Im not saying there will be a crash, I just remember in 2000 the nasdaq started falling and a few leaders held on but only to fall as well. As the nasdaq was falling investors were pouring money into dow stocks, financials, and oil stocks. Eventually the dow sold off. Just wondering if any of you veterans see any similarities with todays action?
Do remember the 2000 dot com crash. I have a number of open long positions now, so decided to hedge my positions by taking short positions to balance it out. The way I figure it, the stockmarket will crash at some point. I just need to be positioned to cash in when it does. If it rallies instead, I have my long positions as well.
That's kinda how it usually works. Remember how in 2000 the A/D line was falling away while "the market" kept moving higher... people were "selling everything" to concentrate their bets in the "still leading" stocks... and they started telling us how bullish it was that the breadth was "narrowing"? More and more money moving in to fewer and fewer stocks = bullish? Notice how in 1999 there was acceleration up in the techs while utilities declined... people selling everything to chase the performance tech. Then in 2000, the Nas started to decline while the Utils began to climb. People getting defensive. We might all keep an eye out for something similar this time around.
what nonsense is this?!?!? a decade ago, the market crashed. the charting software and trading platform froze due to extremely high traffic. candlesticks were extra long. investors from Asia, the middle east, Africa, Europe, North America, South America were sooo desperate to dump their stocks. today's volume is rather low. the charting software and trading platform don't freeze.
The monetary policy and yields were different, though. Plenty of dip buyers with deep pockets ready to buy any dip.
Yields will only matter for the TINA (there is no alternative) stocks. Decent yield, high growth. Do you think MSFT is going to put in another 50% year in the next couple of years.
My take is we will start seeing downgrades of very loved stocks as well as the lowering of price targets. They usually do this at market highs or as the market is rolling over to save face. I noticed a few yestraday where the analyst called it a “ revaluation based on the expectation of a higher interest rate environment”.
The Tech Wreck is the event that changed me from an investor to a speculator. I didn't like the feeling of watching my liquid net-worth get cut in half. The focus changed from how much can I make to how much can I lose. The number one priority became protection of capital.
When the Federal Reserve starts raising interest rates, that is likely the catalyst to a stockmarket crash. Profit margins at companies are likely, to be squeezed due to less orders coming in due to inflation and higher costs. Restaurants and leisure activities probably, will take a huge hit. Necessities probably, will be priority when you have limited monies to spend and the prices of groceries keep rising. The same goes for medications.
I know there is a manager at MSFT and his only job is to make other employees 'believe' they could double the entire company turnover worldwide.