When do we reach the bottom of the dip? (2022-24 Edition)

Do you apply this method?

I see the appeal of this, however, I also see some challenges when the market closes in the EMA:

  1. Do you set a stop loss order tied to the value EMA 30 and how do you do that? Or you need to set it manually?
  2. How then you make sure you get back in in the right moment?
  3. The market will likely be above and under the EMA a bunch of time within the day/week of those touches, so how do you decide it’s effectively the moment to get back in?
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For me indicators are just help to get a clearer picture on the situation. I would never trade on them automatically. I never set hard stop losses with the exception of extremely hyped up situations that most indicators can’t catch (e.g. corona crash or a crypto going parabolic).

I use indicators to screen through my watchlist quickly. If most of them start to turn positive and I see a bottom pattern I scale in. I never go “all in” at once instead I enter gradually, first with a smaller position to gain conviction before investing more. I’d rather miss the bottom than loosing a lot a money.

During a trend reversal I need to observe the situation more closely and exit quickly if things turn bad. Preset stop losses might be not a bad idea here.

xD You can’t make this stuff up.

The US stock market was up these past days, then, on a slightly upward trending August CPI report indicating +0.1% month over month (core CPI, which sets aside food and energy prices, is up 0.6% month over month, so of course inflation worries are warranted, but that was old news already), it went down 3+% and the Fed Watchers, who were previously betting on 91% of a 0.75% FED rate increase (with 9% of 0.5%) next meeting are now pricing in an 18% chance of a +1% FED rate increase.

I mean, how do you go from “inflation has peaked, yolo!” to “well, duh!” in so short a time and who are the people with the money to loose on those bets? It really seems like many market participants have real trouble coming to terms with living in less than euphoric times. There’s the potential for a lot of pain ahead…

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Very true. I can’t even imagine the blood spilt by guys invested in leveraged ETFs right now, e.g. Hedgefundie’s adventure (HFEA). UPRO/TMF have been beaten brutally. The hedge for stocks (UPRO) was supposed to be bonds (TMF), but that didn’t work to well this year I fear :grin:

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Unless stocks or long term treasuries loose 33% in one day, the leveraged ETFs should survive the downturn and resume going up with time when the markets recover. If they’re investing for the long term and have properly assessed their risk tolerance, I wouldn’t worry too much for those investors (which isn’t to say they’ll beat a diversified unleveraged portfolio, volatility decay is a real thing).

The situation in which I really wouldn’t want to be right now is with callable leverage. Outsized margin loans, options, futures,… provided the bets are made in the wrong direction. Outsized leverage can take out our agency when the underlyings face too much volatility.

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We need another 0.84% down to reach June’s minimum, boo :ghost:

image

seems below to me :confused:

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The yearly intraday minimum on the dividend adjusted plot of VT in CHF was on 17.06, afterwards there were two dividend distributions. That’s why the plot of VT closing price in CHF without dividend adjustment shows the yearly minimum today :scream:. But yeah, I agree that it is not convenient and I am looking for a better benchmark, which most probably is going to be MSCI ACWI IMI Net total Return in CHF.

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What had happened yesterday?

The stocks fell not because of the expected 0.75% rate hike, but because future projections have changed. Now Fed signals 1.25% more this year and the maximum at 4.6%. That’s what is moving the market: not the current situation, but what is expected in next 1-1.5 years approximately. If projections change to less tight conditions, markets will rally no matter current inflation and recession.

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Personnaly, I just see “Sale sale sale” just before my paycheck comes in.

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Same here, I’m going on a shopping frenzy :grin:

Same story here, I did the mistake of not buying during the Pandemic Sale, and now I’m not repeating the same mistake again. Although, I’m stressed and nervous as hell.

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My REITs are especially going down the drain. I think I’ll stop buying them and let them become a smaller and smaller portion of my portfolio.

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Definitely hope there’ll be some panic soon, so far we’ve only reached pre-pandemic heights, that’s rather disappointing :grin: Wonder what’s still missing for panic sellers: we’ve got a bear market, recession fears, war, inflation, supply shortages, high energy/oil prices, rising rates…

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For VT, yes. My European REIT is now well below the pandemic bottom. OTOH, the SP500 is still quite a bit higher than the pre-pandemic top.

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I’d put my bet on earnings compression (somewhat happening), layoffs and/or bankruptcies. We may be getting there but the rebounce could also be quick. We’ll have to see.

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just DCA, if you have 10, 15 or even more years time this is a really good opportunity.

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I’m contemplating switching to VOO (SP500) vs VT.

Yes, the SP500 might still fall a lot, but

  • Europe has shot itself in the foot with sanctions, aa larger recession seems inevitable
  • The ECB can’t significantly raise rates as that would kill the Southern member states
  • Africa and potentially LATAM will suffer a food and energy crisis
  • Developing markets will suffer if their motherland (i.e Germany, US) suffers
  • Small cap will suffer (especially non-profitable small-cap) or be killed by high financing needs
  • Asia - not sure what happens there

Thoughts?

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Isn’t it priced in?

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And many US companies might still have exposure to European markets anyway (and vice versa).

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