Dow jones plunges 512 points in one day; nasdaq down 136; s&p down 60

Discussion in 'Politics & Current Events' started by American Brummie, Aug 4, 2011.

  1. celito

    celito Member+

    Palmeiras
    Brazil
    Feb 28, 2005
    USA
    Club:
    Palmeiras Sao Paulo
    Nat'l Team:
    Brazil
    VXRT getting Gov funding for Covid under operation warpspeed. Ran yesterday with no news.

    Nothing to see .... :whistling:
     
  2. song219

    song219 BigSoccer Supporter

    Apr 5, 2004
    La Norte
    Club:
    DC United
    Nat'l Team:
    Vanuatu
    I believe the stock exchanges dropped yesterday largely because of news about increased Covid-19 spread in the South. Aren't the markets supposed to rise with bad news?
     
    American Brummie repped this.
  3. celito

    celito Member+

    Palmeiras
    Brazil
    Feb 28, 2005
    USA
    Club:
    Palmeiras Sao Paulo
    Nat'l Team:
    Brazil
    Market lesson 101 - Markets rarely care about news.
     
  4. y-lee-coyote

    y-lee-coyote Member+

    Dec 4, 2012
    Club:
    --other--
    I think the "recovery" was just a dead cat bounce and I would imagine the stimulus went to buy more stock for those who weren't hurt economically by the covid shutdown.

    For most of the market the next quarterly reports are going to be as bad as we have probably ever seen. There might be some plays to be made using the stock market and inverse of covid. As Covid goes up, markets go down. As the numbers go down, markets go up.

    I don't like shorting, but if ever there was a time to short the S&P or SPY....
     
  5. ceezmad

    ceezmad Member+

    Mar 4, 2010
    Chicago
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    Meh wait until there another stimulus check going to all Americans, many will use that money to gamble on the market.

    So shorting may not pay off.
     
  6. SetPeace

    SetPeace Member+

    Jun 22, 2004
    SC Illinois
    Club:
    Torquay United
    Nat'l Team:
    United States
    Facebook stock dipped 7% today after Unilever said it was pulling all advertising from there, as well as Twitter and Instagram. The company accused the social media platforms of doing little or nothing to stem the constant hate speech coming from some of its users. Unilever said it will suspend advertising for the rest of the year and re-evaluate its position at the end of the year. Other companies have pulled ads over the issue too, but mostly just through the month of July. There is also a rumor that another major advertiser, Procter and Gamble, is considering doing the same as Unilever, but P & G officials have not said anything about it yet.

    I think this is a great idea. I've long held that hate speech is not free speech. If platforms like Twitter and Facebook get hit in the wallet or pocket book over this development without cracking down on insensitive, hateful users, I say kudos to those corporations that have consciences.
     
    spejic, ChrisSSBB and MattR repped this.
  7. MattR

    MattR Member+

    Jun 14, 2003
    Reston
    Club:
    DC United
    Nat'l Team:
    United States
    I'm going to be honest, there is a religion in the United States, and that is to the almighty dollar. Advertising is facebook's lifeblood, and as corporations sign up to abandon facebook and embrace BLM, change may yet be coming.
     
    ChrisSSBB and SetPeace repped this.
  8. So what's the Mighty Mammon going to do?
     
  9. American Brummie

    Jun 19, 2009
    There Be Dragons Here
    Club:
    Birmingham City FC
    Nat'l Team:
    United States
    From CNN:

    upload_2020-6-28_6-53-29.png

    The most notable thing I'd like to know about isn't the line in this graph, but the bars below (representing, IIRC, the volume of trades). To me, it looks like not only the average, but the variance, of volume has gone up since February 2020. I'd want to know for sure, but I remember someone who knows these markets telling me that increased volume is a bad thing.
     
  10. spejic

    spejic Cautionary example

    Mar 1, 1999
    San Rafael, CA
    Club:
    San Jose Earthquakes
    Volatility in either direction means money making opportunities so volume goes up. So volume going up means something's happening. And volume creates its own volatility because they are trading on psychology. So volume going up usually means something's going to happen.
     
  11. American Brummie

    Jun 19, 2009
    There Be Dragons Here
    Club:
    Birmingham City FC
    Nat'l Team:
    United States
    Thanks John Madden
     
    Boandlkramer repped this.
  12. spejic

    spejic Cautionary example

    Mar 1, 1999
    San Rafael, CA
    Club:
    San Jose Earthquakes
    We went to the same college.
     
    russ, chaski and American Brummie repped this.
  13. ceezmad

    ceezmad Member+

    Mar 4, 2010
    Chicago
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    Lots of FOMO.

    That can be bad because people are chasing bad companies that they see as "opportunities' that is how a company that has not produced a single car can have a market cap larger than Ford, or a bankrupt company trying to get cash by selling more worthless stock to svckers.
     
    ChrisSSBB repped this.
  14. It often is. Volumes are most of the normal times just investing money that comes into the market at regular intervals, like retirement funds investing the money brought in by members with monthly etc regularity.
    So if all of a sudden that base stream gets a kick up, you know something is going on.
     
  15. bostonsoccermdl

    bostonsoccermdl Moderator
    Staff Member

    Apr 3, 2002
    Denver, CO
    #1690 bostonsoccermdl, Jun 28, 2020
    Last edited: Jun 28, 2020
    I swear we will make a trader out of you yet Brummie.

    What Spejic said is generally true regarding volatility expansion and increased volume. It isn't necessarily "bad" unless you are on the wrong side of the trend of course ;) . Volume analysis isn't that reliable I have found. It's a bit of a fools errand, as what the books and websites teach you sounds good in theory, but the actual accuracy of the analysis is spotty.

    Some people swear by it but I gave it up. Supposedly healthy trends exhibit volatility cycles where expansion is followed by contraction (pullbacks or sideways movement in price. This is the "resting period." You can see glimpses of this in your chart, especially the downtrend. But don''t react to the actual explosion of volatility/volume, study the reaction to it. Again, you will see this is charts and convince yourself by confirmation bias it works all the time. Putting it into practice you probably won't be as pleased.

    http://pring.com/articles/article15.htm
    Again, This is how its supposed to work, but making trades off it isn't that simple.

    Now not giving trading advice, but it seems increasing volume occuring after a prolonged horizontal dead period (a channel) and a breakout usually gives better signals. But that isn't what we have with the S&P. Thats just a side note. (this doesn't show volume, but had it done so, you would see a large run up)
    [​IMG]
     
    American Brummie and Dr. Wankler repped this.
  16. bostonsoccermdl

    bostonsoccermdl Moderator
    Staff Member

    Apr 3, 2002
    Denver, CO
    Kind of. Volume is simply where a buyer meets a seller and the amounts traded. You could have a huge amount being traded at any given price and the stock won't move because equilibrium between buyers and sellers quantity wise.. It usually though has an imbalance which causes a move because buyers exhaust all the given supply at a price level and are forced to pay higher prices to get more available shares causing a run.
     
    taosjohn repped this.
  17. Yup. I noticed that years ago looking at the volumes per transaction in trade order when during the day for some stocks the normal volume per transaction was around a couple of thousands shares during the day transactions were recorded that were a couple of hundred thousands of shares at about the same price as the other transactions. My only explanation for that was two investors/mutual funds made a deal swapping shares for a fixed price.
     
  18. bostonsoccermdl

    bostonsoccermdl Moderator
    Staff Member

    Apr 3, 2002
    Denver, CO
    That's exactly what happens. Its called finding a "natural." traders shop around their orders to contacts on other desks and agree on a large quantity and a price. (this is done to avoid having to move the markets when you are buying/selling larger quantities) They legally have to report it so it hits the tape which all the software vendors calculate their charts off of.

    This is one reason it makes volume analysis on stocks less accurate. Hugely traded and liquid futures, not so much because so much liquidity exists at price levels, it isn't necessary. (I didn't want to go into the weeds on this but since you asked.)
     
  19. The Jitty Slitter

    The Jitty Slitter Moderator
    Staff Member

    Bayern München
    Germany
    Jul 23, 2004
    Karo Viertel
    Club:
    FC Sankt Pauli
    Nat'l Team:
    Germany
    Volatility returned in 2018 IIRC

    The relatively low levels of volatility before that were quite unusual

    And now we have a lot of macro factors in terms of politics, economics etc that reduce stability. So overall there is far more risk in the markets.
     
  20. celito

    celito Member+

    Palmeiras
    Brazil
    Feb 28, 2005
    USA
    Club:
    Palmeiras Sao Paulo
    Nat'l Team:
    Brazil
    On a break out (or expansion) it helps to have MAs in your chart for pullback entries. I like using EMAs (9 and 20). Also what works great is having levels of major support and resistance drawn out. You can also use Bollinger Bands to make is easer to see the contraction/expansion periods.
     
  21. bostonsoccermdl

    bostonsoccermdl Moderator
    Staff Member

    Apr 3, 2002
    Denver, CO
    #1696 bostonsoccermdl, Jun 29, 2020
    Last edited: Jun 29, 2020
    I don’t use them but Look into the Hull MA if you need to use one. Just beware of MA’s lagging issues. Agreed on S/R. Scanning software that allows for bollinger “squeezes” can be useful for finding opportunities.

    Not saying you do, but Don’t fall into the common trap of adding too many squiggly lines to your chart. A lot of people head down the wrong road with that.

    a lot of the common stuff is useless as advertised and deceptive as it provides no edge. It looks great in hindsight, and your charts look sexy, but doesn’t work when applied. I suggest looking into Suri Dudella’s work as well as Adam Grimes. Grimes especially. He debunks a lot of the myths and explains why most traders lose money.

    he is one of the few honest guys out there in a world of hucksters and scam artists.
     
  22. American Brummie

    Jun 19, 2009
    There Be Dragons Here
    Club:
    Birmingham City FC
    Nat'l Team:
    United States
    Now that is interesting. Any articles/books you would recommend?
     
  23. I about a year or two after Greenspan started that QE policy copied by the other meaningful central banks, told fellow investors/analysts to dump the usual analytical tools as these were founded on "neutral"/sensible CB policies. Since QE a huge disruptive parameter has entered the arena that isnot part of the analystic theories that are the foundation of investing and analysis.
     
  24. bostonsoccermdl

    bostonsoccermdl Moderator
    Staff Member

    Apr 3, 2002
    Denver, CO
    #1699 bostonsoccermdl, Jun 30, 2020
    Last edited: Jun 30, 2020
    Well, as far as volume is concerned I don't, but if you want to an idea that has a following look into "market profile/auction theory". I never really looked to much into this ( I trade stocks), but some people swear by it. It is mainly used for trading futures/commodities (very liquid instruments.) It is a bit complex, but worth a look depending on how in depth you want to get..

    https://www.tradamaker.com/what-is-auction-market-theory/


    As far as trading, I like Adam Grimes "The Art and Science of Technical Analysis." It is meant for intermediate level traders/investors and higher, (I am guessing you are relatively new?) but what I like is how he is brutally honest on why trading is so hard, rather than pitch to you some elusive holy grail that doesn't exist.. Him addressing everyone's common mistakes helps speed up the learning process..

    I found a free copy floating around the internet so it shouldn't be hard to find. If parts get too complex just skip those as there is value all over in that book.. (Chapter 11: Psychology is one of the best)

    (I am not recommending short term trading to everyone btw. It is difficult and usually takes along time to become profitable, but researching it as a hobby on the side and trying ideas on a simulator account until you gain experience it isn't a bad thing.. )
     
    American Brummie repped this.
  25. American Brummie

    Jun 19, 2009
    There Be Dragons Here
    Club:
    Birmingham City FC
    Nat'l Team:
    United States
    I will not be trading but there are some interesting political implications of this and maybe a paper someday.
     

Share This Page