OFFICIAL STOCK MARKET AND ECONOMY THREAD VOL. A NEW CHAPTER

71
54
Joined Mar 19, 2019
this see-saw game is stupid. tarif! delay! germany! working on deal! trump mad so tariff effective immediately!

how do you short the market?
TVIX is a good play in this volatile market. Trump is a clown, I'll take the short-term market hit to get this joker out of office.
 
17,913
6,985
Joined Oct 10, 2005

Trump begging FED for emergency rate cut. He knows that as the market goes down so do his chances of re-election. He miscalculated very badly, announced China tariffs without realizing how weak the global economy was then had to swiftly back track not even 2 weeks later once stocks fell, exposing how weak his position is to China and Xi.

I feel like he did that to try to force the FED’s hand with a bigger rate cut.
 
2,198
1,763
Joined Oct 16, 2010
Tmf is bid. What does this it mean though? I’ve never learned about bonds and t bills.
TMF is 3x leveraged ETF of TLT which is the ETF for 20 year treasury notes.

To put it simply, when rates go down the underlying price of bonds goes up and vice versa. When Powell and the Fed switched policies in December from hiking to cutting it sent treasuries rallying. Now with rates declining around the world and some talk of the Fed having to cut rates all the way down to zero, bonds have been on fire. The trade is getting very crowded now, so I'd be careful of any sudden spike in rates for whatever reason, but all signs right now point to continued rate cuts and higher bond prices. It's a very good hedge to have going into a potential recession.
 
2,198
1,763
Joined Oct 16, 2010
Great to know. Can you shed some light on bonds? Why they go up when rates are cut and what they track as a vessel?
Bonds are a vast topic and underappreciated, I'm far from an expert, I haven't been watching bond markets closely until the past 1-2 years when I learned just how profitable they can be and how important they are to the economy. The bond market is vastly larger than the stock market as a whole.

There are all different kind of bonds but for now let's talk about US government bonds. Not long ago you could get a 2.5% return on the 10 year note, but with the downward pressure on rates this is now down to 1.5% or so. Naturally when you have a bond returning 2.5% while newer bonds are returning 1.5% your bond is more valuable and more in demand compared to the newer bonds thus its value goes up in direct proportion to the higher yield yours is priced at. So lower yields raise bond values.

Inversely, if rates were to rise back to 5%, the old bonds you are holding at 2.5% are now less valuable than ones yielding 5% thus if you want to sell your lower yielding bonds you would have to cut the price to get someone to buy it, making bond price go down with higher yields.

Yields are subject to the FED funds rate, as well market pressures. People rushing to buy bonds like they are now puts upward pressure on bond prices and downward pressures on yields. So many more people are rushing to buy 10 year notes compared to 2 year notes that the yield of the 10 year note is now LOWER than the yield of a 2 year note (inversion), which is obviously not normal and signals significant problems ahead.

Bonds are typically looked at as boring and for older people, but the 20 year note has actually outperformed the S&P over the past year (check TLT vs SPY)
 
Last edited:
17,913
6,985
Joined Oct 10, 2005
TMF is 3x leveraged ETF of TLT which is the ETF for 20 year treasury notes.

To put it simply, when rates go down the underlying price of bonds goes up and vice versa. When Powell and the Fed switched policies in December from hiking to cutting it sent treasuries rallying. Now with rates declining around the world and some talk of the Fed having to cut rates all the way down to zero, bonds have been on fire. The trade is getting very crowded now, so I'd be careful of any sudden spike in rates for whatever reason, but all signs right now point to continued rate cuts and higher bond prices. It's a very good hedge to have going into a potential recession.
Bonds are a vast topic and underappreciated, I'm far from an expert, I haven't been watching bond markets closely until the past 1-2 years when I learned just how profitable they can be and how important they are to the economy. The bond market is vastly larger than the stock market as a whole.

There are all different kind of bonds but for now let's talk about US government bonds. Not long ago you could get a 2.5% return on the 10 year note, but with the downward pressure on rates this is now down to 1.5% or so. Naturally when you have a bond returning 2.5% while newer bonds are returning 1.5% your bond is more valuable and more in demand compared to the newer bonds thus its value goes up in direct proportion to the higher yield yours is priced at. So lower yields raise bond values.

Inversely, if rates were to rise back to 5%, the old bonds you are holding at 2.5% are now less valuable than ones yielding 5% thus if you want to sell your lower yielding bonds you would have to cut the price to get someone to buy it, making bond price go down with higher yields.

Yields are subject to the FED funds rate, as well market pressures. People rushing to buy bonds like they are now puts upward pressure on bond prices and downward pressures on yields. So many more people are rushing to buy 10 year notes compared to 2 year notes that the yield of the 10 year note is now LOWER than the yield of a 2 year note (inversion), which is obviously not normal and signals significant problems ahead.

Bonds are typically looked at as boring and for older people, but the 20 year note has actually outperformed the S&P over the past year (check TLT vs SPY)

Appreciate the info, man! :pimp:
 
2,198
1,763
Joined Oct 16, 2010
Some data just released, everyone focused on the good retail sales number but jobless claims are also up more than expected :nerd:
 
69,736
16,138
Joined Apr 4, 2008
Added some money to my options account. Hopefully it clears by tomorrow. If so I’m looking at uber and sq puts. Preferably sq as the priority since uber has nickel wide spreads.
 
2,198
1,763
Joined Oct 16, 2010
“Buy bonds, wear diamonds”

Been as simple as that for months now. Crazy profits today, just watching carefully for the trend to end.

For all the talk, the market is not down by much off the highs, yet these safe haven assets keep inflating, either a serious drop in markets is coming, the bond market is wrong and we see another market rally, or both are inflating into bubbles... the last option is looking more and more plausible to me. Insane world we live in, central bank policies have created ticking time bombs everywhere you look.
 
69,736
16,138
Joined Apr 4, 2008
Money didn’t clear which is a good thing. Wouldn’t have been able to get much off on those shorts.

Saw this earlier which is interesting.
upload_2019-8-16_12-0-8.jpeg


Can def see the market going higher for a little bit longer and then a blow off top. All the CNBC fud is a bear trap for right now.
 
2,198
1,763
Joined Oct 16, 2010
Some timeless market wisdom:

1. Markets tend to return to the mean over time.

2. Excesses in one direction will lead to an opposite excess in the other direction.

3. There are no new eras – excesses are never permanent.

4. Exponentially rapidly rising or falling markets usually go further than you think, but they do not
correct by going sideways.

5. The public buys the most at a top and the least at a bottom.

6. Fear and greed are stronger than long-term resolve.

7. Bull markets are strongest when they are broad and weakest when they narrow to a handful of bluechip
names.

8. Bear markets have three stages – sharp down, reflexive rebound, and a drawn out fundamental
downtrend.

9. When the experts and forecasts agree, something else is going to happen.

10. Bull markets are more fun than bear markets.

11. Though business conditions may change, corporations and securities may change, and financial institutions and regulations may change, human nature remains essentially the same.
 

wr

9,261
6,398
Joined Mar 4, 2011
Father if the 30 year bond futures launches interbank lending alternative.
 
9,231
2,175
Joined Mar 13, 2008
Money didn’t clear which is a good thing. Wouldn’t have been able to get much off on those shorts.

Saw this earlier which is interesting.
upload_2019-8-16_12-0-8.jpeg


Can def see the market going higher for a little bit longer and then a blow off top. All the CNBC fud is a bear trap for right now.
I've seen that analysis before. If this market went up another 33%, the drop would be epic and devastating to a lot of people.
 
Top Bottom
  AdBlock Detected

Sure, ad-blocking software does a great job at blocking ads, but it also blocks some useful and important features of our website. For the best possible site experience please take a moment to disable your AdBlocker or head over to our upgrade page to donate for an ad-free experience Upgrade now