I wish Steemit Nation all the best. Haven't posted in a long time. I really haven't made any big moves at all since last post, but of course follow markets each day - usually at night while everyone is sleeping and early morning while everyone is sleeping.
So there was a big sell - off on Friday? What do you do?
Here are some transcripts of what is happening according to me and my very close band of investing brothers.
This will be long and nobody will read this text below. However, this is what we predicted (see my posts) and what we expect to happen minus an attack like 911 or meteor hitting the planet, etc.
From Dr. Dow: Wednesday night
Dow was up 26665 then closed flat, look at the 10 year 2.75 as long as the 10 year rises markets turn south. Trump wants to pay off debt with cheap money. I don't blame him I would too. i made all my big purchase last year and everything's lock in at a low rate . Hope he does the same (Trump). Look for higher inflation... Fed will get their wish of 2% but it will go higher. Eventually market will rise due to higher inflation
From LOTN: Thursday night
Also with the FED going to (as I warned if Trump was elected) absolutely continue raising key prime rate, 10 year yield should naturally go up. If they go above 3%, it would altar some trades. Yet, like what I think is/should be going on, is people finally doing what I said months ago when I took some $$ out of funds - taking profit. Hell other than BITCF, and AQUA, I ain't bought shit in this overpriced market really since 2015 with Chinese meltdown. I'm out of BITCF other than sleep me shares.
The news is in. The earnings will have to now drive the exchanges, and as earnings rise so will key prime rate. But this will take a few months as people still haven't received their first adjusted paychecks. Also the lower rate (until Socii's ruin it when it expires) on corporate, individual income, reduced business regulations will carry exchanges higher.
But market has been due for pullback for years, this will take months to fully see, and they will raise rates early this year to test the water. Maybe this is the time?
From another investor: Thursday night
Amen and Amen...Well said gentlemen.
From LOTN: Friday night
Well the big sell-off of happened.
I'll be damned. ^vix broke through 17's and next step higher is 20 then 25.
Like volume wasn't to crazy either. I know the ^vix says otherwise.
But other than trading on Dow Jones, the S&P and Nasdaq were not much different than usual.
I seriously think a lot of it is profit taking by really big money as all- time high was on Monday.
Like 10% on Nasdaq would place it at 7000ish. So volume would increase more and ^vix would probably test 20 area. And you knew markets were due for 10% correction - we've all known that.
So me and @@& will figure out what will happen next and big money will read or emails, etc.
It will again take time for all the above mentioned to sink in and big money is finally following smart $$.
Take care yall
From Dr. Dow: (my little brother and a more skilled investor) Saturday night
Black Monday Oct 19 1987
The market gained a stunning 44% in 1987 through August 25 before turning down. Price-earnings ratios were inflated, as they are today. More worrisome, the Federal Reserve had recently pushed the Federal Funds rate up from 6% to 7.25% and the 10-year Treasury yielded 10%, up from 7% at the start of the year. Those rates sound ridiculously high today, but they were commonplace in the late 1970's and the 1980's.
Tech Bubble Fed raises rates while bubble busts 2000 to 2002 I'll including the Terrorist attacks 2001. 9-11 added about a year to the recession .
2000: GDP = 4.1%, Unemployment = 6%, Inflation = 3.4%
Feb 2 5.75% Raised rates despite stock market decline in March.
Mar 21 6.0%
May 6.5%
2001: GDP = 1.0%, Unemployment = 6%, Inflation = 1.6%
Jan 3 6.0% Bush took office.
Jan 31 5.5%
Mar 20 5.0% Recession began. Fed lowered rates to fight it.
Apr 18 4.5%
May 15 4.0%
Jun 27 3.75% EGTTRA tax rebate enacted.
Aug 21 3.5%
Sep 17 3.0% 9/11 attacks.
Oct 2 2.5% Afghanistan War.
Nov 6 2.0%
Dec 11 1.75%
2002: GDP = 1.8%, Unemployment = 6%, Inflation = 2.4%
Nov 6 1.25%
2004 fed funds rates 1%
I bought my first house and new car that year : )
June 2004 1 % all the way to July 2006 5.25%
remember Greenspan raising 0.25% every couple of months
Sept 2007 first rate cut to Dec 2008 0.25% then all the way to Nov 2015 no rate increase.
Why did they go so long before a increase, It's like they where playing hot potato last one looses.
Dec 2015 first rate increase
MY Point is Rate increases always pop bubbles in the markets. We are so heavy in debt now that the cycle is shorter
Keep a eye on the 10 year/ bond market
1 question?
How in their right mind would buy our debt for the yield ?
Baby boomers will be cashing out also
I would go on but I have work to do
From LOTN: Saturday night
I said year or more ago, if there is correction, unless like thinking now (bitcoin? vs. housing in 2008, dot.com/911 in 2000) some sector causes the rest to crash it would be a quick brutal Black Monday.
But what sector - staples, energy, the FANG (socialist media sites), transportation, etc?
IMO - we had two brief (not Black Monday but not long, extended periods) back in 2010 when S&P hit 1010 and 2011 or 2012 with Euro crises shit when S&P then hit 1040. However, other than that, really no major correction including Chinese meltdown in summer of 2015. But yes, 650ish down on like Dow Jones at today's level would be huge news back then or in 2008.
So yeah a big correction vs. year or more correction is very likely.
Your research and knowledge regarding the FED and bonds is legendary.
Yeah people just don't know - each bubble the debt is higher, the yields are lower but set alarms, and unlike say buying 10 or 20 year bond in like 1979 - 82 at 10% expecting to get paid, and including yields of bonds purchased in dot.com/terrorism bubble, now the yields are less but debt outlandishly higher since 2008 through now.
I still say with all my sleep me shares, if I were to have to buy an equity OR c.d./10 year bond in like a year from now, due to capital appreciation vs. our national debt, I'd still go with an equity.
Thanks Dr. Dow for insights. Yall take care.
Well Steemit Nation that's what we do especially me. If you're going to be in "The Game", you have to have it in your blood. My other older brother could give a shit about investing and will be watching the Super Bowl tomorrow as I read and research after hopefully a long hike at Hanging Rock. Speaking of my area, yall please view and support my local homeboy Greg Hunter a county away, and the working man's investor Gregory Mannarino.
Take care
