Gun to the head, I’d say we rally sometime the coming week. However, I also believe the “WE MUST RETEST THE LOWS FAGS” will be out in hard-core fashion, forcing people into accepting the absurd notion that markets can never trade higher without first retesting the lows. Said lows, in my opinion, are 5-10% lower from here.
As of now, betting markets are calling for a -500 point drop in futures tonight. Let’s see how that holds up.
In my meantime, I’ve been building a buy list of stocks based upon the notion of “what if everything goes back to normal”, which is an entirely cogent premise.
Below are some stocks that require being around fellow humans that have been smashed due to coronavirus. Maybe worth a look for a bounce soon.
Stock, 2 week returns
CHDN -24%
AAL -35%
RCL -31%
SIX -36%
PLAY -31%
HA -26%
MGM -24%
AAPL -18%
DIS -17%
LOW -17%
NKE -15%
COST -13%
SBUX -13%
CVS -18%
TGT -13%
UBER -16%
MAR -16%
STZ -17%
CMG -18%
BBY -18%
MTCH -17%
BURL -13%
ULTA -14%
WYNN -19%
JWN -14%
DNKN -13%
MTN -15%
H -14%
LYV -18%
I’m sure there will be more. In a sell off like this, sometimes it gets confusing on what to buy. Since this virus started the main difference in human behavior has been congregating amongst each other. No one wants to get infected. Ergo, they’re avoiding public places, thus affecting consumerism trends. But like drug addicts, humans cannot help themselves and will eventually return to doing all of the things they were doing before. Therefore, the best stocks to play on the bounce aren’t banks or semis, but stocks like SIX, H and LYV.
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Markets aren’t going to like this either. China’s manufacturing purchasing managers’ index plunged to 35.7 in February from 50 the previous month, according to data released by the National Bureau of Statistics. https://www.bloomberg.com/news/articles/2020-03-01/no-place-to-hide-for-markets-looking-for-central-bank-salvation?srnd=fixed-income
I think we need to see it hit the US, then we can exhale and figure out where to go from there. We need to test and get it over with.
I’d love a bounce, and a big one (so I can load up on put options). Are there that many greedy buyers willing to support it? The pendulum swings between greed and fear, and fear is predominating. This plague’s kill rate is on a sliding scale, depending on age and pre-existing conditions. Hard data concerning its pernicious effects are not yet fully known. A quick vaccine is not likely.
So here we are, in Prince Prospero’s ballroom (the USA). The Prince is swearing that all is well and the government is in control. To believe that, one must also believe they hold illimitable dominion over all.
Expecting cascades from pool to pool on this, drop followed by a bit of calm. It’s still being underestimated by the markets imo, in particular consumer spending can enter a deep freeze if it wants, a huge part of GDP.
Take a look at the Washingotn Post business section front-page graphic:
https://www.washingtonpost.com/business/2020/02/28/12-days-that-tanked-markets/
If that doesn’t induce a panic-driven capitualtion, nothing will.
Even with the weekend news, i think we end up higher by Monday afternoon.
Has anyone ruled out a coordinated move by the central banks before the open tonight?
They don’t need to do much to push futures up 600 and let the shorts do the rest tomorrow.
If everyone believes it’s going down, ie betting odds, then we’ll probably move higher at first.
Here’s an intersting perspective:
short term?
“it is highly likely any short-term rallies will be met with more selling as investors try and ‘get out’ of the market…
it is very likely we have seen the bulk of the correction on a short-term basis.”
Talk about covering all the bases.
long term?
“For longer-term investors, people close to, or in, retirement, or for individuals who don’t pay close attention to the markets or their investments, this is NOT a buying opportunity…
As noted in the last chart above, the bull market that began in 2009 has NOT ended as of yet. This keeps our portfolios primarily long-biased at the current time.”
Again, no conviction either way, but I guess wait-and-see is better than their short-term double-speak.
https://www.zerohedge.com/markets/market-crash-continues-ahead-futures-open-navigating-what-happens-next
I’m eating popcorn until next Wednesday after/if they finish counting the votes from Super Tuesday. You see, the real virus per Old Man Gundlach is the Bernie Virus. It’s the catch in the throat and sniffle and ache hedgies in California and New York get when after years of slogging to work through streets filled with human excrement, those that leave it there, cops in handcuffs, incompetent, corrupt bureaucrats laughing behind their hummus bowls and Priuses and the rest of urban atrocities to which they’ve been numbed, they suddenly realize there may be 49% of the electorate who actually want to take everything the hedgies own or control and pretend to manage it for the good of society. Instant recession, 36 months of Happy Trump tossed into the shitter. Let’s see if Biden or one of the other pretenders bobs to the surface Wednesday morning. What this market needs is a full dose of Buttigieg and Klobuchar, or Biden if he can remember where he is and who he’s talking to (no Mandela).
this is amazing in its own way
Interesting comment yossarian. Fear of the electoral majority of voters. Those who fear Bernie Virus must believe Sanders would have a significant probability of beating Trump. And that is even more strange.
Is it stranger than Trump beating Clinton, Bush, Rubio, etc.?
I was intentionally vague. No, the possibility of Sanders beating Trump is not strange. What is strange (to me) is the thought process of those who take that possibility and enlarge it into a frenzy.
In an interview with CNN (or amybe MSNBC), the Sen. Doug Jones, said that he has been friedns for Biden for 40 years, and that is who he wants to win. However, there was a moment of cognitive dissonance as he said that the biggest problem is that the economy is workign great for the 1%, buit not so well for everyone else – which is the **exact message** of the liberal wing of Warren/Bernie/Steyer.
In fact that message – not Medicare for all – is the priamry differnece between moderates/establishment and liberals. The moderates/establishment beleive that things were workign fine before Trump was elected (trump is the problem) , whiel the liberals beelive that Trump was elected *because * things weren’t workign fine (trump is the symptom). Medicare-for-all is just a way to distarct the masses.
https://www.breitbart.com/politics/2019/08/19/credit-card-joe-biden-sided-with-top-donor-to-make-bankruptcy-harder/
On a side note:
Trump adminsitration COVID underresponse +
Trump supporter ignorance on COVID-19 threat +
Trump rallies =
Natural selection at work
Another example: https://www.zerohedge.com/political/81-south-korean-end-days-worshippers-test-positive-coronavirus
One thing that has been so interesting about this market is that active participants have been winning big recently and finally vs. the passive trend – see Hartman’s three year long passive trade vs. options on TSLA and SPCE recently making life long gains and then, big balled puts and flu stocks printing.
I think short side pressure ultimately wins here bc people aren’t actually freaking out yet. Trumptards think it’s a hoax. Millennials think they have heard about this so many times it will go away. People are basically still totally complacent.
People around town here today are way too nonchalant about what is coming and it was kinda weird. I say short until the idea that “we can fix this” goes away. As far as I know there’s no reason not to expect exponential spread here in Seattle, the west coast, the US.
Your instinct makes sense. It took less than 24 hours for my claim that the infections will be much higher than people antcipate to come to fruition with the soon-to-be-pandemic in your neck of the woods. However, caution is warranted
Did you short in 2008? The full force of the governement – the FED, but also the SEC, the Treasury, and the Congress – will be amassed against price discovery.
Bookmark this post: I predict that this recession cycle, the Millenials (through the Treasury) will be buying overpriced stocks from the Boomers; it is already happening in Europe, Japan, and China. American “capitalism” is nothign more than socialism for the rich.
Thank you for the post Fly
I didn’t even know about the bettign markest. Here is the site:
https://www.ig.com/uk/indices/markets-indices/weekend-wall-street
Going forward, I will be using it as a retail/”dumb” money measuring stick and a contrarian indicator.