Beginning of the Endgame (Mauldin) ...

https://www.mauldineconomics.com/frontlinethoughts/the-beginning-of-the-endgame

He who doesn't care why ...

The average participants in the stock market as a whole are not very well educated about the stock market but it's a game they want to play as they dream of winning.

So they spin the roulette wheel when it feels right to them, which is typically when the market takes a little dip and they believe that playing the game is cheaper.

It is cheaper, but since they don't know how to play well they have a 50:50 chance of winning. But losing the gamble takes money away from them, so their next gamble has less money to play with so it's harder for them to break even.

Wash, rinse, repeat, they eventually go home broke, but they tell their kids they had a great time.

The problem with statistics,

such as when the (stock) market does this then it usually does that ....

is that the current situation is that SPX has an inverted yield curve (the largest one I've ever seen) and that is not very common but when it does exist the market statistically has a much larger correction as money flows into short term bonds instead of into stocks.

Wheels go 'round and 'round ...

and where she stops nobody knows.

Took note of that a few weeks back as the market is trying to figure out where to go. Decided I didn't want to play the game so I went to all-cash.

That's not the only reason though. I'm at that special time (that I hate) when I have to renew my drivers license and therefore have to take a written driving test. So I need to focus all my attention on that upcoming test I have to take ... meaning I have to boot stock trading thoughts out of my head until that new drivers license test receives a passing grade.

Covid ... that's a short list.

I think you should add Putin (and everything he has caused) to that list then apply a little thermodynamics with a little understanding of what entropy is and how that mix has put the world at a higher, relatively uncomfortable, energy state which one can measure by watching the state of the stock market along with its higher volatility and change of phase as measured by its rather huge inverted yield curve -- the biggest one I've ever seen!

Well ... I'm pretty sure.

So, with all that in mind, I took all my money out of the stock market about three weeks ago., and that has proven to be a very good choice so far.

Should have checked how that posted...

The link got some junk stuck to it because in my rush I posted it wrong.

Oh well ... edit it if you're interested.

That said ...

Tomorrow's futures are all in the red at this time of day.

And, as I already pointed out, the yield curve is inverted, more so than I've seen in years AND short term bonds are paying some pretty high rates AND those rates are guaranteed.

That said, the current price is at a significant support level, so what happens now depends on the next throw (or two or three) of the dice. I'm not a gambler so I'm going to be staying out of stocks. For what it's worth, the inversion started in August of last year, so it's had almost a full year to fatten up.

With short term bonds (even the 3-month) paying as much as they currently are, those bonds are going to suck up a lot of money that may have been destined for stocks.

"https://stockcharts.com/freecharts/yieldcurve.php";

It's all about ...

the Dynamic Yield Curve, stupid!

Very sorry, I just couldn't resist.

For many investors, 2023 might be the first time to consider bonds in their adult lives.

That’s the takeaway from an insight published recently by Goldman Sachs, which forecasts that 2023 bond yields will exceed stock dividends. This, the paper says, hasn’t happened since the height of the Great Recession in 2008.

Per the report:

"While the stock market might get more press, the U.S. stock market total capitalization is actually a bit smaller than the bond market, though neither is small. The stock market has just over $30 trillion in total market capitalization, meaning the value of all outstanding shares, while the total amount of debt owed through bonds is more than $40 trillion.

Why does that matter?

Because it’s all about the inverted yield curve, stupid!

A yield curve is a line that plots yields, or interest rates, of bonds that have equal credit quality but differing maturity dates. The slope of the yield curve can predict future interest rate changes and economic activity.

There are three main yield curve shapes: normal upward-sloping curve, inverted downward-sloping curve, and flat.

Normal curves point to economic expansion, and downward-sloping curves point to economic recession.

Why is that so important?
A flat yield curve reflects similar yields across all maturities, implying an uncertain economic situation. A few intermediate (bond) maturities may have slightly higher yields, which causes a slight hump to appear along the flat curve. These humps are usually for mid-term maturities, six months to two years.

The curve shows little difference in yield to maturity among shorter and longer-term bonds. A two-year bond may offer a yield of 6%, a five-year bond of 6.1%, a 10-year bond of 6%, and a 20-year bond of 6.05%. In times of high uncertainty, investors demand similar yields across all maturities.

Why Does the Yield-Curve Slope Predict Recessions?

Many studies document the predictive power of the slope of the Treasury yield curve for forecasting recessions. This work is motivated, for example, by the empirical evidence which shows the term-structure slope, measured by the spread between the yields on ten-year and two-year U.S. Treasury securities, and shading that denotes U.S. recessions (dated by the National Bureau of Economic Research). Note that the yield-curve slope becomes negative before each economic recession since the 1970s. That is, an “inversion” of the yield curve, in which short-maturity interest rates exceed long-maturity rates, is typically associated with a recession in the near future.

So here's the largest yield curve inversion I've seen in my many trading years (so I decided to take a trading break for a while).

https://stockcharts.com/freecharts/yieldcurve.php

Have any idea why ...

Pretzel Logic doesn't have an update?

I NEVER short anything.

Well ... depends on how you interpret that.

If I don't like the way the market is acting, or I have some totally unrelated things I have to do which will require most of my attention then I go from long-stock to all-cash. Been that way for over two weeks now -- maybe three.

So there you go, I'm not shorting squat -- and I am definitely not losing money (if you don't account for inflation).

I also do not like the current state of the Yield Curve. It is now highly inverted, and it is easy to interpret that as a signal of a lot of money flowing into high-return short-term bonds (or just into cash).

Uh ...

the yield curve is part of what "a market" is saying.

Money comes in various forms (which one could refer to as markets).

Be careful which money market you are investing in, as there is no such thing as "the market".

For instance, money could be coming out of the stock market and maybe most of that is being put into a bond market. Then you have to decide which bond market.

Been waiting for our Inverted yield curve ...

to produce what it's famous for -- being a reputable forward indicator of a significant stock market decline. The current inverted yield curve is a whopper but nothing's happened ... yet.

The tone of the news I've been reading is changing: Just read, "Expectations are for earnings to decline for a third straight quarter. Consensus estimates project a decline of about 7% in earnings per share among S&P 500 companies compared to the same quarter last year, which would mark the steepest decline since 2020, per UBS."

Well ... sorry to hear that ...

I've used Medved Trader for years and have no (spelled 0) interest in using anything else. I am also running Windows 7 on my computer, and have no interest in upgrading that -- if it's not broken, there's nothing to fix; and if I don't leave it alone, I might break it.

As I have MT set up, MT updates are installed automatically and the only way I can tell that is by checking the current version's serial number.

That said, I don't know what caused my "recent problem" with MT; but whatever it was, all my windows (historical and intraday charts and options windows) suddenly had semi-transparent borders (which really annoyed me since the screensaver background image showed through every MT window border). Very annoying! I really wanted solid borders but I couldn't figure out how to do that. So I called MT but they seemed to have little interest in helping me, so they left me dangling (not a great business strategy!).

So I complained to a friend of mine as he might know what I am doing wrong in terms of border selection. He might be able to fix my display problem because when he has a problem with anything he spares no expense to solve that problem. So he invited himself up for a visit (I live way out in the country about an hour away) and he brought along a book that is about four inches thick. He knew nothing about Medved Trader, but he took a half-minute look in his book then sat down at the computer and it only took him about another 30-seconds to fix the problem. Before my friend came up I spent a few hours on it and got nowhere.

All that behind me now, I still wonder how MT managed to change border transparency without my assistance.

"only lost a trillion dollars so far"

Famous quote ... "a trillion here, a trillion there, pretty soon you're talking about real money" ...

Actually, the real saying used billion, not trillion.

But ... with inflation and because of compounding, a trillion is closer to the truth today.

That said, I went to cash long enough ago such that I don't remember the date. I could check the records at the bank but I'm not interested enough to do that.

Regarding Dynamic Yield Curve ...

Did you go to that link and move the vertical red line to other dates on the SPX chart?

You should have as that is the only way to see what happens to $SPX over time as the yield curve inverts.

If you watch CNBC on TV you might have noticed that the inverted yield curve has been injected into the conversation more often than usual (and for good reason).

Impact of inverted yield curve:
https://tinyurl.com/ye2jw5sz

Current inverted yield curve:
https://stockcharts.com/freecharts/yieldcurve.php

As Elmer Fudd used to say: "Be vewy vewy careful ..."

Everything in nature is cyclical ... du.

All anything can do is to accept it.
All anything that is intelligent can do is to nudge it.

No, you don't need to be concerned.

I accidentally sent it to the wrong address.

Sorry for disturbing you.

Disinflation is:

on average, in a healthy economy, a temporary slowing of the pace of price inflation.

In other words, there is on average always going to be inflation in a healthy economy. Why is that the case? Because people feel better about themselves every time they get a raise. That's positive feedback. People will work harder and stay at their jobs longer when they get positive feedback. That positive feedback comes most often from an increase in salary. But that increase in spending means nothing on average because sellers will respond by raising prices. This process is basically a circle jerk.

A healthy economy is a teeter-totter economy in terms of prices versus income. If anyone wants a better lifestyle, the easiest way to do that is to increase their value. The way to do that is through more or better education, preferably obtaining additional skills that are in higher demand. That additional education will cost them something but if they chose the right path, they will get more out than they put in.

My curiosity ...

I'm wondering if anyone but me has noticed that the yield curve is hugely inverted and that the inversion didn't exist till the middle of last November and since then it's moved from mildly inverted to hugely inverted now.

With short term treasuries paying well over 5% wouldn't you think that would suck the life out of the stock market now?

https://stockcharts.com/freecharts/yieldcurve.php

Compare ...

last two SnP trading days of this last week to 08/25 and 08/26 of 2022 (which are also the last two trading days of their week). One can draw a flat line between the two. That level was also just above a major H/L reversal on Thursday, 02/02/23.

Could the reversal of last Friday be the beginning of a new reversal that has legs (having sucker rallies)? If so, there are a few lower support levels on the way down that could feed sucker rallies -- fun to watch but not be in.

ROTFLMAO!

Oops, laughed so hard after sending my last message I shit my pants!

24-hour Live Futures:

https://www.stockmaster.in/spx-500-futures-live.html

That site has a lot of options that may be of some use (along the left and top of the chart, but I've never been interested enough to experiment with them. FWIW, watching that chart for any length of time bores me.

One can select time intervals from 5-min and longer -- list at top of chart.
And there are other options to select. Since I don't use that chart I've never tried to figure out where its time reference is (relative to California).

Found an interesting link while fooling around there:
https://www.tradingview.com/

Your question:

"Could you find out why the August high (up more than 20%) didn't end the bear so we could have avoided the drop into October?"

Answer: market prices are a result of all the traders active in the market, buyers and sellers. In other words, the market is a voting machine and merely expresses what all stock traders -- buyers and sellers -- decided between themselves. There is nobody in command that negotiates a better outcome for one side or the other.

An exact opposite of that is a musical orchestra, which always has a conductor (a leader) whose sole desire and purpose is to conduct the orchestra in a manner that creates beautiful music for its entire audience. The conductor is in command of the orchestra.

There is no such leader, no conductor, for the stock market. Every trade is a tug of war between buyers and sellers each seeking to outdo the other.

I won't even try to explain why.

I'm not trying to be rude. I just follow a different process for my stock trading. I'll explain.

Think of the stock market as an overcrowded place where there are day-traders on one end of the room (and who feel as though they have to be in and out of a trade during the same day) and on the far other side of the room there are the Cramer Followers who feel that they have to create a long term portfolio of several highly rated stocks in terms of stability and predictable income, and each of which represents a different large sector thus forming diversity.

I do neither. I look for a single stock which for some (usually justified) reason trades in a relatively narrow and horizontal price range -- meaning their future trading range is known and the stock will stay within that range most of the time over many weeks and months. These stocks, if all you do is buy and sell that specific stock, will allow you to frequently trade in and out of it relatively predictably. I go one step further: in both my individual and retirement accounts, I load up on that one stock then I sell weekly Call options against every share. That sale is immediate income to me for that week. If that stock is assigned at the end of the week (due to the Calls I sold) I will load up on it again on Monday and again sell Call options against all shares that expire on the next Friday. Wash, rinse, repeat week after week after week.

That process works really well!!!

Showed up in my email this morning:

By Kevin Matras
Zacks.com, Executive Vice President

Title: Stocks Closed Mixed, Nasdaq Quietly Exits Their Bear Market

Stocks closed mixed yesterday with the Dow closing modestly lower
while the S&P and Nasdaq closed modestly higher.

The Nasdaq, however, quietly exited their bear market yesterday. From
their bear market low close of 10,213.29 on 12/28/2022, to yesterday's
close of 12,256.92 on 5/8/2023, the Nasdaq is up 20.01%, just above
the 20% threshold needed to officially exit bear market territory and
enter a new bull market."

My comment ...
Whew, sure glad it’s finally over!

LOL ROTF LMAO

I have two sources of futures data.

One is the latest most recent historical data while the other is "current" (changes ever few minutes all day long which makes it more difficult and annoying to watch and to interpret). And while doing that, is it a Future or is it a Historical plus Here-&-Now when all the idiots are trading after-hours or pre-open.?

After studying both of them over a considerable period of time I decided I don't like the current (as it jumps all over the place while being current which makes it more difficult to interpret). It would also account for all the pre-open and after-hours trading, when all the idiots are trading.

I don't want all the "outside normal hours traders" mucking up my data.

Just checked futures again.

Now the futures are all red but not by much.
Conclusion: Don't check futures too early.

Question:
How early is too early?

At the time of this post ...

futures for Monday open are very green:

Dow mini: +543
S&P mini: +74.5

I usually don't check these things this early, so I'll check it again late tonight (when I normally check it).

The problem with VIX.

It's a measure of very short-term historical (and current) volatility of the market which is always higher during a sell-off. It knows nothing about the future but it can (and does) affect the future as traders react to it, especially if they try to trade VIX.

Given that traders will react to it (and do that during its early and late stages), it will obviously affect both the current and future market prices, and that will reflect back and affect VIX itself.

Therefore, it's a market cannibal with very high volatility. Be very careful trying to trade VIX itself as that will take money away from the rest of the market and that will result in a lower VIX as it's gotten fatter (more calm) after traders leave the market.

Are We In A Recession Yet?

One common definition of recession — two consecutive quarters of negative gross domestic product (GDP) — happened in the first half of 2022. Yet the organization that defines U.S. business cycles, the National Bureau of Economic Research (NBER), takes a different view.

According to the NBER’s definition of recession — a significant decline in economic activity that is spread across the economy and that lasts more than a few months — we were not in a recession in 2022 and we still aren’t now.

Until recently, the Federal Reserve was determined to raise interest rates until inflation got much, much lower. The cooling economy plus the implosion of Silicon Valley Bank — the second-largest bank failure in U.S. history — has inspired the Fed to starting talking about a pause in rate hikes.

To keep tabs on whether an official economic contraction is imminent, we’ve devised the following recession tracker, which monitors 15 important economic indicators. Once most of the signs point downward, a recession may very well be nigh.

https://www.forbes.com/advisor/investing/are-we-in-a-recession/

My interpretation: talk is cheap but it can cause a whole lot of whoop-ass ... or pleasure if following your guess became true.

Question is: are you investing or are you gambling?

My way: buy the stock - - - sell its weekly Calls.

If assigned: wash, rinse, repeat. It's a way of making money while standing guard

I have 4155 marked as resistance ...
also 4300.

I think it is important to keep track of these things but I don't know how much significance to give to them because I only trade stocks and every trade is a Buy-Write: buy the stock and sell its ATM or Overhead weekly Calls. At least that way I always have income, but the downside is that I sometimes miss a good portion of a lengthy trade higher.

You just set a record ..:

5,000th post on this board.

Very interesting (for a non-trader posting on a stock trading board) as this board is supposed to be all about trading the SnP 500.

Well then,

Please post two one-year charts with one pasted above the other.

One chart must be $SPX. The other one must be Bitcoin.

Use 1-day intervals. Then explain the correlation.

Just curious ...

but what on Earth does BITCOIN have to do with $SPX which is what this message board is supposed to be all about? My thinking is that any discussion of BITCOIN is off-topic on this message board and should be deleted.

Taking a small step further, I'm a little more than perplexed why our country allows anything like BITCOIN to be used for any financial transactions in our country as it would be easy to use BITCOIN to obfuscate illegal activities (whether those activities happen outside or within our government).

It's all about covid 19 ...

That's what brought down the markets, especially travel companies because they put crowds of people in small places.

Check your charts starting 2020. Airlines, cruise lines, S&P500, they all crashed in early 2020 because of covid-19. For obvious reasons travel companies are slow to recover.

If you know how to search the internet for news, you will find this:

"As COVID-19 spread across the world with unprecedented speed, consumer and investor behavior dramatically shifted. Triggered by massive selloffs, the major stock indexes plummeted."

Or, don't accept anything I write and remain your uninformed self.

Trading NCLH works out quite well for me.

I've traded it frequently lately.

I make only one type of trade -- Weekly Buy-Writes. I assume you know what those are. I do not do any other style of trade. In fact I'm all-in on NCLH this week. It currently matches my trading criteria.

I have two trading accounts: an Individual account, and a SEP account. I currently have one NCLH trade active in each of those accounts (leaving little cash on the table), and I always go all-in with the same symbol (both accounts), and this week (as in many recent weeks) I chose NCLH. Why? I'm not stupid, it's bringing in the money. When its price pattern reaches a state I'm not fond of, I'll choose a different symbol and go all-in using that other stock.

I hope this was redundant enough for you to understand.

Surely you jest ...

Now for the weird thing that just came upon me ...

I just did a search on Morgan Stanley then, of course, I looked at the results that came up.

The very first thing that showed up at the top of the results page:

"Results for Livermore, CA 94550 · Choose area"

Then below that was a list of things that related to Morgan Stanley.

That is totally weird. That town is where I bought my first house well over 50 years ago, and that house was initially (temporarily) financed through the builder's bank, then eventually through my wife's bank (whatever that was, I have no clue). Soon after that we moved to Minnesota. All of that happened within about two years (a very long time ago).

Turning on a dime ...

I liked what NCLH was doing during the day today, so I squeezed in Buy/Write trades (this week's expiration) in both my accounts before EOD trading today. That brought in cash; then wash/rinse and sell more Calls early next week.

Bought NCLH shares this morning.

Paid a few pennies above $13 for the shares, then I immediately sold $13.50 CCs that expire tomorrow and the net result of that is my total cost of buying those shares is now below $13. Easy, peasy.

Going forward in time, I can now sell weekly $13.00 CCs against NCLH week after week until the shares are assigned away. That is how I trade any stock all the time -- via Buy/Writes. It works extremely well.

If the market decides that NCLH should go down week after week, it's relatively easy to follow that by continuing to sell CCs on NCLH every week.