Seems like we were in a bear market rally. Actually curious to see whether we were in fact or we won’t retest June’s lows.
I am keeping some dry power available…
1 Like
I’m actually thinking about buying some SPX calls if we reach june/july’s lows again. I know, it’s clearly gambling and market timing, but just with some minor play money that wouldn’t hurt losing.
Curious if anyone would strongly advise against this 
?
1 Like
Actually I won’t. Options are perfect for this kind of bets: limited downside, much higher upside. Just buy options deep out of money and far away from the expiration date.
1 Like
And, most importantly, there is SPX options chain (100xSPX) and XSP (10xSPX) 
XSP I didn’t know. I guess SPX still works better for gambling
1 Like
The Fed fund futures now see rates peaking in the April to June period at around 3.7%. Additionally, the futures show only a minimal decline in rates until October.
Probably one more year of pain.
Larsson line indicator says:
MSCI World: Bearish
SMI: Inconclusive
SP 500: Inconclusive
I am still waiting for a clear pivot
4 Likes
@kraphael, pls keep us posted.
I liquited some long positions as I turned a little bearish. I see:
- situation in EU very bad due to high energy prices and ongoing conflict in UKR
- UK inflation and GBP devaluation very serious
- US is in a very good employment situation but RE is cooling down and we will see if inflation is abating or not
- energy costs are out of the roof everywhere - margins will get squeezed for everyone unless companies are able to raise prices - which it’s not always possible
I will continue to DCA into VT as always but ready to lump sum into 3x ETF if we re-test June lows
1 Like
3x SPY would have been amazing looking back, UPRO would’ve converted 10k into 382k since inception 2009. But I wonder if there’s too many guys on this leveraged lambo by now. Will hurt a little if the market goes sideways (volatility decay) or even down for the next decade…
1 Like
we have -1% for August so far. 3 more days to go.
the “June lows” were not even touching the weekly 200MA, so I would not call that a “crash” per se.
Big crashes so far (which is long overdue now) have always crashed 20% or more below the 200MA line.
(crystal ball mode ON)
I’ll probably double up below SPX 3550, triple up below 3000 and 4x at around 2600 where the end should be based on historic valuations
(crystal ball mode OFF)
4 Likes
I also plan to take a bigger leveraged bet, probably a 3x Nasdaq ETF (TQQQ), but only after we have bottomed out and have a confirmed trend reversal. Don’t want to be leveraged in a downtrend 
Probably won’t be the case before the FED acknowledges that the deterioriating economy is a bigger problem than inflation and starts QE again (mid 2023?)
Mind to share with the forum when you’ll decide to enter ?
According to the Fedwatch tool mid-2023 should be the tipping point indeed. We could very well be rallying to a new ATH until then.
The two previous crashes had a similar pattern:
- tightening has reached a ceiling which was the time to get out of the market / blow off top ATH
- crashes occured when QE was already way underway and produced a significant loss from there
Right now, we are at a point where we were before the 2001 and 2008 crashes have produced a 40-50% drawdown. But there was no mention of a crash during tightening for the last 25 years…
So… draw your own conclusions 
3 Likes
-2.1% in August and +6.9% from June’s low.
I see people arguing mostly with what they’ve experienced in their lifetime. How about studying past economic crises?
e.g. take the Dow Jones during 3 years from 1929-1932. I will space my dry powder for a long time.
7 Likes
Nothing but paper losses if you didn’t sell. Problem with saving to much dry powder is - as usual - missing the right point to get back into the market (the old timing issue).
Also, I couldn’t be bothered by any market crash and ensuing paper losses since I intend to stay invested for at least another 10 years, if not til the end if my days
3 Likes
As the saying goes: “Buy when there’s blood in the streets, even if the blood is your own.”
Bargains happen when others are unwilling, or unable to buy even as they see the bargained prices. You “just” have to make sure you are, yourself, in a position to keep buying and not selling.
As FIRE pursuers, our high savings rate puts us in a good position, and Switzerland has a good social net. We’re not immune to hardship, though, and sometimes, it doesn’t hit us but one of our closed ones and we may want to help them and end up choosing to sell some assets at a loss to make a difference in their life, just as they would have helped us were the situation reversed.
Edit: By the way, inflation and especially the expected future energy prices are already putting some of the people I’m talking with in worry. We’ve had a news article (in Le Nouvelliste, if I recall correctly, though I may be wrong) pointing toward the SNB potentially going for positive policy rates later this month, which would affect SARON mortgages interest rates. There may be more hardship coming, though it may already all be priced in.
2 Likes
Do you apply this method?
I see the appeal of this, however, I also see some challenges when the market closes in the EMA:
- 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?
- How then you make sure you get back in in the right moment?
- 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?
1 Like
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.