Big Market Correction

[Lilly]

First, don't panic. We all knew it was coming and it's a response to inflation, interest rates due to rise and the 'new sheriff in town'  Powell. Things will eventually even out so don't go jumping off of any bridges! 

https://money.usnews.com/investing/investing-101/articles/2018-02-05/what-is-a-stock-market-correction

[Lilly]

Just to add, now is not the time to bail out. If you have decided you just don't have the stones to deal with this stuff please don't pull your money out now (you'll lose big).  Wait until there's a bounce back and then make your move. I've been doing this for years...I've seen people lose out and never recover due to panic moves.

[Farmer77]

1175 points today , I can understand folks getting nervous. 

I understand this is most likely a correction but my inner conspiracy theorist is spinning. The markets hate uncertainty and events like this always make me wonder if some didn't get tipped off to something coming.  

[RavenHawk]

Yes, don't panic.  This is merely a correction and artificial at that.  Yellen fired a parting shot at Trump by raising interest rates.  Every time someone tries to stick it to Trump, they just end up hurting the nation.  This reveals the true heart of liberals.  I saw this coming and somewhere predicted a 1000 point drop in the span of two of three days.  Things will be fine.

[Hankenhunter]

While we're wishing Lilly, I'd like a pony. 

Hank

[Lilly]

19 minutes ago, RavenHawk said:

Yes, don't panic.  This is merely a correction and artificial at that.  Yellen fired a parting shot at Trump by raising interest rates.

Yeah, the interest rates, the inflationary index and just plain old 'things are moving too damn fast so put on the brakes'. The economy is still fine, just give things a chance to settle. 

[Setton]

22 minutes ago, RavenHawk said:

Yes, don't panic.  This is merely a correction and artificial at that.  Yellen fired a parting shot at Trump by raising interest rates.  Every time someone tries to stick it to Trump, they just end up hurting the nation.  This reveals the true heart of liberals.  I saw this coming and somewhere predicted a 1000 point drop in the span of two of three days.  Things will be fine.

Yeah, worst drop since the financial crisis but obviously just a correction, nothing to see here. 

If course, when it was rising, that could ONLY be due to Trump. 

You're right about one thing: this is all very predictable 

[Lilly]

This has to do with Trump because he unshackled business regulations and lowered the corporate tax rate (causing the bull market). The correction took place due to jitters over the interest rate hike, the inflationary index and the new guy Powell. I don't think this is a crash a la 2007...just wait and see is all I can tell you. 

[CeresExpo2000]

41 minutes ago, Lilly said:

Just to add, now is not the time to bail out. If you have decided you just don't have the stones to deal with this stuff please don't pull your money out now (you'll lose big).  Wait until there's a bounce back and then make your move. I've been doing this for years...I've seen people lose out and never recover due to panic moves.

This is where the adviser calls calls you and says:

"If you sell now, your paper loss will turn into a REAL loss."

"Stay in the Stock Market because the fundamentals are very good." 

Edited February 5, 2018 by CeresExpo2000

[RAyMO]

31 minutes ago, Lilly said:

I don't think this is a crash a la 2007

Neither do I - but I think the point is that, if one takes majority credit for the rises, then one also has to accept responsibility for the falls.

In reality - neither position is correct - there are always more factors at play than government policy. And it is even more debatable if such measures are a reasonable reflection of economic strength from the perspective of the individual.  A falling currency can improve the stock and shares, whilst simultaneously making the cost of living more expensive. 

[RavenHawk]

3 minutes ago, RAyMO said:

Neither do I - but I think the point is that, if one takes majority credit for the rises, then one also has to accept responsibility for the falls.

In reality - neither position is correct - there are always more factors at play than government policy. And it is even more debatable if such measures are a reasonable reflection of economic strength from the perspective of the individual.  A falling currency can improve the stock and shares, whilst simultaneously making the cost of living more expensive. 

Trump brought a confidence to the market after 8 years of being artificially repressed.  Janet Yellen, on her way out took a poke at the tiger and caused this correction.  These are the only important factors.  When things settle down, this will just be a bump in the road and we were going to fast.  No big deal.

[Gromdor]

4 hours ago, RavenHawk said:

Trump brought a confidence to the market after 8 years of being artificially repressed.  Janet Yellen, on her way out took a poke at the tiger and caused this correction.  These are the only important factors.  When things settle down, this will just be a bump in the road and we were going to fast.  No big deal.

So if it goes up, it's because of Trump.  If it goes down it is because of Yellen? 

And here I thought it was merely a normal market correction.  (Or should everyone be selling because they are going to lose money because politicians can control the market up and down?)

[RavenHawk]

2 minutes ago, Gromdor said:

So if it goes up, it's because of Trump.  If it goes down it is because of Yellen?

As I explained, in this case, that is correct.

And here I thought it was merely a normal market correction.  (Or should everyone be selling because they are going to lose money because politicians can control the market up and down?)

It was going to have a correction sooner or later.  Yellen pulled the trigger and artificially created it just to get at Trump.  Let's just hope that it doesn't harm some investor out there.

[FFA]

DOW futures are in the red https://www.cnbc.com/quotes/?symbol=@DJ.1 . Hang Seng gapped down at open and is getting hammered, Nikkie too. Much more red on the radar for tomorrow. 

Theres really no major resistance points over 18k. DOW is going to get hammered. 

Edited February 6, 2018 by FFA

[Gromdor]

25 minutes ago, FFA said:

DOW futures are in the red https://www.cnbc.com/quotes/?symbol=@DJ.1 . Hang Seng gapped down at open and is getting hammered, Nikkie too. Much more red on the radar for tomorrow. 

Theres really no major resistance points over 18k. DOW is going to get hammered. 

Yeah, it's going to be rough for a while.  I'm a buy and hold guy though.  My ROTHs are almost ready for my yearly contribution.  Now wouldn't be that bad of a time to buy.

It is annoying to see the values go down.  It took almost a decade to regain the value my 401k and stocks had before the Bush collapse.  But the economy fundamentals are still okay, so I am not too terribly worried about this one.  I'm honestly more worried about inflation and other economy effects over the stock market.

Something that Trump and his supporters forget is that even positive things can bring the stock market down.  Higher wages means higher inflation means interest rates go up which means that Bonds yield more and are safer than stocks for example. 

Edited February 6, 2018 by Gromdor

[GlitterRose]

6 hours ago, Farmer77 said:

1175 points today , I can understand folks getting nervous. 

I understand this is most likely a correction but my inner conspiracy theorist is spinning. The markets hate uncertainty and events like this always make me wonder if some didn't get tipped off to something coming.  

I was saying that very thing today.

[Gromdor]

6 hours ago, Farmer77 said:

1175 points today , I can understand folks getting nervous. 

I understand this is most likely a correction but my inner conspiracy theorist is spinning. The markets hate uncertainty and events like this always make me wonder if some didn't get tipped off to something coming.  

 

1 minute ago, ChaosRose said:

I was saying that very thing today.

Well a major factor is automation:  https://www.msn.com/en-us/money/markets/machines-had-their-fingerprints-all-over-a-dow-rout-for-the-ages/ar-BBIKA21?li=BBnb7Kz

We have computer programs running now that automatically manages the stock market for large companies.  When the program says the numbers are telling them to sell, they sell.  They aren't like humans that hesitate or are willing to ride it out.  We haven't had a drop this big since they refused to bail out Lehman Brothers or since post 9-11.  Obviously nothing terrible happened, just all the computers realized that selling now would save them money.  Computer run-offs basically.

But honestly though, who wouldn't want a computer program that optimizes their cash in the stock market?  It sucks for the poor humans with their 401k's and what not. 

[Likely Guy]

Cheap borrowing rates are gone. Hello inflation.

[Gromdor]

37 minutes ago, Likely Guy said:

Cheap borrowing rates are gone. Hello inflation.

Speaking from a selfish point of view.  A little inflation isn't bad if you have your life expenses under control.  It lets you get greater yields on your investments- like bonds or even a generic savings account.  https://www.investopedia.com/ask/answers/111414/how-can-inflation-be-good-economy.asp

Now if inflation gets out of hand, it is quite bad.  It basically reduces the value of your money.

[CeresExpo2000]

Big Market Rebound

+ 567 on the Dow Jones today!

[CeresExpo2000]

22 hours ago, RAyMO said:

Neither do I - but I think the point is that, if one takes majority credit for the rises, then one also has to accept responsibility for the falls.

In reality - neither position is correct - there are always more factors at play than government policy. And it is even more debatable if such measures are a reasonable reflection of economic strength from the perspective of the individual.  A falling currency can improve the stock and shares, whilst simultaneously making the cost of living more expensive. 

Wall Street Journal put it into perspective.

Feb 2018 1,100 drop was only a 4.6% drop down.

October 1987 drop was down 22% in the Dow Jones.

[Setton]

2 hours ago, CeresExpo2000 said:

Big Market Rebound

+ 567 on the Dow Jones today!

How did His Holy Orangeness manage that then? 

[acidhead]

The federal reserve artificially creates the so-called free market.  It was created to curb low growth and spur growth.  In effect it's responsibility is to avoid a market crash.  What it does is manipulate the market.. create a false interpret of the market as evidenced when the GOV purchased mortgaged back securities known as QE 1 2 and 3. 

Some said the market needed the Stimulus... It was in everybody's best interest

Others said, let it crash.. we learn and move forward wiser

The spending doesn't end.

Doesn't matter if it's Obama or Trump.

 

 

[Hawken]

12 hours ago, CeresExpo2000 said:

Wall Street Journal put it into perspective.

Feb 2018 1,100 drop was only a 4.6% drop down.

October 1987 drop was down 22% in the Dow Jones.

Yes, it was called Black Monday. In Australia and New Zealand it was Black Tuesday due to the time zones.

[Gromdor]

Another thousand down again today.