The stock market comeback is another 'failure' as chart analysts grow worried

[Yo_Mama_Been_Loggin]

The fourth quarter got off to a rocky start as recession fears hit stocks, and technical analysts are warning that there could be more downside ahead.

Stocks are poised to open Wednesday's trading day in the red, which would be an acceleration of Tuesday's sharp losses. The Dow fell 344 points and the S&P 500 broke below its 50-day moving average — a key technical indicator — after manufacturing data came in at its lowest level in a decade.

Ned Davis Research chief global investment strategist Tim Hayes remains underweight equities, pointing to a lack of breadth in the comeback in September, as well as slowing equity fund inflows and a failure of the yield curve to steepen. He says that this rally is becoming "another round of failure."

"If the outlook was turning bullish for equities, we would see the major benchmarks breaking to record highs with decisive and broad-based confirmation from breadth indicators...We would see yield curves steepening," Hayes wrote in a note to clients on Tuesday. He believes that all of these factors are "a reflection of waning confidence in the macro environment globally."

https://www.msn.com/en-us/money/markets/the-stock-market-comeback-is-another-failure-as-chart-analysts-grow-worried/ar-AAIa9vc?li=BBnbfcN

But Donny says it's the best ever.

[Wellstone ruled]

1. Someone posted a little Factoide

the other day that is playing into this scenario. Appears the Algorithms run the trading for the first four hours and the last four hours are live traders trading into or out of those computer generated positions.

[GusBob]

2. Read the book "Flash Boys" by Lewis

Wall Street is all a bunch of crooks

[Whiskeytide]

6. Great book. The best passage (and I'm paraphrasing) was...

a quote from an experienced trader that went something like "We use to be leery of the guy named Worthington who showed up in a Bentley. Now we're sacred shitless of the guy named Ivan who arrives in a private jet".

Pretty prophetic.

[Wellstone ruled]

7. Oh how I know how that game is played.

Had one of the Flash Boys as a Business Account for ten years. His Shop parking lot was a cross section of every exotic auto ever made. Employee Lunch Room was stocked with the little extras besides Coffee and Donuts.

[empedocles]

3. Note on the linked chart the double top at mid month. Traders were not waiting with

baited breath on the 50 day moving average. Easy to see several downward trends on the chart. The stagnant trend channel goes back months, augmented by various economic stats.

[Frustratedlady]

4. I am thinking of investing with this downslide.

Is that wise or dangerous? Trump World is an unknown.

[lastlib]

9. I would wait to buy--more downside ahead.

Election years historically tend not to be good for equities.

[empedocles]

5. Trading perhaps, recommend against investing.

[Frustratedlady]

8. I assume you don't think we'll get a rise out of this one?

I've been waiting for a downturn and was hoping this was political, not recession-related. Is that wrong? Are you expecting this to continue into a deeper downturn? Am I totally stupid? BTW, this is not money I can play with. I am trying to invest before the end of the year, but do so responsibly.

[lastlib]

10. Before making any suggestions, I would want to know....

what is your time horizon, and how much risk would you tolerate? For short term time frame, low-risk tolerance, you would likely do better in short-term bonds rather than equities. My humble opinion.

[Frustratedlady]

11. I probably shouldn't get into a high risk situation, but time is limited only by

my demise. I just need to invest before the end of the year, rather than having it in the bank. We aren't talking a large amount, but I was hoping to get into a situation where the market would shoot back up. Sounds like this isn't that time.

[empedocles]

12. Markets will fluctuate, sometimes upward, likely at some point not too far away.

In the last 3 trading days DJI down around a hefty 900 points [near 3% if you 'invested' last Wednesday]. as of 2p today. Part of months long trend. You could buy treasury notes or bills with very minor downside risks, bills would very likely show some gain. Or, buy an old reliable blue chip dividend stock, would be likely limited risk looking at year end.

You could get on phone with your stock broker, and have him call you at what he considers to be a decent buy in point for a stock, and likely sell point before year end, - if that's what you need.

Even if this market is more political than economic, the trend is bearish and you are betting with or against pro's I the shorter terms.

It seems like a good time to go with the trend, imo, and buy a bear mutual fund. Market is very high PE ratio. Be prepared to hold. May well be profitable, if you don't feel you have to sell for awhile - 6 months perhaps. [Watch out for front end load fees. Vary from one fund to another, though if you have mutual fund investments, with a bear fund in the family, they may waive the fee].

Seems to me like a generally good time for a buy and hold bear fund - though let this drop play out. Bear funds not only invest on broad market trends, but also weak stocks, which go down more reliably and sometimes faster than the market indices. They are very likely to go up at some time. You can sell at any time, including any time you see a profit.

You don't need a broker, you can look at the funds in Morningside, etc., and talk to them. Iraroth rollovers are may be good if you can. If you decide, they will take your account numbers and do most of the transaction for you. You just authorize.