tsptalk's Market Talk

[tsptalk]

Breaking out or stretching the limits of this move higher?

 

[tsptalk]

I've never been a real believer in gaps... So the markets up one day, and down the next. I don't understand the theory that the space in between them has to be filled, it just doesn't make a whole lot of sense to me. But that's just me... I mean think about it; are there people out there that say to themselves, "We need to buy more stocks ,(and maybe lose money) to fill up that gap that was left behind yesterday". Sorry, but I just don't get it. It's just a chart. It shows where it starts, and it shows where the market stopped. Millions of people traded, and billions of dollars were traded in between, are they really thinking about making those lines move up and down according to some preconceived pattern? I don't think so, they're just thinking about making money!

It's mostly psychological, but I'm guessing there's computer algorithms involved too. Here's one theory, and if you look at charts it happens over and over again.

One theory is the missing out part. Say stock ABC is trading at $100 a share and you've been considering buying it. One day it gaps up to $110 a share. Frustrated, you decide you want to buy it, but you're going to wait until it comes back to $100. If everybody does that, the buying will dry up until it gets back to $100. that's why they tend to get filled quickly.

There are many reasons why they work, or shouldn't, but they just seem to work. Especially on large indices like the S&P 500. But here's a chart of Amazon (which actually looks a little suspect with that head and shoulders pattern.)

The red gaps are all filled on this 6 month chart of AMZN. Notice how quickly they get filled. There is one tiny open gap and that's the blue one. Coincidentally(?) that would be about here the downside target would be if the head and shoulders pattern fails. And AMZN did pull back to the top of that gap, like we saw yesterday in the S&P.

 

[grimmjsg123]

People trade futures at night which drives the market. The Robinhood folks were steering the market for awhile. I am going 100% C tomorrow out of the 50c50s split the S fund is getting long in the tooth and is prepping a significant correction. The C became fully imbedded and has got room to run (as the S fund has been doing for days.) The S is still above the weekly Bollinger band this is the 4th week; odds are a pullback this week.

 

[tsptalk]

Not a deal breaker since this steep angle of incline was bound to end eventually, but this break below support in the S-fund is a yellow flag for the short-term...

 

[grimmjsg123]

The beginning of loosing embedment. This can easily make a run for the 18 day moving average on a pullback. The C fund is primed to run

 

[tsptalk]

The disappointing jobs report seems to be just what the market wanted. Or an OK one. Or a good one. Apparently it didn't matter. Buy, buy, buy. What could go wrong? :thinking:

6.7% unemployment rate is quite impressive under these circumstances. I'm not sure how that is possible or sustainable if California, as well as other areas, are getting ready to shut down.

https://www.tsptalk.com/mb/blogs/tsptalk/5425-jobs-report-november.html

 

[tsptalk]

The S-fund broke that channel as we mentioned below, but now it is back testing the old support line - possible resistance, but still rising resistance.

Monday is the 7th so if there's going to be a pullback, the bears have some history on their side starting on the 8th. They just haven't wanted to step in front of this momentum yet.

Chart provided courtesy of www.sentimentrader.com

Not a deal breaker since this steep angle of incline was bound to end eventually, but this break below support in the S-fund is a yellow flag for the short-term...

 

[Bullitt]

Vaccines have cured COVID. There is no more risk of a massive selloff as far as markets are concerned, but it won't be up every day in December.

Watching TLT for that 152 level to signal a turn.

 

[Bullitt]

RE: Gaps,

They do seem more like a daily occurrence in markets in the past few years. Every day it's, "which way we gapping this morning?"

 

[tsptalk]

By the way, another 210K new cases of COVID were recorded yesterday. That's the first day with over 200K.

It could just be a bunch of asymptomatic folks getting tested, I don't know, but the stock market doesn't seemed concerned.

 

[bmneveu]

By the way, another 210K new cases of COVID were recorded yesterday. That's the first day with over 200K.

It could just be a bunch of asymptomatic folks getting tested, I don't know, but the stock market doesn't seemed concerned.

I think that is because the market cares more about potential lockdowns than the actual COVID virus, and with all the positive vaccine news coming out day after day, it seems like we are distancing ourselves more and more from the possibility of another lockdown.

 

[Viva_La_Migra]

I think that is because the market cares more about potential lockdowns than the actual COVID virus, and with all the positive vaccine news coming out day after day, it seems like we are distancing ourselves more and more from the possibility of another lockdown.

Except in California and New York. They seem to be doubling down on the lockdown thing.

 

[cmil1212]

I think that is because the market cares more about potential lockdowns than the actual COVID virus, and with all the positive vaccine news coming out day after day, it seems like we are distancing ourselves more and more from the possibility of another lockdown.

Well be locked down to March or so. Vaccines are fairytales at this point if you are buying the nonsense. Data is a joke on them as well.


Sent from my iPhone using Tapatalk

 

[James48843]

No fairytales and no jokes. Just good old science and medicine coming to the rescue.

Unfortunately, this is still going to take a year to get enough people vaccinated to quash this bug- and remember- there can be other bugs in our future just as well. God sometimes levels the earth just because it’s time to level the earth.

Let’s just all hope we can survive a bit longer.


Sent from my iPhone using TSP Talk Forums

 

[tsptalk]

A nice bounce off the morning lows, but possibly a breakdown in support that these will have to try to recapture...

 

[quabit]

Tom ever get the feeling lately that we are starting back down the path of the .com era. Back them I remember you could close your eyes and throw a dart at a stock dart board and come up a winner. I remember noticing that any company that had the word Technology in its name would move. I tried that theory on a penny stock where the company was just a shell. It hadn't made money is years and the share were 1 cent. I bought 5000 shares before work and within 40 min that stock caught wind and was sitting at 64 cents when I arrived. Seems we maybe entering that phase again in some ways. Hopefully not but when read articles about billion dollar IPOs I wonder.

I just read that Airbnb is now larger that all the hotel stocks https://www.cnbc.com/2020/12/11/air...ll-hotels-after-ipo-why-that-makes-sense.html. Doordash had its IPO and is now worth more that 60 Billion after its IPO. https://www.marketwatch.com/story/d...an-ipo-price-in-wall-street-debut-11607536338

Here's a few more Billion dollar IPOs that came out recently and that is illion with a "B". Snowflake, Royalty Pharma, Unity Software. 2021 is lining up with even more.

Maybe it's different this time (to coin the phrase that seems to make things "OK") but I am starting to wonder. Oh and just for you old timers here's a walk down memory lane https://www.youtube.com/watch?v=zhnEjxsjjuA Remember that? We don't hear from that company anymore because Pets.com which sole focus was to sell pet supplies online to customers (Hmmm sounds like Chewy which made 1 billion in its IPO last year). Pet.com only lasted from Nov 1998 to 2000. Any way just something to think about

 

[tsptalk]

That's crazy - Airbnb and doordash valuations. And don't forget Tesla.

I'm not sure we're at that wild dot com pace yet, but there is something going on, whether it's that M1 Fed money, interest rates, or just a little irrational exuberance.

The S&P is actually less than 3% above the September high. It's just this recent run since November and the election that seems very odd given what's going on with COVID. 25% gain in the S-fund in six weeks? What the?

 

[tsptalk]

20 year chart IWM - Russell 2000 ETF:



Click chart to enlarge

 

[quabit]

Hey is Jim Cramer watching TSPTALK? LOL He just posted this this morning after my dot com comparison. HMMM https://www.cnbc.com/2020/12/11/jim...cing-broken-after-airbnb-doordash-debuts.html Its a crazy time.

Tom maybe you should take TSPTALK public and was can all be backers and make millions.

 

[tsptalk]

Yes! You were on top of that!

I think nnuut is actually Cramer.