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Trading halted as U.S. stocks plummet

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Re: Trading halted as U.S. stocks plummet

#571

Serious question, is anyone watching this carefully and trying to determine when things will bottom out (perhaps in a week or two), to buy stocks, ETFs, and such at the bottom of the dip? Hindsight is 20:20 of course, but there's a number of equities that one could have purchased shortly after the 2008 financial crisis that proceeded to make significant gains between 2009 and 2019.

Inbalances accumulated over the course of a decade of free money likely won't resolve within 2 weeks. There is a lot of junk and baseless speculation that still has to wash out. Many people will hold for a time in hope it's just a blip and goes right back up. When these give up and flush out, then things are nearing support and the market has a solid base from which to rise again.

My (non professional, this is not financial advice) opinion is it will take awhile (at least 3-6 months or so) for everything to shake out and reevaluation to occur.

Re: Trading halted as U.S. stocks plummet

#572
post #565

Earlier quoted context omitted.

A few weeks ago, I spent $730 to buy 73 SPY put option contracts expiring this Friday with a strike of $270, so about 10 cents per share. Unbelievable. I've been selling them over the last week and just finished getting out today with a realized gain of about $30k. Wish I had put $50k in instead of $1k, but I suppose that's always the lament when an ultra-risky trade goes your way :)

Teach me your ways. Literature ?

If the news says "China puts 760 million people on travel restrictions", you should look at the price of puts.

Re: Trading halted as U.S. stocks plummet

#573
post #566

Earlier quoted context omitted.

Because bulls and bears aren’t equal. The laws should be favored towards not destroying the economy needlessly.

Because extremely bull markets are a strong indicator of a bubble the laws should be equal to prevent bubble bubble bubbling.

Are they? The market reaches all time highs almost every year, so would you say that we spend most of our time in bubbles?

It is actually expected that the market will typically go up, not down. Otherwise there would be no difference between investing and gambling.

Re: Trading halted as U.S. stocks plummet

#576

Earlier quoted context omitted.

No. This is just one of several places where the laws systematically favor the bulls.

Because bulls and bears aren’t equal. The laws should be favored towards not destroying the economy needlessly.

This isn’t the economy

Re: Trading halted as U.S. stocks plummet

#577
post #315

So, children of summer (there are many here who have only known the longest bull market in the last century), let me give you some free advice. If you're looking at this and wondering when to get in, to bargain hunt essentially, and you're asking yourself questions like "today? next week?", you need to step back and think again. Some points to consider: - If your time horizon is 10+ years out probably none of this ma…

If your time horizon is 10+ years out, make like your 401k and invest on schedule regardless of whatever the market is doing. (Though you might want to rebalance if no one is doing that for you - i.e. if you handpicked your stocks)

And I would reword the 5+ year rule as: don't put any money in the stock market that you think you might need within the next 5 years.

Re: Trading halted as U.S. stocks plummet

#578

Genuine question: They can just do that ? Issue a trading halt because they don't like the direction it's going ? > “There’s a reason why they have those circuit breakers -- it’s to give people time to come back from panicked feelings,” Seems strange that the market is kinda able to be manipulated like that. I'm not saying this is a bad move, just surprised that someone can do it.

There's a great book on behavior like this, "Extraordinary Popular Delusions and The Madness of Crowds" by Charles MacKay. It was first published in 1841 but feels like it could have been written today. McKay was editor of The Illustrated London News in 1850's.

https://www.amazon.com/gp/product/B081ZD9CL1/ref=dbs_a_def_r...

Re: Trading halted as U.S. stocks plummet

#579
post #405

Earlier quoted context omitted.

Trump's shaky ground? Or everybody since at least the turn of the century? (Also, note that Trump doesn't get to run deficits. That's Congress's territory.)

Wait what? The administration decides the spending that Congress can approve or reject. Trump was absolutely pushing for the tax cuts when Repubicans had control of the House. Why is no Republican harping about the deficit now? I can understand if the deficit was due to infrastructure spending but giving Zuckerberg a tax cut is not going to help the economy.

I can think of a couple of reasons.

1. Many people do not care about the deficit to a great degree on either side of the political aisle. This despite a lot of rhetoric by one party or another.

2. The party in power seems to always find a way to blame their predecessor for their ills. I've personally seen Trump supporters blame immigration for the current rising deficits.

Re: Trading halted as U.S. stocks plummet

#580
post #379

Earlier quoted context omitted.

* It's very difficult to sell a market to zero, but impossible to buy it to infinity.

Has any stock or financial instrument ever been valued at infinity? I don't know enough about finance to rule that out and it seems unlikely but at least possible. For instance here is a toy example of unbounded value: Consider a market for a stock in which the only market participants are two bots with the behavior that they trade the stock back and forth at an asymptotically increasing price. The buys are backed by…

No. Money is a scarce resource and modern algorithmic trading has limits to prevent another LTCM.
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