Market update

E

Enscheff

Well-known member
I'm no financial titan like our good buddy sturg with his army of imagined subordinates and crypto wealth, but here's how the 12 month total margin debt rate of change is stacking up against the previous 2 major market corrections since it peaked at 0.04+:

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We can see indication the bear rally was just that, but I must admit I had my concerns. This ROC plunge appears to be a bit less steep than previous ones, so it might last a bit longer than the October timeframe I originally speculated.

I plan to start limping back in the market when this metric hits -0.04, but I may lose my nerve when SP500 hits 3500.
 
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There is no precedent to compare the current global economy to.

MMT destroyed all norms.
 
thethe said:
There is no precedent to compare the current global economy to.

MMT destroyed all norms.
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I understand this is the latest meme you have stuck in your head, but there is nothing unprecedented about this downturn.

For folks who are interested in things other than maga talking points, I’ll keep updating the metric I’m tracking.
 
nsacpi said:
I'm targeting 3000 on the S&P but would probably be tempted at 3200.
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I think that’s a reasonable range for the bottom, but I’m really trying not to let the actual market number dictate my moves. When the rate of change metric hits -0.4 I’m pushing back in.
 
After selling 50% of my equities at 4800, I'm having a hard time not pushing some back in now that it's under 3600. I feel like my FOMO is going to kick in very soon.
 
Which by the way is probably a decent bet to happen

Fed has to decide what is worse... Rapid inflation or depression level economy.

They will give in
 
sturg33 said:
Which by the way is probably a decent bet to happen

Fed has to decide what is worse... Rapid inflation or depression level economy.

They will give in
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I mean, your the smartest financial expert posting around here with an army of engineers reporting directly to you and a fortune based on bitcoin, so if you say so it must be true...

Everyone else seems to think they will raise by 1.5 by the end of the year, but I'm sure you know more.

As for me, I'll have an updated ROC number within the week, and will be making my call then.
 
Enscheff said:
I mean, your the smartest financial expert posting around here with an army of engineers reporting directly to you and a fortune based on bitcoin, so if you say so it must be true...

Everyone else seems to think they will raise by 1.5 by the end of the year, but I'm sure you know more.

As for me, I'll have an updated ROC number within the week, and will be making my call then.
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Hiking an additional 150 bps isn't going to cool inflation to their target.

They either have to wreck the economy or start easing. I don't think they have the stomach to pull a volckler
 
The 12 month margin debt ROC metric I'm tracking hit -0.3 in October, then ticked back up ever so slightly to -0.02987 last month. We may have seen the bottom of the SP500 in October, and I'm starting to regret not pushing some chips back in somewhere around 3600. The dotcom burst saw the SP500 bottom a few months after the 12 month ROC bottomed, but those metrics coincided almost perfectly during the housing bust, so it's hard to call. It's also hard to definitively say -0.03 was the ROC bottom, and equally hard to determine how much of the impending (small? big?) recession is already priced in...which is why I don't base decisions on that.

I always knew it was going to be hard to decide when to jump back in, so I'll probably limp in with $100k-$200k next week just to feel like I'm not completely sitting on the sidelines like a sucker. A sell around 4800 and a buy around 3800 would still be a nice win, even if it does end up at 3000 in early 2023. I don't see anything equal in pain to what I saw during the boom when everyone thought they were stock traders with their Robinhood app on their phone giving me their "expert" advice, so it's hard to think this is the bottom until I see some pain and fear in folks. I think I'll know to jump back in when the same fools showing me their Robinhood app are now telling me about their silver purchases and explaining to me how silver is "real" and stocks are "fake".
 
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