Stock Market Collapse Starts Tomorrow

[Brian4Liberty]

Same liquidation operation that kicked off the 08 crash, also in September of that year. What started the 08 crash was the Vatican pulling massive amounts of cash from US money market mutual funds. It caused liquidity problems and credit markets started to lock up. Remember Dow -777?

https://www.biblestudy.org/bibleref/...bible/777.html

The rest is history.

I’m curious as to how much money they will be pulling out of the markets? 10s of billions? 100s of billions?

[devil21]

I’m curious as to how much money they will be pulling out of the markets? 10s of billions? 100s of billions?

No idea this time but it was, iirc, in the tens of billions range in 2008. Maybe 50? Extrapolating from current market cap, compared to Sept 08, should give a general range I'd think, but I'm going mostly on memory since the original info has long since been memory holed from the net.

Any old timers may remember the "reinhardt" fellow from back then that figured out what actually happened to cause the liquidity problems. Of course, past performance does not guarantee future results but that's a very ominous sign.

[Brian4Liberty]

No idea this time but it was, iirc, in the tens of billions range in 2008. Maybe 50? Extrapolating from current market cap, compared to Sept 08, should give a general range I'd think, but I'm going mostly on memory since the original info has long since been memory holed from the net.

Any old timers may remember the "reinhardt" fellow from back then that figured out what actually happened to cause the liquidity problems. Of course, past performance does not guarantee future results but that's a very ominous sign.

On the bright side, once again we’ll find out how much junk has been hidden in money market funds...will they bust the buck?

[Krugminator2]

Great opportunity for bounce in the markets. QQQ below 300. Oversold short term within an intermediate term uptrend. McClellan Oscillator at bounce levels Put/call spiked yesterday. Even though I am looking for just a few percent bounce, entirely possible this is great entry point for a longer term move up.

[sparebulb]

Great opportunity for bounce in the markets. QQQ below 300. Oversold short term within an intermediate term uptrend. McClellan Oscillator at bounce levels Put/call spiked yesterday. Even though I am looking for just a few percent bounce, entirely possible this is great entry point for a longer term move up.

I hope you are right.

[Krugminator2]

I hope you are right.

No guarantees. Only my opinion based on backtests of overbought and oversold for shorter term holds (less than a week). Still might have more downside pain. And anything can happen. But things look good to me for a close higher sometime in the next week or so

Here is what the next six months *historically* have returned based on what we just experience with the market having such a sharp rally off lows. Not always easy to realize those returns. Sept worst month for stocks . A lot of people infinitely smarter than me disagree. Always have a reason like Fed tightening, QT, recession, etc. But the data tends to win out over opinion.

An alternative view for balance is when the market is down like this through August bad things happen going forward.

short term I think things look good. Anything longer and who knows.

[Krugminator2]

Great opportunity for bounce in the markets. QQQ below 300. Oversold short term within an intermediate term uptrend. McClellan Oscillator at bounce levels Put/call spiked yesterday. Even though I am looking for just a few percent bounce, entirely possible this is great entry point for a longer term move up.

I sold all of this at the close and after hours for a tiny profit. Had a pretty big position and basically determined if it closed at a profit I would sell. Probably shoots higher and I will swear loudly.

A lot of negativity in sentiment which is what is needed for a new bull market. I just don't want to get caught having to hold over the weekend and some crazy thing in Europe happening.

[devil21]

On the bright side, once again we’ll find out how much junk has been hidden in money market funds...will they bust the buck?

Makes one wonder about the reverse repo operation....2.2T sitting in limbo.

https://www.investopedia.com/terms/m...marketfund.asp

Repurchase agreements (Repo)—short-term government securities
U.S. Treasuries—short-term government debt issues

[Brian4Liberty]

Makes one wonder about the reverse repo operation....2.2T sitting in limbo.

https://www.investopedia.com/terms/m...marketfund.asp

Repurchase agreements (Repo)—short-term government securities
U.S. Treasuries—short-term government debt issues

Breaking the Buck

Occasionally, a money market fund may fall below the $1 NAV. This creates a condition that is sometimes referred to with the colloquial term "breaking the buck." When this condition occurs, it may be attributed to temporary price fluctuations in the money markets. However, if it persists, the condition may trigger a moment when the investment income of the money market fund fails to exceed its operating expenses or investment losses.

For example, if the fund used excess leverage in purchasing instruments—or overall interest rates dropped to very low levels nearing zero—and the fund broke the buck, then one of these scenarios could lead to a condition where the fund cannot meet redemption requests. If this happens, regulators may jump in and force the fund's liquidation. However, instances of breaking the buck are very rare.

In 1994, the first instance of breaking the buck occurred. The Community Bankers U.S. Government Money Market Fund was liquidated at $0.96 per share. This was the result of large losses that the fund incurred following a period of heavy investment in derivatives.

In 2008, following the bankruptcy of Lehman Brothers, the venerable Reserve Primary Fund also broke the buck. The fund held millions of the Lehman Brothers debt obligations, and panicked redemptions by its investors caused its NAV to fall to $0.97 per share. The pullout of money caused the Reserve Primary Fund to liquidate. This event triggered mayhem throughout the money markets.

To prevent this from happening again, in 2010—in the aftermath of the 2008 financial crisis—the SEC issued new rules to better manage money market funds. These rules were intended to provide more stability and resilience by placing tighter restrictions on portfolio holdings and introducing provisions for imposing liquidity fees and suspending redemptions.

The new plan to prevent busting the buck. You won't be able to withdrawal your money.

[devil21]

The new plan to prevent busting the buck. You won't be able to withdrawal your money.

Or was it that those rules were only to prevent it happening until a more appropriate time? Clearly the SEC picks and chooses which rules to enforce, when to enforce and who to enforce against. That is the nature of rules, as opposed to natural laws, which are enforced outside of man's control.

[Krugminator2]

Big day tomorrow. Usually pays to buy before a Fed day when the market has sold off into it. Gut feel is it has become too obvious and the market drops. But who knows.

Still think the market fools the majority with a crazy rally into year end. Combination of breadth thrust, sentiment, and fund positioning is favorable for stocks. But thinking it might need to be from lower levels. Maybe a whoosh down the rally the last two months of the year

[devil21]

I hope the FOMC pulls a Volcker and raises 125 or 150. It would fit with Cashin's warning about the equinox.

(JPow, you are no Paul Volcker)

[Krugminator2]

Big day tomorrow. Usually pays to buy before a Fed day when the market has sold off into it. Gut feel is it has become too obvious and the market drops. But who knows.

Still think the market fools the majority with a crazy rally into year end. Combination of breadth thrust, sentiment, and fund positioning is favorable for stocks. But thinking it might need to be from lower levels. Maybe a whoosh down the rally the last two months of the year

Pretty big rally of the initial selloff. Market back to flat on the day. I would have guessed a close of low on the day. Maybe a rally?

Edit: Wild gyrations. Closed exact low of the day.

[Slave Mentality]

Inverted 10/30 year bond yield curves today.

2 year bond over 4% today.

Europe is in full meltdown.

They can’t print their way out of inflation.

Saber rattling of bear and dragon nations.

Looks like a lot of pain coming to me.

[Brian4Liberty]

Pretty big rally of the initial selloff. Market back to flat on the day. I would have guessed a close of low on the day. Maybe a rally?

Edit: Wild gyrations. Closed exact low of the day.

I wish I had sold all of my equities when I started this thread. I bet you do too.

[Brian4Liberty]

Inverted 10/30 year bond yield curves today.

2 year bond over 4% today.

Europe is in full meltdown.

They can’t print their way out of inflation.

Saber rattling of bear and dragon nations.

Looks like a lot of pain coming to me.

The Bond (and CD) market has been crazy (since this thread started). You can buy a 3 month T-bill or CD to be on the "safe side", and by the time it matures, it is paying 2 percent less then a new 3 month. God forbid you locked into a longer term CD or Treasury.

Lock in 4% on a 2 year, and new ones will be paying 4.5% in a month (or less).

[Krugminator2]

I wish I had sold all of my equities when I started this thread. I bet you do too.

I think it is more I wished the only trades I made this year are what I mention on this site.

[devil21]

[Brian4Liberty]

Sadly, another correct prediction.

[devil21]

Sadly, another correct prediction.

Just get short however you can. I like SPX puts, out to March 2023 (next equinox period). Bank short ETFs for risk aversion instead of expensive index options. And a few shares of GME just in case the squeeze happens.

[acptulsa]

Just get short however you can. I like SPX puts, out to March 2023 (next equinox period). Bank short ETFs for less risk aversion. And a few shares of GME just in case the squeeze happens.

Not taking advice from that bronze statue on Wall St? This guy looks wiser.

[Krugminator2]

Just get short however you can. I like SPX puts, out to March 2023 (next equinox period). Bank short ETFs for less risk aversion. And a few shares of GME just in case the squeeze happens.

Hmm... I started scaling into a Nasdaq long and am short GME. Mostly from the breakdown around 28 but added some short in the mid 24s today with a tight stop on the excess.

I think if GME breaks 24 it goes to 18. And I think Monday has the potential to be a once in a decade long opportunity. Will be interesting to see who gets it right.

[devil21]

Hmm... I started scaling into a Nasdaq long and am short GME. Mostly from the breakdown around 28 but added some short in the mid 24s today with a tight stop on the excess.

I think if GME breaks 24 it goes to 18. And I think Monday has the potential to be a once in a decade long opportunity. Will be interesting to see who gets it right.

Dude, seriously, all playful banter aside. Don't short it. You do NOT want to be on the wrong side if/when it runs. It's not worth it. There's too many other ways to make money in this market than playing with GME.

(eta: remember that $68m Ryan Cohen/RC Ventures made from BBBY recently? Guess where that'll go when GME hits his buy low number....and he'll route it through IEX so it can't be routed off-exchange by Citadel)

[oyarde]

At this point it is hard to picture the Dow ending tHe yr above 30K

[devil21]

At this point it is hard to picture the Dow ending tHe yr above 30K

https://www.marketwatch.com/story/tr...nce-2020-11-24

[acptulsa]

At this point it is hard to picture the Dow ending tHe yr above 30K

Not that hard. But then again, at this point it's not that hard to picture a loaf of bread ending the year above $30K.

[Krugminator2]

Dude, seriously, all playful banter aside. Don't short it. You do NOT want to be on the wrong side if/when it runs. It's not worth it. There's too many other ways to make money in this market than playing with GME.

(eta: remember that $68m Ryan Cohen/RC Ventures made from BBBY recently? Guess where that'll go when GME hits his buy low number....and he'll route it through IEX so it can't be routed off-exchange by Citadel)

Just for you I covered half . (Also because it is flat on the day when the market is getting killed and because there is a netflix movie about it coming out next week).

[devil21]

Just for you I covered half . (Also because it is flat on the day when the market is getting killed and because there is a netflix movie about it coming out next week).

Good. It's just not worth the risk man. Obviously I've lived and breathed that stock for the last two years and know the situation with it in-and-out so I don't warn you from it lightly. Or at the very least hedge with a few shares of your own in a different (self-clearing brokerage) account if you insist on shorting it.

[devil21]

S&P500 close on 6-16-22:

3,666.77
-123.22

Probably nothing....

Heh. I just noticed this day was the low before the June-September rally. 616 is the first known numeric representation (in the original greek) of the number of the Beast. 616 not 666. 3777 was hit on 9-22 (equinox). Been downhill from there.

But yeah guys keep on thinking markets are natural and organic instead of completely manipulated and controlled and running on a whole different system than most realize.

Note the S&P is now back below that 6-16 low again.

[Krugminator2]

Good. It's just not worth the risk man. Obviously I've lived and breathed that stock for the last two years and know the situation with it in-and-out so I don't warn you from it lightly. Or at the very least hedge with a few shares of your own in a different (self-clearing brokerage) account if you insist on shorting it.

I gave back more than I should have and no longer am short. You might actually get some follow through to the upside with GME