Is there any evidence that a temporary trading halt will help to stabilize the market?
Trading halted as U.S. stocks plummet
601–610 of 1001 posts
Re: Trading halted as U.S. stocks plummet
#602To be honest , the market was in dire need for correction, BUT wonder where we will be when companies starts reporting their quarterly results and impact of that. So far this looked more like a correction than a precursor to the recession. To make things worse, OPEC dropped bombs which spread the wildfire further..
Why was or is the market in need of a correction? What is your evidence for that statement?
Plot a basic best fit line for the DJIA or S&P 500 over the last 30 years and see where it says we should be in a rational market (about another 10% below today). If you need more evidence, plot a second line showing GDP growth for comparison. The markets have been in an unprecedented situation for the last decade since the Fed cut rates to the bone and then left them there. Effectively, money has been so "easy" that all kinds of weird things have been happening to boost the markets without much actual underlying structural support (actual capital investment, median wage growth, GDP output, etc.).
Re: Trading halted as U.S. stocks plummet
#603Earlier quoted context omitted.
No. This is just one of several places where the laws systematically favor the bulls.
I don't know if that's a good way to look at it. It's not just "bears" selling when you have a big drop. It's people who need the money for something and are worried about liquidity. Trading halts may or may not fix that, but that's their purpose.
> It's people who need the money for something and are worried about liquidity.
Then they're doing it wrong. You shouldn't have money that you need immediately in the stock market. Yes, people will do that anyway, but I'm not sure we should cater to those people when the health of the markets as a whole are at stake (assuming circuit breakers are effective; up for debate).
Re: Trading halted as U.S. stocks plummet
#604For reference, someone might want to post a chart of the gains the markets have made in the past 5 years. I would hardly call this a crash.
The largest daily point loss in the Dow is -1,190. Today we briefly hit -2030. The 19th largest daily percentage loss in the Dow is -7.32%. Today we briefly hit -7.9%. The 19th largest daily percentage loss in the S&P 500 is -7.18. Today we briefly hit -7.2%. If you don't classify that as a "crash," then please state your criteria for us to examine. It may not be a major crash, but it's definitely notable. https://en…
The DJIA is asinine [0], please try not to perpetuate it. Look at any other index instead.
[0]: https://www.investopedia.com/articles/investing/010917/opini...
Re: Trading halted as U.S. stocks plummet
#605The market was up over 30% last year, but GDP growth was certainly not 30%.
What's your point? Those two numbers do not directly correlate.
It's called the "Buffett Indicator" – the US market cap divided by the US GDP. It peaked before the dot-com bubble burst, and before the 08 recession, and has been at its all-time high recently.
https://finance.yahoo.com/news/buffett-indicator-signals-war...
Re: Trading halted as U.S. stocks plummet
#606Earlier quoted context omitted.
The index has become a bubble in of itself. It's also not as diversified as you would think when Microsoft makes up 5-6% of the S&P and over 10% of Nasdaq.
So then purchase and overweight small and mid-caps and international indexes if you think that SPY is top heavy. You don't need to deviate from index investing just because a part of the index is outperforming the rest. Choose an allocation, stick to it, rebalance when you hit some threshold.
I don’t want to buy the index?
Re: Trading halted as U.S. stocks plummet
#607Re: Trading halted as U.S. stocks plummet
#608Genuine 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.
When you think about it, the whole market sort of follows these arbitrary-seeming rules. The actual prices of stocks are constantly changing 24/7/365, but the market is only open from 9:30am-4:00pm on weekdays excluding holidays.
> The actual prices of stocks are constantly changing 24/7/365
They are not. For any meaningful interpretation of "actual", the only price is the market price during trade hours. Speculative overnight agreements between private parties at agreed-upon values are contract agreements. The stock price doesn't change between market close and open.
Re: Trading halted as U.S. stocks plummet
#609Earlier quoted context omitted.
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.
This.
It was really just insurance. I fully expected the $1k I bought to expire worthless, and the first $230 did, but these ones I was able to exit for a nice profit.
I highly suspect the expected value of options trading is negative, but it's useful as a hedge. Really wish I could spend like 10% of my salary on put options for my employer in case I get laid off, but it's forbidden apparently.
Re: Trading halted as U.S. stocks plummet
#610Earlier quoted context omitted.
If you're not yet close to retirement, what happens today in the markets will have almost no effect on what your portfolio looks like in 10, 20, 30 years. Making any big changes would be stupid. Maintain a diverse portfolio and basically forget it exists outside of maxing it out every year. This is especially true if you're lazy and have it all in something like a retirement target fund like Vanguard.
Vanguard retirement funds do exactly this for you, what are you talking about?
Yes I mentioned Vanguard, and in fact have a good amount invested in their retirement funds. OP is saying to pivot based on recent news. Those retirement funds adjust on a scale of 40-50 years whereas OP is looking at a month of activity, possibly even just today's 7% drop.