The 2020 Stock Market Crash Thread

El Chinito loco

Crow
Gold Member
I don't know how young or old you guys are on average but I cut my teeth on the stock market during the 2000 dot com crash, also the 2001 (9/11) collapse, and then again during the 2008 meltdown.

2008 was when I actually had substantial money in play (over 200k) and it's important to keep a rational and level head. All you need to know is the general direction of where the market is going.

The most important thing I learned throughout all this is..

Don't trade the news...let me say it again, don't trade the fucking news.

Turn the tv off and block out all external sources. Just trade the charts and what you see in front of you quantitatively.

I'm seeing a lot of the same doomsday talk now like I did during several crisis events. Like a famous trader said one time..everyone always says "it's different this time."

If you think the world is ending now that's more of a reflection of your own ego or biases.

This is a big correction and if it turns into an actual bear market all I have to say is that there is also no better time to be a trader than a high volatility bear environment. When I really started to trade a lot in 2008 I was rolling puts all the way down and made good money.

Something else to consider from a broader more meta geopolitical level..elite Jews own the U.S. and they literally own you as well..goy.

This is their celestial safe haven and by far the greatest project in their entire history as a people.

They aren't going to let it fall apart just yet. A hundred or even 200 years from now? Maybe..when things devolve more into Latin American chaos.

However, the host is still alive and has blood to give...it must be preserved.
 
Jew talk aside, El Chinito Loco has a point.

For any investments, at this point you've missed your entry window: the time to act was when reports of how bad it was in China were hitting the twitter-verse but hadn't percolated over to wall street yet, and normalcy bias was preventing the players there from acting. That time was two weeks ago, and it's gone now.

At this point, what the hell happens next is anyone's guess. This thing could go anywhere from "Completely forgotten about in 3 months" to "Trump dies of coronavirus and the dow goes to 12000." Nobody knows what the hell we're dealing with, so it's best just to sit tight.
 

Towgunner

Kingfisher
Aside from the inevitable debtcalypse, which I don't think will be trigger by this vol, things are generally pretty good. A lot of people who are calling for a recession in 2020, before convid-19 hit, did so because the "book", economic theory, said so i.e. every cycle only lasts between x and y # of months. A big bias was their disdain for Trump and desire for a recession so he can be defeated in 2020. The book is just a book.

What isn't taken into account was the shit poor "recovery" or "economy" that that shit-dick-fuck tard obama created. Basically 8 fucking years of tepid growth if any. But lots of attention given to people like cross dressers et al. Point, that really wasn't a cycle. So, the real growth has just started and Trump's success hasn't engendered any big imbalances just yet. So, this economy still has legs, in fact, a lot of it. Convid-19 is rightly having an impact. Shit, conferences, events, countries are being cancelled. That will, of course, impact near-term sales and earnings, no doubt.

But, the one thing barry obama did over his tenure was to engender a low interest environment that made it advantageous for a CFO to buy his own company's shares and therefore sustain the value, keeping the shares from going down and appreciating the value of the shares, in this case, equity. They could borrow money cheap to do this if necessary, and the carry cost would be far exceeded by the increase in equity on their balance sheet. In other words, share buy backs paid for themselves. That inflated the market because there was this persistent nominal buyer always there.

So, in 2019 we had a fully valued market. Sure the economy was doing great, but, the market was ahead of it. For a money manager, the problem wasn't so much will it go down, rather, what the fuck can I buy? So, now we have an exogenous unexpected event, convid-19, that is having material impact on the economy, shutdowns et al, and is as good as any excuse for the fully valued market to sell off. I still think there is a ways to go, just by judging from the news cycle. Cancellations have yet to peak. But, this will pass. For fuck sake, the mortality rate is a joke. This is just a bad case of the flu. And once it passes all that freed up capital will come woshing back into the markets like a tidal wave and it will go right back up.

Watch it, track support levels i.e. 50 MDA or 200 MDA and the news, and when the time is right buy a double weighed or triple weighted ETF for the S&P and make a good return for the year.
 
Towgunner said:
Watch it, track support levels i.e. 50 MDA or 200 MDA and the news, and when the time is right buy a double weighed or triple weighted ETF for the S&P and make a good return for the year.

I don't like shitting on other posters, but dude, if you're gonna give advice at least look at the charts first.
We left behind the 200 day MDA at 27000 or so, and now we're heading towards the 200 WEEKLY average according to my chart.

Using bargain-basement TA like MDAs in a pandemic is a joke. Hell, using them in trading at all is a joke, but especially in the middle of an event like this, which is prettymuch the definition of a black swan.
The mortality rate for old people with corona is around 8%. The average ago of a congressman is 60 and there are over 500 of them. How well you think those little blue and green lines you drew on a graph are gonna hold if a senator keels over dead from this thing?
 

Foolsgo1d

Peacock
The industry and bank bailouts are being planned out right now by trump. Free money off the backs of the US tax payers. Trillions of dollars to save companies that should go under.

Too big to fail indeed. This debt will never be repaid and I am sure these bailouts are coming to Europe and other places. What a scam.
 
Foolsgo1d said:
The industry and bank bailouts are being planned out right now by trump. Free money off the backs of the US tax payers. Trillions of dollars to save companies that should go under.

Too big to fail indeed. This debt will never be repaid and I am sure these bailouts are coming to Europe and other places. What a scam.

Disgusting, I would have loved to see so many companies fail
 

Hansel

Robin
The previous several days has seen an unprecedented slaughter of the Dow that is so severe the momentum for further drops has been temporarily stopped. The market has now ended what I call the A wave of reduction and has entered the B wave, a temporary recovery that a lot of investors mistakenly think is the end of the market drop. But this is in fact the calm before the storm, a ploy by the big banks which flee the market after they short the stocks for one last time and noose the loose investors in the market in preparation for the final C wave drop. I predict this B wave will continue until mid April or May. If you want you can try to make some final profits but I advise you to short at early April.

The collapse of the global supply chain will be be evident by that time. Summer of 2020 is also the time where a massive wave of corporate bonds must be repaid, but since the US bonds has sucked up all the mobility in the market, unhealthy corporations such as the shale industry will find itself tethering at the edge yet again. This time it is unlikely the US has the capital to save it, with so many other corporations with a broken capital chain.
 

Coja Petrus Uscan

Crow
Orthodox Inquirer
Gold Member
Lampwick said:
Gework, Japan has negative interest rates and owns 75% of the Japan ETF market. If you had to guess, what are the mechanisms that the U.S. will use to prop the economy up? We are approaching 0% interest rates again, and the 30 year has gone below 1%, so I don't think quantitative easing is much of an option.

I think they will follow Japan.

Negative rates to stimulate economic activity. It will invoke lots of bad decisions, but will keep The US economy growing for another cycle.

Money printing to keep banks solvent and to fund a few years of gaps in the government budget.

It's also likely that Western central banks will start buying stocks in the next ten years. And I would expect indebted companies to get bailed out.

None of this will cause inflation as there will be no significant injection of cash into the economy. As the formula will likely be asset sales to a dollar safe haven, inaction would cause deflation. Considerable stimulus will be needed to keep inflation at a few percent.

The effect of all this is it props up bad markets. Any asset central banks buy takes on a hollowness to its value. It retains its values as long as the bank to maintain its purchases. You can see central bank maneuvers are not the drivers for speculation, not fundamentals. They can never let rates go up again, which leads to cheap money, which leads to bad consumer and business decisions. The effect is to slowly create a weaker economy that is already structurally flawed via aging in particular.

I think the crux of it is the level of indebtedness. On average Japanese pay about 10% of their income on the national debt; while Americans pay about 3%. But when you factor in all debt the US is at more like 15-20% and Japan at 25-30%.

The mechanism of debt is to send bills into the future, with interest. So the central bank mechanism is ultimately to steal from the future for the benefit of the present. With private debt you actually get something: money to grow a business, a house, products. But with government debt you are paying for the past consumption of bribed voters.

The death knell is when people en masse decide its no longer worth servicing the debt that has piled up for their standard of living. Again, they can take their own debt, but for the government debt they get nothing.

By 2030 Western countries could be up to 15% of the government budget being debt, while Japan will be 40%+ at that point. But Japan doesn't have a all the problems of Western countries, such as a growing mob of enraged socialists. The increasing squeeze is going to cause more socialists who are too used to getting things for nothing, trannies and all manner of other angry, disaffected groups.

Even with mounting debts with no chance of repayment the socialists will still be banning the drumb for open border with instant voting rights, free health care, free college and a multi-trillion dollar green new deal.

My take is the game will continue until people will be unwilling to burden the debt. Just as The Soviet Union went down when even the apparatchiks were unable to bare its soul destroying nature.
 

El Chinito loco

Crow
Gold Member
Here's a weekly chart to show where we are at in relation to the 2018 correction. That big red line at the bottom is the 200 weekly MA. It's almost certain that the market will test that support level.



Keep in mind i'm not a daytrader and i'm not into individual stock investments. I don't really care if the market shits the bed right now or not. My only concern is the intermediate and longer term trend.

If all the MA start to roll over hard and this turns full blown bear like in 2008 then there will be lots of money to be made on the way down.

People are already starting to 'sperg out about the market so it should be fun times.

For reference purposes here is what a full blown bear market looks like. I get very nostalgic looking at this particular time period.

 
Putting this here because this is something that not a lot of amateur investors know:
Stocks will ALWAYS rebound significantly from the low after a major fall. Doesn't matter what the stock is, doesn't matter what the circumstances are, they will ALWAYS rebound after a major fall, and usually that rebound will be significant (A stock that dropped 20% the previous day might rebound 5% the next, for instance). It never goes down in a 100% straight line.

This does not mean that they won't continue to fall after the rebound! (Also, you don't know when they'll rebound or how much they'll rebound, so trying to make money off this phenomenon is brutally hard.)

For example, last week we had that huge drop in the dow from 29500 to 25500. But the day after, we had a gigantic gain of like 1000 points! There was a lot of uninformed commentary after the rebound about how the threat was over, Trump had saved the economy, etc.

Nope. A day or two later it went right back down again.

Don't fall for this trap! If you see a rebound after a major drop, it does not mean things are okay! It's just a natural law of the markets, and after the rebound is over it may very well go right back down again.
 

bacon

Ostrich
Gold Member
I know elites are obsessed with numbers. For instance, "in March 9, 2009 marked the bottom for the stock market crash that resulted from the financial crisis. The S&P 500 hit 666 during trading hours that day"

11 years later on March 09, 2020 I think we hit the bottom.

Curiously, the elites seem to love the 11 number.

In Lloyd Strayhorn's numberology book. "Numbers and You" he writes:

"Although the 11 under modern numerology is a master number and represents the highest qualities the original meaning of this compound number under the Chaldean system of numbers is different. In the Chaldean, or mystic system, the 11 offers a warning to the occultist, it demotes hidden dangers and great trails and difficulties."

The World Trade Center took 11 years to build
The World Trade Center stood like an 11
9 + 1 + 1 = 11
September 11th is 111 days until the end of the year
The first plane to hit the World Trade Center was Flight 11
The total crew on Flight 11 was 11
source

Looking at this graph, its highly likely Monday was the capitulation day.

ESxjqEkXkAAM0NB
 

Lampwick

Woodpecker
Gold Member
I just would like to note for those who might've forgotten or weren't aware, SamuelBRoberts and Gework gave good predictions on the crypto bubble as it was playing out. Doesn't mean they're automatically right this time, but it should be noted.
 

Lampwick

Woodpecker
Gold Member
I posted this in the other thread, but I will post it here too, because I think it's important:

Robinhood Maxed Out Credit Line Last Month Amid Market Tumult

In the throes of frantic market uncertainty, traders using Robinhood Markets Inc. faced the ultimate frustration: Their accounts kept malfunctioning. Behind the scenes, the online brokerage was already bracing for financial strains.

Robinhood drew its entire $200 million credit facility from Barclays Plc, Citigroup Inc. and JPMorgan Chase & Co., according to people familiar with the matter. It made the move just as fears of the coronavirus set off more than two weeks of violent market swings and heavy volume, during which Robinhood’s trading platform suffered three significant outages.


“Our capital position remains strong,” the Menlo Park, California-based firm said in an emailed statement, saying the decision to borrow predated and was entirely unrelated to the outages. “We determined it was prudent to draw on our credit line during the week of Feb. 24 in light of market volatility. That capital was returned in full last week.”

It said it’s not unusual for companies to take precautionary measures during such market conditions.


Read more: Robinhood Trading Customers Miss Stock Rally

“Companies don’t tap their credit line unless they need to,” said David Ritter, an analyst at Bloomberg Intelligence, who spoke generally about the issue without commenting directly on Robinhood. When companies do, it’s “perhaps not a good signal with regard to their cash burn, which could make creditors nervous.”

Repeated Outages
In the days since it tapped the line of credit, Robinhood’s platform has repeatedly gone dark for more than an hour at a time, including an outage March 2 that spanned an entire U.S. trading session, in which the S&P 500 surged 4.6%.

Robinhood said last week that a confluence of factors -- record account sign-ups along with highly volatile and historic market conditions -- led to unprecedented stress on the firm’s infrastructure.

That heavy load caused the so-called Domain Name System, or DNS, to fail. The system is essentially the phone book that computers use to turn a domain name into an IP address, and it’s how users access websites around the world.

On Monday, Robinhood faced a fresh breakdown as U.S. stocks plunged. Stocks tumbled so hard they set off a market-wide trading halt minutes after the open. And by day’s end, the S&P 500 was down 7.6%, the worst performance since the depths of 2008’s financial crisis.

“We know this interruption was frustrating for our customers -- especially after last week and on a day that trading was halted,” the company said in the statement. “Our platform is now fully operational and we’re working hard to improve our service during these historic and volatile market conditions.”

The firm declined to comment further on what sparked Monday’s disruption.

Engineering Focus
Robinhood, founded in 2013 by Vlad Tenev and Baiju Bhatt, pioneered commission-free trading, a move that’s since been copied by larger online brokers including Charles Schwab Corp. The startup has attracted 10 million users and is now backed by venture capital firms including Index Ventures, Andreessen Horowitz and Sequoia, garnering a valuation of $7.6 billion.

The company has been increasingly focused on improving the reliability of its service in recent years, and in mid-2018 hired Adam Wolff from Facebook Inc. to lead its squad of engineers.

When Wolff joined, Robinhood’s entire engineering workforce was the size of the group of specialists he’d led at Facebook, he previously said. He has been focused on adding staff and last month hired former Facebook colleague Paul Tarjan.

“An area where we plan to focus is one we continue to invest in heavily as a company -- compliance,” Wolff said in a blog post announcing the hiring. “It’s fundamental to our focus on our customers and our ability to safely and confidently move forward as a firm.”

Shaken Confidence
Software mishaps have rocked Robinhood before. In late 2018, the company’s options trading service had an outage that locked consumers out of their accounts and stopped them from closing positions. Employees had to call affected clients to apologize, according to people familiar with the matter.

For its latest outages, Robinhood has created a dedicated customer service team to work directly with customers, the company said in a statement. The impact among customers “varies significantly due to the nature of our business,” it said.


The latest technology problems have drawn the attention of the Financial Industry Regulatory Authority, which has been in touch with Robinhood on the matter, according to a spokeswoman for the brokerage regulator. The firm previously agreed to pay $1.25 million to the watchdog for allegedly failing to ensure customers received best prices for securities orders. It didn’t admit or deny the allegations when settling the complaint.

Financial technology startups can risk eroding customer trust with outages, said John Bartleman, president of TradeStationGroup Inc., a rival online trading firm.

“If you’re a smaller fintech startup, your reputation is everything,” he said “If you can’t get in, you lose all trust in a brand.”

A growing number of Robinhood users on social media have been reporting trouble with closing their accounts. They’re also criticizing the $75 fee associated with the transferring to another platform.

Pankaj Sharma, a New Jersey IT professional with a $70,000 Robinhood account, said he sent an email to the company when he realized the site was down March 2, but didn’t receive a response until after the market closed. He’s now considering moving his money to a different brokerage.

“It’s really shaken my confidence,” he said by phone.

— With assistance by Olivia Rockeman, Michelle F Davis, and Nikitha Sattiraju

The fact that they recently maxed out their credit line is not a good sign. I also find these repeated prolonged outages suspicious.

In the event that Robinhood turns out to be insolvent, depending on what you're holding your money in, even cash accounts, you may get screwed. There's little upside to staying there since everyone has free trades now, and lots of downside. You can transfer out without selling your positions if you so choose.
 

El Chinito loco

Crow
Gold Member
^^

I think part of that contempt is due to lack of investment. There's no skin in the game so the market is just nonsense to them. It's easy to meme and wish for collapse when you have nothing to begin with. Nihilism and misanthropy is the easy cope in American society.

Most zoomers and even many millenials don't have two pennies to rub together.

Millenials are in their prime earning years at this point but most of the successful ones are probably still knee deep in mortgages or debt.

Boomers are probably sweating bullets tho. I imagine even some Gen X'ers are too. I'm Gen X but I do think that most Gen X are more like millenials in that the vast majority are not financially as well off as their boomer parents.
 

Emancipator

Hummingbird
Gold Member
El Chinito loco said:
^^

I think part of that contempt is due to lack of investment. There's no skin in the game so the market is just nonsense to them. It's easy to meme and wish for collapse when you have nothing to begin with. Nihilism and misanthropy is the easy cope in American society.

Most zoomers and even many millenials don't have two pennies to rub together.

Millenials are in their prime earning years at this point but most of the successful ones are probably still knee deep in mortgages or debt.

Boomers are probably sweating bullets tho. I imagine even some Gen X'ers are too. I'm Gen X but I do think that most Gen X are more like millenials in that the vast majority are not financially as well off as their boomer parents.

Sadly because of these views, Gen X and Millennial who inherit from their Boomer parents are just more likely to squander that wealth.

Good for the GDP and consumerism.

I guess this is by design...
 

Coja Petrus Uscan

Crow
Orthodox Inquirer
Gold Member
I suspect these new-fangled tech-startup-type companies will be the biggest risk in the crash. Companies like RobinHood.

They have become the hot thing for venture capital - a company with an app that is able to suck up market share. The model is pour in billions for years to sustain years of cash burning in the hope that you will end up with a $100 billion+ cap stock that makes 0.5% profit.

Uber burnt about 7% of its valuation last year. In a recession they might need $15 billion a year to stay afloat. AirBnB has a 3% profit margin, while Booking.com is at 20%. A recession will likely take some of theses out.

Another factor that will increase in the 20s is the infestation of far-left ideology at these corporations. Bar women, the diversity and inclusion militia is currently largely reserved to internships. It's voluntary, but they feel the acute need to fluff their numbers by filling internships with people who are only there due to their bunked up test scores. These lefties have largely banned their opposition by saying they are bad. But now the far-left is using the same tactic to push lefties into accepting their position. That is to conflate a meritocracy with punching down. The left have used that against liberals and anit-left/conservatives. Now they have the same attack against the already hobbled meritocracy they support.

They are playing a left wing game against people who will always have a better hand in that game. They will always have a hand that will make silicon valley fops look like they are punching down. Anyone who pushed back against it, while still insisting they are left wing, will be relegated to only producing their ideas on such nasty places as Fox News. All they have is the far-left are a bit stupid and we just need higher taxes. That's a loosing hand on the left. Literally Hitler.

The overtly left-wing corporations are not going to be able to resist diversity at the expense of meritocracy. Don't want the freak show running your board room with post-profit ideology? How dare you?


Meanwhile China's tech is ramping up. They have problems, but they can still grow by just copying The US and doing The US's ideas back to it, better. They aren't going to burn that growth because they can't say no to people who shouldn't be there.
 

Dr. Howard

Peacock
Gold Member
gework said:

That video brightened my morning. That person is like a hyperbole of identity politics that makes it all even more clownish. Black+disabled+tranny?+made up name+how dare you.

Started closing down my robinhood account yesterday.
 
I was looking at the DJI chart earlier and trying to think about what my re-entry signal would be. This is a total spitball post, I'm not making any investment decisions off this logic and neither should you, but spitballing and tossing around theories is how we learn. So here's what I'm currently thinking:

1.) No touch until at least 2 weeks after somebody I trust says the epidemic curve is broken. (Probably somebody like Scott Gottlieb. https://twitter.com/scottgottliebmd)
I don't play falling knife games and I sure as hell don't play them in the middle of a pandemic.
2.) Once condition 1 is hit, I would wait for a golden cross (50 MDA crosses over 200 MDA to the upside.) Right now 50 is higher than than the 200, but if you think it's gonna stay that way you're an idiot.

Just what I'm thinking now, based off of 10 minutes of staring at a chart before bed. Would be interested to hear other member's thoughts.
 
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