COVID19 Bottom? As it 3/19??? (Riginally posted on 3/24)

[FrugalSaver]

This will be a great exercise in human behavior.

Today we had the largest rise since 1933!!!

I expect we have not yet seen the bottom.

Buy the rumor sell the news

Focus has been on the $2T bailout bickering and including funding for abortions, and military and green energy projects etc etc etc. so shameful from both sides while people lose their job and life savings over this.

Once it passes tonight or tomorrow or whenever (doesn’t really matter, it’s already baked in), we probably get a sell off shorty there after, maybe after a euphoric pop but the problem hasn’t gone away.

Then it’s back to that national American pastime of watching the grand global Corona scoreboard and its going to get a lot worse over the next couple of weeks.

We’ll get news of drugs that give us hope. Likely not solutions but improvement. That will move the market. We’ll get millions in unemployment very soon. Maybe to 20%-30% they say for a short time as every contractor in the country largely is let go

Hold your nose. Be patient. Make wise decisions. Don’t rush. Opportunities will abound I believe.

What say you? 

[MustacheAndaHalf]

Today we had the largest rise since 1933!!!

I understand the news media like headlines, but I wish DJIA would drop from usage already.  It was the DJIA that made history today - not the S&P 500 index or others which are better constructed.  The S&P 500 had a great day (+9.5%).

[Jack0Life]

Today we had the largest rise since 1933!!!

I understand the news media like headlines, but I wish DJIA would drop from usage already.  It was the DJIA that made history today - not the S&P 500 index or others which are better constructed.  The S&P 500 had a great day (+9.5%).

Agreed. I'm one of those.
When I first started paying attention to the market, it was always the DOW that made headlines so I paid attention to that. In reality, the S&P is a better representation of the market.
I bought some large cap indexes and thought maybe it went up 11% like the Dow did. Nope it went up 9.4% just like the S&P.

[FrugalSaver]

Yeah the BA headfake drove the Dow up in disproportionate amount

[dougules]

I operate on buy the paycheck, sell the living expenses. 

[FrugalSaver]

I'm not sure this is anything like 2008.  However, if it is, we had these violent moves for several weeks after multiple bouts of QE, Stimulus, etc.

I would be surprised if we don't have some pull back before or around hitting S&P 2700. 

The move in this market has almost smacked of giving the insiders an opportunity to buy low and sell in this area before the rug pull is done again. 

If people thought this market was overpriced based on P/E before, just wait until S&P profits for the year $80 less than projected for a % reduction of about 40% based on current projections, which at this point would be roughly a

20-25% increase in S&P ABOVE what it was when S&P was 3,300

So that leads us to a couple of possible conclusions.

Either the impacts to profits for the year of Corona won't be as bad as we think or two the market needs to go lower at some point.

The euphoria doesn't seem to match the fear of the hospitals and morgues filling up across the country and planet earth. 

Maybe this time is different.

[MaaS]

I'd be surprised if we've seen the bottom. This type of rally is common in a bear market. I believe we had two of just under 20% in the GFC.

[FrugalSaver]

I'd be surprised if we've seen the bottom. This type of rally is common in a bear market. I believe we had two of just under 20% in the GFC.

If average / normal history plays out, we're due for at least one more pull back over the next 0-4 months to ultimately go 25% lower than here.

Maybe this time is different.

[American GenX]

Yes, the market has a ways to drop from here before it finds a new bottom.  Of course, there will be volatility and false hope.  But the worst is yet to come and still plenty of pain ahead.

[Stachless]

Here is a positive sign:  Bill Ackman is now bullish. 

This snake POS human went on CNBC on March 18th and said that this is the end of America as we know it (used those exact words).  He said hell is coming, many stocks were going to zero, especially hotel stocks.  He ranted like a fucking lunatic for 28 minutes.  The markets tanked hard. 

Guess who was shorting that shit all the way down?  And guess who bought hotel stocks at the bottom and is now declaring all is cool just days later?  Buddy boy Bill Ackman.  Mr. Reverse Pump-and-Dump knew he would have a platform on CNBC and used it to line his pockets to the tune of $2 Billion-with-a-B in just 5 days.  He did the same thing to Herbalife a few years ago and got away with it after an investigation because he was just giving his opinion after all.  He will get away with this, too.   

I believe that money goes where it is taken care of.  If this sociopathic asshole is buying I think it must mean the market is off the bottom. 
 
https://www.forbes.com/sites/antoinegara/2020/03/23/billionaire-bill-ackman-bets-on-us-recovery-after-closing-coronavirus-hedges/#5bf564997785

So....what makes you believe him now when he says he's buying?  Perhaps he's just re-loading his shorts?

[MustacheAndaHalf]

@MissNancyPryor - Very nice analysis.  I wish more people could both hate a person (this hedge fund manager) while also separating that from the information they provide (he's bullish, and successful in prior panics).

I'd be surprised if we've seen the bottom. This type of rally is common in a bear market. I believe we had two of just under 20% in the GFC.

If average / normal history plays out, we're due for at least one more pull back over the next 0-4 months to ultimately go 25% lower than here.

Maybe this time is different.

If a stock drops from $100 to $80 and then $64, there's two ways to measure it.  From the starting point, that's a -20% drop and a -16% drop.  But if you use the most recent price, it's two drops of -20%.  Using the most recent price, I looked for -20% drops from the highest point to the lowest point.
https://www.multpl.com/s-p-500-historical-prices/table/by-month

starting at 1,539.66 on Oct 1, 2007 ... wait for 1231.73 or lower ...
drop to 1,216.95 on Sep 1,2008 ... wait for 973.56 or lower ...
drop to 968.80 on Oct 1 2008 ... wait for 775.04 or lower ...
drop to 757.13 on Mar 1 2009 ... done

So I count 3 drops of -20%, each measured from the new price.

Even including monthly data from year 2000 through 2012, the low point was Mar 1 2009 and the highest point Oct 1 2007.  I find it interesting that the 3rd -20% drop landed on exactly the lowest point, as measured from the highest point.  The S&P 500 reached a new high in Mar 1 2013, about 5.5 years after the prior peak.