chart has risk to 1300 and that could happen in a hurry under the right circumstances. I'd consider that a long equity opportunity.

If I were looking to overweight right now it would be Emerging Markets. I think they are setup to outperform US equity for the time being. One thing I find interesting is with all the chatter about Europe Germany is up 25% on the year and France has outperformed the US market. Who'd have thought!?

From my optimistic viewpoint I like the latest Goldman Sachs 2013 outlook released yesterday:

"S&P 500 sales, which are measured in nominal terms, will rise by 4.4% in 2013 and 4.7% in 2014," wrote Kostin. "We forecast net margins will remain static as they have for the past 18 months, hovering in the 8.8%-9.0% band through the end of 2014. Given this environment, S&P 500 EPS will rise from $100 in 2012 to $107 in 2013 and $114 in 2014."

Kostin first launched that 1,575 SP500 price target last month. But this massive new 50-page report includes much more detail on strategy.

Strategies to capture growth: market, sectors, stocks
(1) Stocks will outperform Treasuries;
(2) Equities will beat credit returns, although not on a risk-adjusted basis: <this is my focus now.
(3) Cyclical sectors will beat defensive sectors (Materials, Industrials, Information Technology will outperform Consumer Staples, Telecom, and Health Care);
(4) Double Sharpe Ratio stocks offer both high risk-adjusted earnings growth and prospective returns; and
(5) Stocks with high BRICs sales exposure will beat domestic-facing firms.


Read more: http://www.businessinsider.com/goldm...#ixzz2DlAdulpE

[Capatain]

I like mortgage REITs as a dovish Fed with a complicit administration means rates will stay low for a while.

Isn't this backward? it seems like continually low interest rates and especially now that the Fed is buying mbs, is putting a major hurting on the margins for mortgage reits. they've all either been levering up or cutting their dividends the last few months...

[up an down]

So, who's selling/buying/holding what, and why?
I sold just TNH, had a decent profit after 4 months and I think it is nearly over, looking for some stock ideas.
And, I sold all the bond ETFs I owned friday and today. Smart, dumb?
Still have a couple stock ETFs

still doing futures trading, going very well since i got back into it in part time since june.
as of this moment...
long platinum/short gold for over a month
long sugar on thursday
long aus $/short can $ on thursday
swinging in and out of beans and corn, occasionally bean oil and bean meal
not recommending, just what i have in place now, but which might change the next 5 minutes

[ICEHOCEY77]

100% invested in frozen concentrated orange juice‎

[up an down]

100% invested in frozen concentrated orange juice‎

after you take your profits benny has a deal on a house for you

[Skistack]

100% invested in frozen concentrated orange juice&lrm;

Going to corner the market, are you Mortimer?

[4matic]

So, who's selling/buying/holding what, and why?
I sold just TNH, had a decent profit after 4 months and I think it is nearly over, looking for some stock ideas.
And, I sold all the bond ETFs I owned friday and today. Smart, dumb?
Still have a couple stock ETFs

still doing futures trading, going very well since i got back into it in part time since june.
as of this moment...
long platinum/short gold for over a month
long sugar on thursday
long aus $/short can $ on thursday
swinging in and out of beans and corn, occasionally bean oil and bean meal
not recommending, just what i have in place now, but which might change the next 5 minutes

/\That's a full time job. Futures is the way to go for leverage and liquidity. Big move in the gold platinum spread. Platinum overtaking gold is good for financial assets and so is gold SP500 spread solidly below $200 which was previous support.

Equity charts still very bullish with only the monthly chart looking overly extended.

Gold charts are all bearish.

Treasury charts are bearish but junk bonds have been doing VERY well this year.

My time frames are way different then yours so I don't have any suggestions. Long AAPL short SPY?

One more thought.. Stock and asset correlation is breaking down significantly which is also good for markets overall but bad for me right now:

"The lockstep moves in global stocks that dominated equity markets for the past six years are breaking down at the fastest rate on record, a sign investor confidence is finally returning from the financial crisis."

[up an down]

/\That's a full time job. Futures is the way to go for leverage and liquidity. Big move in the gold platinum spread. Platinum overtaking gold is good for financial assets and so is gold SP500 spread solidly below $200 which was previous support.

Equity charts still very bullish with only the monthly chart looking overly extended.

Gold charts are all bearish.

Treasury charts are bearish but junk bonds have been doing VERY well this year.

My time frames are way different then yours so I don't have any suggestions. Long AAPL short SPY?

One more thought.. Stock and asset correlation is breaking down significantly which is also good for markets overall but bad for me right now:

"The lockstep moves in global stocks that dominated equity markets for the past six years are breaking down at the fastest rate on record, a sign investor confidence is finally returning from the financial crisis."

i don't trade futures for a living or even every weekday, so for me it isn't full time, usually the only trades that last longer than a week or so (for me) are spreads, which are typically less volatile and many times have a margin discount.makes it easier to be patient and get 8 hours of sleep
i know a guy who recommended long goog short appl last year and i ignored it.. DOH

my time frame for 90% of stocks i own is probably the same as yours, all my stocks/bonds are in my Vanguard SEP IRA, the TNH trade was shorter term/ seasonal because that's the type of biz the company is in. but if i think things are due for a fall i am not afraid to go to cash. it helps that i don't have to deal with cap gains/losses and if i do less than 25 trades/year per Vanguard ETF no commissions.

right now i am more inclined to think interest rates rise, but better traders than me have thought the same the last few years.
however, i am not willing to go short bonds, i didn't own junk, my bad, but don't think i want to start right now.
where is the quote from? and why bad for you?

[4matic]

where is the quote from? and why bad for you?

Correlation:

http://www.bloomberg.com/news/2013-0...nley-buys.html

Bad for me short term because I've been moving into target date funds the last year which are diversified into tens of different global asset classes. I haven't made a trade since early November (election). With volatility this low I don't need to trade. At some point I'll set up a hedge account when I have the time but hopefully that's a few years away. I'm lagging the SP500 by 2% this year which is ok because I'm at .70 beta. When volatility picks up I'll be ready.

[4matic]

I moved to underweight equity today. First time in a long while (five years).

[Hugh Conway]

All in GNI for the dividend yield.

[LeeLau]

Damn HC you are evil

[Kevo]

I'm pretty heavily into VFIFX

...Which is not nearly as exciting as what you all are into.

[4matic]

I'm pretty heavily into VFIFX

...Which is not nearly as exciting as what you all are into.

Not really. I swapped out of a 2040 to Pimco Total Return. Pretty boring; I'm a singles hitter.

[iceman]

All in GNI for the dividend yield.

That's quite the yield. What's the exit strategy?

edit: "sell it", I suppose.

[Hugh Conway]

That's quite the yield. What's the exit strategy?

Wait until April 6, 2015 when it goes "poof". don't the fuck ask me, it's one of those stocks that makes absolutely no fucking sense - other than stupid people buying for the % yield, not actual yield, or suckers getting conned, and no way I'd touch it.

[up an down]

Wait until April 6, 2015 when it goes "poof". don't the fuck ask me, it's one of those stocks that makes absolutely no fucking sense - other than stupid people buying for the % yield, not actual yield, or suckers getting conned, and no way I'd touch it.

http://seekingalpha.com/article/9110...ce=marketwatch..

[up an down]

I moved to underweight equity today. First time in a long while (five years).

wtf? what happened to your target fund strategy?
and what did you move the equity $ to?
anyone jumping on the E U country bond bandwagon?

[Hugh Conway]

http://seekingalpha.com/article/9110...ce=marketwatch..

And it closed at $74.25 today (compared to $75 for that article in 10/12) with a $5.25 payout tomorrow for shareholders of record as of 12/31/12..... like I said, no fucking sense