The 2020 Stock Market Crash Thread

[Coja Petrus Uscan]

The moving day average, MACD and RSI are all at the point where they could be a great buy or sell before the real storm moment.

I think the best metric to go by is RSI. With one week candles, before this highly central banking driven market ('08 onward), any time the RSI was around 30 was a buy. Now you are looking at RSI 15-20 being your buy.

The MACD moving average looks like it has more to go down. Comparing it to the Christmas '18 correction it looks like this has about 1 month more to go down.

I am steadfastly waiting for 15-20 RSI as the buy signal. Just wish I bought more bonds when they were cheap. The level of economic growth, millennial woes, rustbelt decline etc. don't warrant these stock prices. It' going to have to hit real lows to clear out the most exuberant and reckless investments of our lifetime.

 

[Tail Gunner]

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

I agree. Dealing with such firms is an unforced error. Just like the case of a bank, where you do not want to rely on FDIC insurance but on the actual financial strength of the bank, you want to rely on the financial strength of the broker rather than SIPC coverage. Importantly, SIPC coverage comes into play only when a firm shuts down because of financial circumstances in which customer assets are missing -- because of theft or unauthorized trading -- or are otherwise at risk because of the firm's failure.

https://www.fool.com/investing/brokerage/2014/05/11/what-sipc-does-and-does-not-cover.aspx


I recommend that you consider one of the large brokers listed on the exchanges with the most clients and the most client assets -- and therefore the greatest financial strength. For example, Charles Scwab and Fidelity. Those two firms hold more than $10 trillion in client assets between them.

https://www.investopedia.com/articles/professionals/110415/biggest-stock-brokerage-firms-us.asp


Schwab has incredible customer service, which is very helpful for novice investors. I can also recommend Schwab Bank. You can send a wire transfer domestically or overseas right from your account.

 

[KMK]

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.

Big brain play right now is to hold cash and time the flip to calls instead of trying to fomo into puts.

 

[Athanasius]

What a year this has been so far. The virus, emptying stores, and a man with dementia about to win the Dem nomination.

May God have mercy on this country, though we don't deserve it.

 

[SamuelBRoberts]

Big brain play right now is to hold cash and time the flip to calls instead of trying to fomo into puts.

Agree with the logic of not playing with puts, but you're a brave man if you want to start playing around with calls right now.

 

[KMK]

I'm nowhere close to buying any calls at the moment. :s

It's just the focus for my next entry. Until I think the time is right I am cash gang.

 

[El Chinito loco]

People need to think of a major correction like an intersection. The market is the car and it can go in any direction at that intersection and that direction has yet to be determined at this point.

It's unwise to start making plays when that trend isn't even clear yet.

 

[Tail Gunner]

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.

Exactly my sentiment from a few days ago:

https://www.rooshvforum.com/thread-60358-post-2066335.html?highlight=Erian#pid2066335

 

[Dr. Howard]

What happened to bitcoin? down 22%, did everyone trade it in to hoard toilet paper?

 

[SamuelBRoberts]

It went down because everything's going down.

At least the "Bitcoin will rise in the event of an economic collapse!" theory is totally dead now. Bitcoin correlates with other asset classes, it doesn't move on its own. Can finally put that one to rest.

 

[joost]

It is hard to predict the future, but right now we're getting screwed!

My blue chip stocks are down 2%, 3% for the year. But my portfolio in average is -20%! I'm running out of ammunition trying to buy the dip. My high yield stocks are getting hammered.

 

[Hansel]

I don’t think it has reached the bottom. Europe is a bomb about to explode, and when it does, things are gonna be worse. Unless you’re planning on holding for an extended period of time I don’t think you should go for that. It’s futile. Don’t let the potential short term gains fool you. Save your cash for at least a couple more months.

 

[It_is_my_time]

I have a lot of cash in my pension plan from work, so I moved some of it into large cap stocks (75% of what I moved) and then 25% into International. I only moved about 8% of my cash this time. If the Dow gets under 20,000 I will move another 8%. And then every Down dip of 2,000+ below 20,000 (18k, 16k, etc.) I will keep moving in 10%. I can't touch this money until I am 59 1/2 anyway.

This could be once in a life time buying opportunities. If the Dow gets to 15,000 I am going to my broker and writing a check for about as much as I can afford to take cash from my savings and put it into stocks.

I didn't move enough in 2008 and have regretted it ever since.

 

[Tail Gunner]

What happened to bitcoin? down 22%, did everyone trade it in to hoard toilet paper?

I wrote about this a few weeks ago. Gold is also down $65 today as investors deleverage.

https://www.rooshvforum.com/thread-60358-post-2063078.html?highlight=gold#pid2063078

 

[It_is_my_time]

What happened to bitcoin? down 22%, did everyone trade it in to hoard toilet paper?

I wrote about this a few weeks ago. Gold is also down $65 today as investors deleverage.

https://www.rooshvforum.com/thread-60358-post-2063078.html?highlight=gold#pid2063078

It appears investors are starting to move into USD or JPY.

 

[Tail Gunner]

What happened to bitcoin? down 22%, did everyone trade it in to hoard toilet paper?

I wrote about this a few weeks ago. Gold is also down $65 today as investors deleverage.

https://www.rooshvforum.com/thread-60358-post-2063078.html?highlight=gold#pid2063078

It appears investors are starting to move into USD or JPY.

Not that technicals really matter at this point, but price busted through the Dow's long-term trend line today -- and the 2008 low. Trading was also halted again earlier today.

Stock trading was halted in early trading after shares plunged. It's the second pause in trading this week amid growing fears about the economic impact of the coronavirus pandemic.

The S&P 500 plunged 222 points, or 8.1%, to 2,519.49 when trading opened on Thursday, triggering a trading halt. The S&P 500 has three "circuit breakers" that kick in when stocks decline by 7%, 13% or 20% in a single trading session. It's the second trading halt this week, following a rout on Monday sparked by fears of the coronavirus' impact.

https://www.cbsnews.com/news/stock-...ing-halted-coronavirus-travel-ban-2020-03-12/

 

[It_is_my_time]

Tail Gunner, can you tell where the investors are going. USD($) appears stronger today. Japanese Yen has been on fire recently. I am guessing that is where the big boys are putting their investments until the smoke clears.

 

[Tail Gunner]

Tail Gunner, can you tell where the investors are going. USD($) appears stronger today. Japanese Yen has been on fire recently. I am guessing that is where the big boys are putting their investments until the smoke clears.

Yes, investors are deleveraging and going to cash. I got a chuckle out of this chart today.

[attachment=43189]


Bear in mind that Ray Dahlio is one of the most successful hedge fund managers on the planet. So, no one can predict the future. That is one of the reasons that I have stressed having an exit plan in place.

Anyone following the "Buffet Indicator" would have been in cash no later than January. Anyone following the Ivy Portfolio signal would have been in cash at the end of February. For a more in-depth look at my prior analysis, you can see my comments here (Post Number 1038):

https://www.rooshvforum.com/thread-74749-post-2066117.html?highlight=portfolio#pid2066117


Here is one of quite a few posts that I made about having an exit plan in place as an investor:

https://www.rooshvforum.com/thread-60358-post-2008169.html?highlight=exit+plan#pid2008169

(BTW: I did not get a single "like" for that sage advice, which tells you the mindset of the average retail investor.)

 

[It_is_my_time]

Tail Gunner, you seem very well informed. I haven't followed stocks as much as the forex markets. I have a plan to start buying Dow below 22k, then 20k and 2k increments on the way down. When it stops going down I stop buying in. I have a decent amount of cash I can't touch anyway. If the Dow gets below 15k, I will take cash in my savings account that I can touch and start buying in with it.

Does this sound legit or am I jumping the gun too much and we might be heading for a Dow of sub 10k?

 

[Sherman]

I have been 100% in cash for several years. I am now looking for an entry point. A trader I follow says when the market bottoms out it is going to enter into a trading range for the next 10 years. In other words, it isn’t going to just bounce back like it did from the 2007 crisis. Once there is a trading range, then you buy at the bottom of the range.