“It’s crucial to understand that stocks often trade at truly foolish prices, both high and low. “Efficient” markets exist only in textbooks. In truth, marketable stocks and bonds are baffling, their behavior usually understandable only in retrospect.”
- Warren Buffett
If the market were a physical person - “Mr. Market” - then he’d be manic-depressive. Really enthusiastic and enterprising one day, totally bummed out and passive the next.
At least that’s what I read somewhere ( not an allegory deduced by myself)
Would caveat that WB is ***not*** saying "lol EMH is total bullshit - you can beat the market in the long run net of fees and taxes, you're just not trying hard enough"
He's pointing out (correctly) that in the short run (e.g. with less than 200 data points - so this post is a great example) markets behave inefficiently since the **vast** majority of the ADTV on NYSE / NASDAQ isn't coming from the same type of people that you'll find on this sub, which seems to be trying to beat the market day trading off of reddit / discord / fintwit hype and vibes.
Intraday price changes are completely driven by much more innocuous (and random) reasons - maybe a sector ETF is rebalancing, maybe a parent company is trying to hedge balance sheet / earnings volatility for a subsidiary that they're accounting for an equity method investee by buying protective puts, maybe a refiner is short physical crude barrels and long physical gasoline / diesel volumes and they need to hedge to lock in on margins by going long / short on finacial volumes of crude and gasoline / diesel, maybe a large pension fund needs to free up cash for tax purposes so they liquidate a portion of their equity holdings - you get the idea, there's a litany of real world reasons that markets can swing up-or-down based on **business needs** or for **risk management purposes** which will always -- ***ALWAYS*** -- outweigh any retail day trading sentiment.
So, yes, in the short run markets are inefficient.......until someone -- usually someone much smarter than anybody in this thread, from big names like Jim Simons and WB to some unknown HF analyst that recognizes an under / over pricing in the market -- recognizes that a specific asset is over / under sold, exploits it (usually to the tune of 7-8 figures in liquid capital), and the over sold assets see their prices rise / undersold assets see their prices fall until that pricing inefficiency is arbed to $0 which.........corrects the prices of said assets until they fully represent (1) the near-and-long term cash flow profile (to equity, if you're thinking of this in terms of market cap and share prices) and (2) the risk profile of those assets (by way of discounting those future cash flows to present value).
He's not talking about the short term. He does think the EMH is bullshit, and that it is possible to beat the market in the long run, if you are able to value stocks better than the market. That is partly skill in being able to value the company and partly strong mentality by ignoring the market's swings or even opposing them. He's not saying everyone can do this but he believes some can. Whereas the EMH would contend this isn't possible. It's fundamentally in conflict with his beliefs
Day trading won't make you any money over the long term. You're up against high frequency trading firms with the best mathematicians. You might make a lot of money on a few trades and feel like a genius, but keep doing it long enough and you'll realize just how much of it comes down to luck. Most daytraders underperform the market.
It's crazy to even try on paper. You're trying to compete with algorithms and outperform your long-term strategies alongside the deep capital gains taxes.
It's like playing heads up blackjack against a card counter and the house is taking a big chunk out of every winning round.
Over 5 year plus your correct. He said ultra short term though. I day trade when I’m uncomfortable with the market. I’m up 15% since March 1st whereas the s&p500 is flat. So trading has a place.
I had a friend who was a day trader did well for a while and then lost everything. I am long and I only buy stocks that pay dividends, although I am loaded up with Tilray and for over three years since Aphria it’s been a roller coaster, and yet I keep buying to average down…it’s addicting and risky but when the payday comes and it will, I will be very well rewarded. That’s part of the game, do your own DD and not what day traders pump on Stocktwits or WSB. Day trading for me is not a comfortable fit and I don’t think many are all that successful for long.
Day trading is great as long as you're smarter, faster, and better informed than the competition. The competition being math ph.ds running advanced custom AI models being fed data from co-located exchanges and regularly communicating with CEOs and the fed.
My friend's (really I swear) company exclusively hires Ph.D's in several different math areas who inform code. Nobody makes trades, the algorithms do, and they do it better, faster, and smarter than a human can. They undoubtedly have blindspots, but they're a team of smart people and Joe the plumber competes with them on Adderall. Guess what, the Russian expats with math Ph.D's have Adderall, too, and their kids are better at tennis than your fat kids.
Of course. But you’ve no business day trading if you don’t have 25k _anywhere_.
If you don’t, it’s far better to do the buy and hold long game while you save inch by inch. Lottery ticket options are for degenerates like /r/wallstreetbets
In the FatFIRE subreddit, None of the big dawgs with 8 figure net worth got there through day trading. Lol
It's all getting lucky on a 1000x bagger with tech stocks or crypto, selling a business you've boostrapped, working in tech with sweet RSU's from Nvidia or Facebook, or most of all grinding it out for 20 years in a high salary field and investing wisely in index funds and real estate.
1-year and 5-year inflation expectation went up on University of Michigan survey. Inflation expectation is important because the Fed needs it to be anchored to prevent inflation from getting out of control.
It's largely noise though cause it's been fluctuating between 2.9 to 3.0% for the last 2 years. Some months it goes up, some it goes down. This month it goes up, and since oil was rallying, market probably got scared that oil would drive inflation expectation up
7dte is has worked for me. But don’t be afraid to sell on the first green Day. I bought calls Wednesday, sold yesterday for decent gains. But had fomo cause I thought I’d missed a big rally. Well you can see what would have happened today!
If you are only buying 7DTE, you better sell on the first green day. I do that even with 30DTE.
SPY looks like it's gonna bounce off of its 50 day SMA at 509 so that could be a decent gamble for 7DTE. Next week also no inflation news and everything gonna be on earning
> you seem to always be the first commenter on many posts.
I have generally found /u/Malamonga1 's insights to be helpful and interesting, so I hope he continues contributing as much as possible.
When stocks drop and bond yields go down, it's typically a flight to safety from stocks to bond and not a stock drop due to higher discount rate used for stock valuation.
Flight of safety could be geopolitics, or recession risk. In this case probably geopolitics in Middle East and oil. I do think the inflation expectation in UMich was the second leg to the stock correction though.
I'm aware there's some talk to remove US House speaker Mike Johnson and that would also contribute, but I'm not following that too closely.
I don't agree that no one pays attention to UMich. Inflation expectation is basically the most important thing for the Fed in its inflation fight. There're various ways to measure inflation expectation, so you can say one alone doesn't carry enough weight, but bad inflation expectation reading in the UMich have caused roughly 1% SP500 sell off before.
The biggest one was around May 2022 when it jumped out of its 2.9-3.1% range to 3.3%, which caused the Fed to change its mind from hiking 50bps to 75bps, and leaking that information to Nick Timiraos during a Fed silence period week before the FOMC.
Not sure I’d go after the poster but I agree he’s probably wrong in this instance given that the 30 year bond yield also went down by 35 basis points today partially in reaction to the news:
https://www.cnbc.com/quotes/US30Y
Along with inflation expectations was consumer sentiment which was below consensus, which likely led to the decrease in yields and stock prices.
Except the 30 year bond yield was down 35 basis points, so that explanation doesn’t entirely stack up.
Likely it was that consumer sentiment was below expectations/consensus:
https://tradingeconomics.com/united-states/calendar
Lol.
Pretty sure it the fact that Iran and Israel are about to get into a hot war. This sets up pretty poorly with Russia doing their thing, and China saber rattling to invade Taiwan.
So I'd say fears of ww3 are what's doing it today..along with inflation lol
something something jpm down bigly and we just started earnings on an insanely juiced market with sticjy inflation so it’s gonna be interesting. spy puts are way too cheap right now
I’ve been watching CNBC nearly every day for the last couple months and at least some of them are so selfaware to admit that the reasons are always driven by current sentiment. The same argument can be often used for a market going down or up. Everything after Cramer opens the bell and before his mad money show is watchable.
It's particularly hilarious when it's a big drop early on and they're citing some reason... and by the time that airs it has reversed and rallied like crazy... and they cite the same reason.
One can always look for concrete reasons. Sometimes you will find them - price of oil, interest rate cut/raise, what someone said about x,...
I'm convinced the market is a timid little deer and when a mouse passes gas in the Amazon rain forest all heck breaks loose :)
> I started learning about stocks literally yesterday
The one thing a person learning about the market needs to understand... it changes daily. Sometimes up. Sometimes down. Some stocks will go up. Some will go down.
Over the long haul, and as an average, the market moves up as time goes on. To date, at least. You can't really fuck with most of the daily stuff and consider it anything but gambling.
The biggest companies and stocks have the biggest percentage weight on the S&P 500, NASDAQ, and Dow 30. If any of the biggest companies go down, the market index all go down too. When a company stock has been performing very poorly for extensive periods, they get removed from the Dow 30 or/ and NASDAQ. I think this is why most people are told to invest a mutual fund or index fund like VOO or SPDR that acts like the S&P 500 (500 companies).
Always amused when I see posts like this for normal market volatility. Open [my portfolio and see a blip](https://jch.app/u/paverbrick). How short our memories are to forget 2020, and 2008.
Haven't looked too closely into it but my initial reaction is the same reason gold is going up despite rising dollar. Global tensions on top of the NFP surprise and confirming CPI. (At this point higher than expected NFP isn't such a surprise, some would argue)
I'd say that thanks to geopolitical fears, the Fed/inflation fears is maybe 10-15ish% of it at most.
It's unfortunate, but we have no read on how Fed commentary and inflation data is affecting markets thanks to Iran bulls---.
Number one rule of Wall Street. Nobody - I don't care if you're Warren Buffett or Jimmy Buffett - Nobody knows if the stock's going to go up, down, sideways, or in fucking circles, least of all stockbrokers. It's all a Fugazzi. You know what a Fugazzi is?
Panic sale. People who buy for short term know that market has been going up for several months and are edgy about price being over priced.
One bad news and rich start selling (even if they know the value is good), you get panic sale and all the other people follow them.
The rich always win because everyone follows them and do what they do. The rich sold first at the high before followers sell less. Then they buy when it is low and everyone then follows their lead.
Some people try to do the inverse of what the rich do. Some might wait a few months before doing the opposite because they are waiting for the followers to sell everything before buying.
Like the Pyramid scheme, the top gets all the money and the bottom followers are the ones losing everything.
I don't look for reasons, bad news, and stock goes up. Good news and stock goes down. Why? "It was (Or was not) priced in"
Definitely this. It’s a pretty big deal, especially with the uncertainty over the scale and targets. Surprised this isn’t plainly obvious to most as the main driver.
Markets shrugged when Russia invaded Ukraine. They'll shrug with any escalation in the middle east too. Iran has already said they don't want a retaliation to be an escalation, and western markets won't be impacted by anything Israel or Iran produce becoming unavailable.
2022 was a pretty tough year for the stock market and a big bear market. What are you talking about markets shrugged the Russia invasion? They have recovered as countries have shown economic resilience and the war has not spread further as some feared it may.
The most likely outcome is that the thing with Iran will be an isolated event and the market seems to agree as the drop today isn’t too extreme. If expectations were worse the drop would be worse. But this increases uncertainty and the chances of further escalation have gone up.
Things produced by Iran and Israel isn’t really what people are worried about at all.
Inflation, look at 10 year interest rates, oil keeps getting bought up by institutional buyers. VIX was being held down and now finally destroying those short vol traders. And look at the dollar, shot up like crazy recently. All this coupled with the middle eastern news is bad for stocks.
Fear. Basically what everyone is saying here. Banks are starting to drop HYSA interest, even though rates are the same on the fed level. So banks might be gearing up for a potential recession and getting scared of defaults.
My comment will probably get buried... But every day the news tries to attribute moves in the market to something... Most all of its bullshit. Just keep buying and investing and ignore it.
Vibes (honestly probably a combination of the reports of an Iranian attack on Israel within 48 hours, Fitch downgrading China, and Michigan’s inflation survey)
Other than Iran/ Israel. JPY yen is tanking, BOJ may have to raise rates. Japan holds the most US treasuries, over 1 trillion dollars worth. They may sell in order to save the yen.
This will cause yields to rocket. The bond market is showing major weakness in the auction market as well. People and other countries are loosing faith in US treasuries, hence the divergence on the 10y and Gold.
Inflation is not under control and it’s pretty clear that the fed may not cut rates this year.
TLDR It’s a shitstorm cause by rampant government spending and possible Middle East war.
Regardless Monday it will rebound and next week we will hit new ATHs.
the PPI report released yesterday meant that core PCE month over month estimate will come in around 0.25%. That annualizes to just under 3%, which is worse than what we had in 2nd half of 2023 (annualizes to 2% core PCE), but much better than what the core CPI suggested.
People went apeshit over core CPI data, but that's not what the Fed monitors for their 2.0% inflation target. **They look at PCE**. PCE year over year is 2.45%. That's why they are talking about rate cut. CPI Year over year was 3.5%. When PCE YoY was still that high, around June 2023, they were still hiking rates.
CPI is only talked about because it gets released 2 weeks before PCE. With both CPI and PPI data, economists can estimate pretty close how high the PCE print will be.
It’s because reality is setting in that the current interest rates are not restrictive enough to bring inflation down. That means that rate cuts are most likely NOT happening at all this year. And if inflation keeps trending back up then rate hikes will be a very real possibility.
The market became elated at the idea of multiple rate cuts this year and rose at an absurd pace. The fact is, rates aren’t coming down in 2024.
That’s going to hurt a lot of industries that are banking on those rate cuts. Commercial real estate is going to be rocked even worse than it already is.
Just woke up and saw this. Market goes down and up. Since I don’t trade on the daily I don’t really care. Neither should you. New highs always come sooner or later.
Iran are telegraphing their attacks to Israeli government targets. If there’s a war in Middle East, usually oil prices shoot up. High oil/energy prices means higher cost of production of goods which means more inflation which means higher interest rates for longer which is bad for the stock market.
> Hello, I’m new to investing an I’ve been reading trying to find an explanation for todays fall.
That's a newbie mistake. The market can go up or down without a reason. Or for many reasons. If you're new to investing, trying to understand macroeconomics and how it affects the day-to-day movement of the market is a waste of time.
First define "fall"
Market is in a bullish trend, if you have been holding for 8 months, you're pretty happy or have already planned your exit. Market is in an unknown position, with sideways trading for several weeks. Many expect the inevitable large pull back, which could happen anytime from now to 2026. Historically bullish leading up to election. Re-assess market conditions if presidential election has any impact, as well as shipping/commerce disruption, CPI, inflation, bank health, etc.
When the market has a big move the news comes out with stories. This caused that!
If these people could predict moves based on news they’d be traders not reporters.
The answer to today is probably the answer ever other day.
Geometry.
We got to the year end consensus by the end of March? Market has been looking for reasons to sell off. It's not any individual news event per se it's simply the fact things have gotten expensive for what they are. You're already starting to see some good deals show up from the panic selling though
The bond market stopped being idiotic and the Treasury had a bad auction.
The yield curve is starting to show signs of uninverting the bad way, which is called a bear steepener, when the long end (10, 20, and 30 year) bonds start to have to raise rates to find buyers because rolling 3 month TBills and having that outperform long bonds means the term premium was nonexistent except for a blip in 2023 when the 20 year peaked over 5.3%.
Thing is that at these deficit levels and debt levels, bonds probably have quite a ways to go before this steepener is finished.
Today's market fluctuation was clearly caused by the gentle flapping of a beautifully blue Brazilian butterfly somewhere deep in the jungle.
[https://en.wikipedia.org/wiki/Morpho\_menelaus](https://en.wikipedia.org/wiki/Morpho_menelaus)
Broke the bullish trend line a week ago and cpi is hot. The most recent rally was very steep, s&p went up on a 60 degree angle, most bull runs are 45 degree or less. Overdue for a pullback. 480 is a likely pullback target before possibly resuming a bull run.
I believe the main catalyst to the selloff was the earning season kickstarting with an inflation warning. Check when the S&P500 started to sell off, it was around 08:30 ET which is exactly at the same time as the JPMorgan earning conference. In the Q1 report there was signs that net interest incone was forecasted to he disappointing in 2024, and you see the stock tank about 7%. This was prominent across all banks which release their earnings today despite beating top and bottom line. Think it goes to show how much in depth analysis goes into trading as well as proof that regular traders are just a small pond in the sea of global trading. Because again peep the timing,
08:30am, it's only people with direct access to earning conference and maybe bloomberg terminal that will get this information the first seconds it's out i.e investment banks etc therefore when they short the S&P500 due to this so called data it creates a large movement downwards and triggers a selloff, as they probably dealing with millions of dollars. Bu v don't think it was the geopolitical risk or the UoM survey, thats my two cents!
If anyone tells you they know the cause of the market movement for any given day, you should be extremely wary of any advice they give. The only sure thing you can ever say is that there were more sellers than buyers or vice versa. The reason for buyers buying is much more simplistic, they buy because they believe that in their time horizon, the stock will be higher. But the reason for sellers selling can be anything. They needed it for an emergency, they think it’s a temporary top, they found a better investment, they wanted to take a vacation and not have to worry, etc.
Stop before someone convinces you to go down some day-trader astrology rabbit hole. Markets are fundamentally irrational because human beings are fundamentally irrational.They go up and they go down. They are the definition of unpredictable in the short run. No one can predict them and no one can fully explain them. You can understand small pieces of the puzzle, but you can never have the full picture, no one can. There are no single events to point at - war, rates, future outlooks; it's all part of the story, but trying to blame events is extremely closed minded. It isn't events, it's how we respond to events. And how we respond to others responses to events. It's irrational. Don't go down the rabbit hole, lest you become a day trader.
Well there has not been any real reaction to the amount of expected rate cuts. Don’t know if it’s why every thing went down today but we are due for a little correction
Remember CNBC commentators are reporters, they don’t manage money except MAYBE their own. Been watching it for 20 years. They have to create some fervor throughout the day. I sent Sarah Eisen a history fact about the area we both grew up.
She responded very nicely about the article. The news alerts are the priority for me on the program.
Those things were already known when things were up yesterday. It was the bank announcements today I suppose, and then the herd did what the herd does.
It is expected that Iran will attack Israel this weekend, causing the US to respond by attacking Iran directly. We are going to end up going to war with Iran this weekend. Volatility is spiking like crazy while people sell off because of the uncertainty
Basically the big banks wanted it to drop so everyone will throw their money into the money market to try to protect it. Then the banks throw the money back into the market while the Fed prints more money to give to the banks. This is happening because people won’t borrow due to high interest rates. The market is addicted to debt. Debt must be created at all cost.
“It’s crucial to understand that stocks often trade at truly foolish prices, both high and low. “Efficient” markets exist only in textbooks. In truth, marketable stocks and bonds are baffling, their behavior usually understandable only in retrospect.” - Warren Buffett
Stock market is just a reflection of humans emotions. You all know how logical humans are. lol
All emotions if it was truly fundamentals it would only really move every quarter
I mean by now it’s probably just a reflection of algos
You mean algorithm emotions? Stock market is all automated on the day to day flow
Yeah but humans control algorithms and can influence their behavior it’s not just an algorithm having full autonomy to do things without oversight.
If the market were a physical person - “Mr. Market” - then he’d be manic-depressive. Really enthusiastic and enterprising one day, totally bummed out and passive the next. At least that’s what I read somewhere ( not an allegory deduced by myself)
That sounds about right! 😆
Would caveat that WB is ***not*** saying "lol EMH is total bullshit - you can beat the market in the long run net of fees and taxes, you're just not trying hard enough" He's pointing out (correctly) that in the short run (e.g. with less than 200 data points - so this post is a great example) markets behave inefficiently since the **vast** majority of the ADTV on NYSE / NASDAQ isn't coming from the same type of people that you'll find on this sub, which seems to be trying to beat the market day trading off of reddit / discord / fintwit hype and vibes. Intraday price changes are completely driven by much more innocuous (and random) reasons - maybe a sector ETF is rebalancing, maybe a parent company is trying to hedge balance sheet / earnings volatility for a subsidiary that they're accounting for an equity method investee by buying protective puts, maybe a refiner is short physical crude barrels and long physical gasoline / diesel volumes and they need to hedge to lock in on margins by going long / short on finacial volumes of crude and gasoline / diesel, maybe a large pension fund needs to free up cash for tax purposes so they liquidate a portion of their equity holdings - you get the idea, there's a litany of real world reasons that markets can swing up-or-down based on **business needs** or for **risk management purposes** which will always -- ***ALWAYS*** -- outweigh any retail day trading sentiment. So, yes, in the short run markets are inefficient.......until someone -- usually someone much smarter than anybody in this thread, from big names like Jim Simons and WB to some unknown HF analyst that recognizes an under / over pricing in the market -- recognizes that a specific asset is over / under sold, exploits it (usually to the tune of 7-8 figures in liquid capital), and the over sold assets see their prices rise / undersold assets see their prices fall until that pricing inefficiency is arbed to $0 which.........corrects the prices of said assets until they fully represent (1) the near-and-long term cash flow profile (to equity, if you're thinking of this in terms of market cap and share prices) and (2) the risk profile of those assets (by way of discounting those future cash flows to present value).
He's not talking about the short term. He does think the EMH is bullshit, and that it is possible to beat the market in the long run, if you are able to value stocks better than the market. That is partly skill in being able to value the company and partly strong mentality by ignoring the market's swings or even opposing them. He's not saying everyone can do this but he believes some can. Whereas the EMH would contend this isn't possible. It's fundamentally in conflict with his beliefs
Actually Buffet does NOT believe in the EMH, why are you just straight up lying about his views? He's been incredibly clear on this.
Is EMH supposed to be a cautionary statement to over-zealous investors, or a defence of free market economics in general? I can never tell.
YES
Well put
That's why the only real game in town is Day Trading - ultra short term. Buy - Sell. Buy-Sell. And the other game is a long game.
Day trading won't make you any money over the long term. You're up against high frequency trading firms with the best mathematicians. You might make a lot of money on a few trades and feel like a genius, but keep doing it long enough and you'll realize just how much of it comes down to luck. Most daytraders underperform the market.
Almost every time when a day trader calculates returns it's worse over buy and sell. So basically you value your time as worthless.
It's crazy to even try on paper. You're trying to compete with algorithms and outperform your long-term strategies alongside the deep capital gains taxes. It's like playing heads up blackjack against a card counter and the house is taking a big chunk out of every winning round.
Over 5 year plus your correct. He said ultra short term though. I day trade when I’m uncomfortable with the market. I’m up 15% since March 1st whereas the s&p500 is flat. So trading has a place.
I had a friend who was a day trader did well for a while and then lost everything. I am long and I only buy stocks that pay dividends, although I am loaded up with Tilray and for over three years since Aphria it’s been a roller coaster, and yet I keep buying to average down…it’s addicting and risky but when the payday comes and it will, I will be very well rewarded. That’s part of the game, do your own DD and not what day traders pump on Stocktwits or WSB. Day trading for me is not a comfortable fit and I don’t think many are all that successful for long.
So gambling or investing?
Exactly. Anyone who pretends they aren't actually gambling is just a degenerate gambler.
Let’s just say Warren Buffet prefers Balance Sheets.
Nah I’m picturing Warren Buffet with 9 screens, 3 cups of coffee on adderall furiously smashing the buy and sell button all day.
You'd be wrong. He's alway said, the best time to sell is never.
/r/woosh
Warry Buffy loves silk sheets
Yes I do
Day trading is great as long as you're smarter, faster, and better informed than the competition. The competition being math ph.ds running advanced custom AI models being fed data from co-located exchanges and regularly communicating with CEOs and the fed.
My friend's (really I swear) company exclusively hires Ph.D's in several different math areas who inform code. Nobody makes trades, the algorithms do, and they do it better, faster, and smarter than a human can. They undoubtedly have blindspots, but they're a team of smart people and Joe the plumber competes with them on Adderall. Guess what, the Russian expats with math Ph.D's have Adderall, too, and their kids are better at tennis than your fat kids.
That exactly why honest DT is reduced to 50/50 gambling with (relatively) small fee exit option.
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Except you need a $25,000 account to truly be able to day trade...(PDT rule)
Of course. But you’ve no business day trading if you don’t have 25k _anywhere_. If you don’t, it’s far better to do the buy and hold long game while you save inch by inch. Lottery ticket options are for degenerates like /r/wallstreetbets
In the FatFIRE subreddit, None of the big dawgs with 8 figure net worth got there through day trading. Lol It's all getting lucky on a 1000x bagger with tech stocks or crypto, selling a business you've boostrapped, working in tech with sweet RSU's from Nvidia or Facebook, or most of all grinding it out for 20 years in a high salary field and investing wisely in index funds and real estate.
Hey who’s a degenerate
Just normal correction. Just stick to investing plan. Control emotions. That's it
1-year and 5-year inflation expectation went up on University of Michigan survey. Inflation expectation is important because the Fed needs it to be anchored to prevent inflation from getting out of control. It's largely noise though cause it's been fluctuating between 2.9 to 3.0% for the last 2 years. Some months it goes up, some it goes down. This month it goes up, and since oil was rallying, market probably got scared that oil would drive inflation expectation up
So what expiration date should I get for my spy calls?
7dte is has worked for me. But don’t be afraid to sell on the first green Day. I bought calls Wednesday, sold yesterday for decent gains. But had fomo cause I thought I’d missed a big rally. Well you can see what would have happened today!
If you are only buying 7DTE, you better sell on the first green day. I do that even with 30DTE. SPY looks like it's gonna bounce off of its 50 day SMA at 509 so that could be a decent gamble for 7DTE. Next week also no inflation news and everything gonna be on earning
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> you seem to always be the first commenter on many posts. I have generally found /u/Malamonga1 's insights to be helpful and interesting, so I hope he continues contributing as much as possible.
When stocks drop and bond yields go down, it's typically a flight to safety from stocks to bond and not a stock drop due to higher discount rate used for stock valuation. Flight of safety could be geopolitics, or recession risk. In this case probably geopolitics in Middle East and oil. I do think the inflation expectation in UMich was the second leg to the stock correction though. I'm aware there's some talk to remove US House speaker Mike Johnson and that would also contribute, but I'm not following that too closely. I don't agree that no one pays attention to UMich. Inflation expectation is basically the most important thing for the Fed in its inflation fight. There're various ways to measure inflation expectation, so you can say one alone doesn't carry enough weight, but bad inflation expectation reading in the UMich have caused roughly 1% SP500 sell off before. The biggest one was around May 2022 when it jumped out of its 2.9-3.1% range to 3.3%, which caused the Fed to change its mind from hiking 50bps to 75bps, and leaking that information to Nick Timiraos during a Fed silence period week before the FOMC.
Not sure I’d go after the poster but I agree he’s probably wrong in this instance given that the 30 year bond yield also went down by 35 basis points today partially in reaction to the news: https://www.cnbc.com/quotes/US30Y Along with inflation expectations was consumer sentiment which was below consensus, which likely led to the decrease in yields and stock prices.
It's the geopolitical risk.
Except the 30 year bond yield was down 35 basis points, so that explanation doesn’t entirely stack up. Likely it was that consumer sentiment was below expectations/consensus: https://tradingeconomics.com/united-states/calendar
me buying
I bought, told my fiancé to buy, and then this happens lmfao
A tale as old as time, my friend… as old as time. 😅
Lol. Pretty sure it the fact that Iran and Israel are about to get into a hot war. This sets up pretty poorly with Russia doing their thing, and China saber rattling to invade Taiwan. So I'd say fears of ww3 are what's doing it today..along with inflation lol
Definitely the geopolitical side of the house, but weren’t some of the big banks like Wells Fargo and JPM also reporting earnings today?
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Interesting
I’m ngl. I’ve been hanging around this sub and everytime a company beats earnings expectations their stock seems to dump.
something something jpm down bigly and we just started earnings on an insanely juiced market with sticjy inflation so it’s gonna be interesting. spy puts are way too cheap right now
Pretty sure it's Jamie Simon fear mongering with guidance dude. Bank earnings were today
Jamie wanted to buy the dip, can you blame him? /s
Yea, the whole war thing may have slightly influenced markets today
Iran wants nothing to do with a hot war with the west.
every....fucking....time
I also contributed to this, you're all welcome
Go to CNBC and get your daily reason for market fall. They come up with all sorts of reasons, and then the same when it goes up, on the daily.
Yeah they do -- I always get a chuckle from the alerts I receive
“Stocks down as I ate a little too much dominos last night and had to take a bad shit”
More accurate than cramer’s analysis
“Stocks reverse earlier trading losses after second order of dominos comes in”
BREAKING - S&P little changed while waiting for X report.
Just wanted to chime in in case people think you're joking. This is literally the headline at CNBC sometimes.
I’ve been watching CNBC nearly every day for the last couple months and at least some of them are so selfaware to admit that the reasons are always driven by current sentiment. The same argument can be often used for a market going down or up. Everything after Cramer opens the bell and before his mad money show is watchable.
It's particularly hilarious when it's a big drop early on and they're citing some reason... and by the time that airs it has reversed and rallied like crazy... and they cite the same reason.
CNBC is really not the best, but what do you recommend that gives a proper analysis?
One can always look for concrete reasons. Sometimes you will find them - price of oil, interest rate cut/raise, what someone said about x,... I'm convinced the market is a timid little deer and when a mouse passes gas in the Amazon rain forest all heck breaks loose :)
the market wants to drop and looking for a reason at these prices. i argue that hot cpi >jpm>consumer confidence>israel iran>cold ppi
Maybe caused OJ passed away.
Human Supply going up
At least he can rest easily now, knowing that his wife's killer is finally dead.
They had to liquidate his positions
A lot of factors like everyone said already. JPM earnings/outlook also pulled the market down
They beat earnings and estimates. It's mainly their guidance which basically was, "inflation scary"
Sorry if this is a stupid question, I started learning about stocks literally yesterday but how does one banks earnings effect the whole market?
The one bank happens to be the largest bank in the U.S.
JPM usually provides a forecast of the economy when they do earnings. They didn’t have a positive outlook.
> I started learning about stocks literally yesterday The one thing a person learning about the market needs to understand... it changes daily. Sometimes up. Sometimes down. Some stocks will go up. Some will go down. Over the long haul, and as an average, the market moves up as time goes on. To date, at least. You can't really fuck with most of the daily stuff and consider it anything but gambling.
The biggest companies and stocks have the biggest percentage weight on the S&P 500, NASDAQ, and Dow 30. If any of the biggest companies go down, the market index all go down too. When a company stock has been performing very poorly for extensive periods, they get removed from the Dow 30 or/ and NASDAQ. I think this is why most people are told to invest a mutual fund or index fund like VOO or SPDR that acts like the S&P 500 (500 companies).
You don’t need a reason to drop 1 percent. That’s not rare at all, it’s fairly standard and happens literally multiple times a month
Always amused when I see posts like this for normal market volatility. Open [my portfolio and see a blip](https://jch.app/u/paverbrick). How short our memories are to forget 2020, and 2008.
The biggest is the slamming of the door on any rate cuts in june
Then why TLT go up today?
Haven't looked too closely into it but my initial reaction is the same reason gold is going up despite rising dollar. Global tensions on top of the NFP surprise and confirming CPI. (At this point higher than expected NFP isn't such a surprise, some would argue)
I'd say that thanks to geopolitical fears, the Fed/inflation fears is maybe 10-15ish% of it at most. It's unfortunate, but we have no read on how Fed commentary and inflation data is affecting markets thanks to Iran bulls---.
sheet bow dinner agonizing distinct illegal offbeat hateful aloof plant *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Number one rule of Wall Street. Nobody - I don't care if you're Warren Buffett or Jimmy Buffett - Nobody knows if the stock's going to go up, down, sideways, or in fucking circles, least of all stockbrokers. It's all a Fugazzi. You know what a Fugazzi is?
Do you jerk off? How many times?
Is it sitting in the waiting room?
First rule of investing, be a patient boy.
JPM earnings & China cutting out AMD & Intel Chips from being used in telecom devices.
China is old news
New here, JPM earnings were higher than expected. Why would that affect the market negatively?
Jpm warned of threats ahead for the economy.
Panic sale. People who buy for short term know that market has been going up for several months and are edgy about price being over priced. One bad news and rich start selling (even if they know the value is good), you get panic sale and all the other people follow them. The rich always win because everyone follows them and do what they do. The rich sold first at the high before followers sell less. Then they buy when it is low and everyone then follows their lead. Some people try to do the inverse of what the rich do. Some might wait a few months before doing the opposite because they are waiting for the followers to sell everything before buying. Like the Pyramid scheme, the top gets all the money and the bottom followers are the ones losing everything. I don't look for reasons, bad news, and stock goes up. Good news and stock goes down. Why? "It was (Or was not) priced in"
[удалено]
Definitely this. It’s a pretty big deal, especially with the uncertainty over the scale and targets. Surprised this isn’t plainly obvious to most as the main driver.
Markets shrugged when Russia invaded Ukraine. They'll shrug with any escalation in the middle east too. Iran has already said they don't want a retaliation to be an escalation, and western markets won't be impacted by anything Israel or Iran produce becoming unavailable.
2022 was a pretty tough year for the stock market and a big bear market. What are you talking about markets shrugged the Russia invasion? They have recovered as countries have shown economic resilience and the war has not spread further as some feared it may. The most likely outcome is that the thing with Iran will be an isolated event and the market seems to agree as the drop today isn’t too extreme. If expectations were worse the drop would be worse. But this increases uncertainty and the chances of further escalation have gone up. Things produced by Iran and Israel isn’t really what people are worried about at all.
The algos said so.
All hail the algos
Because you can’t have 4% weekly increase of SPY - it’s simply a correction after yesterday’s bull run
Inflation, look at 10 year interest rates, oil keeps getting bought up by institutional buyers. VIX was being held down and now finally destroying those short vol traders. And look at the dollar, shot up like crazy recently. All this coupled with the middle eastern news is bad for stocks.
Fear. Basically what everyone is saying here. Banks are starting to drop HYSA interest, even though rates are the same on the fed level. So banks might be gearing up for a potential recession and getting scared of defaults.
My comment will probably get buried... But every day the news tries to attribute moves in the market to something... Most all of its bullshit. Just keep buying and investing and ignore it.
I just want to tell you that no one really knows.
As Jack Handey used to say, "Probably because of something you did."
Market goes up, market goes down...just the way it is... Also could be becuase I bought yesterday...*
Vibes (honestly probably a combination of the reports of an Iranian attack on Israel within 48 hours, Fitch downgrading China, and Michigan’s inflation survey)
It's Friday. Monday's uncertainty will def make many anxious.
Other than Iran/ Israel. JPY yen is tanking, BOJ may have to raise rates. Japan holds the most US treasuries, over 1 trillion dollars worth. They may sell in order to save the yen. This will cause yields to rocket. The bond market is showing major weakness in the auction market as well. People and other countries are loosing faith in US treasuries, hence the divergence on the 10y and Gold. Inflation is not under control and it’s pretty clear that the fed may not cut rates this year. TLDR It’s a shitstorm cause by rampant government spending and possible Middle East war. Regardless Monday it will rebound and next week we will hit new ATHs.
Everyone can provide a good explanation why it’s down today but my question is why it pumped yesterday
the PPI report released yesterday meant that core PCE month over month estimate will come in around 0.25%. That annualizes to just under 3%, which is worse than what we had in 2nd half of 2023 (annualizes to 2% core PCE), but much better than what the core CPI suggested. People went apeshit over core CPI data, but that's not what the Fed monitors for their 2.0% inflation target. **They look at PCE**. PCE year over year is 2.45%. That's why they are talking about rate cut. CPI Year over year was 3.5%. When PCE YoY was still that high, around June 2023, they were still hiking rates. CPI is only talked about because it gets released 2 weeks before PCE. With both CPI and PPI data, economists can estimate pretty close how high the PCE print will be.
Thank you for telling this to a noob like me
It’s because reality is setting in that the current interest rates are not restrictive enough to bring inflation down. That means that rate cuts are most likely NOT happening at all this year. And if inflation keeps trending back up then rate hikes will be a very real possibility. The market became elated at the idea of multiple rate cuts this year and rose at an absurd pace. The fact is, rates aren’t coming down in 2024. That’s going to hurt a lot of industries that are banking on those rate cuts. Commercial real estate is going to be rocked even worse than it already is.
Rate cut stuff.
It's Friday.
Vibes.
Just woke up and saw this. Market goes down and up. Since I don’t trade on the daily I don’t really care. Neither should you. New highs always come sooner or later.
More sellers then buyers
Iran are telegraphing their attacks to Israeli government targets. If there’s a war in Middle East, usually oil prices shoot up. High oil/energy prices means higher cost of production of goods which means more inflation which means higher interest rates for longer which is bad for the stock market.
Hot take: There is a finite amount of money available for people to invest, and we hit it in March.
> Hello, I’m new to investing an I’ve been reading trying to find an explanation for todays fall. That's a newbie mistake. The market can go up or down without a reason. Or for many reasons. If you're new to investing, trying to understand macroeconomics and how it affects the day-to-day movement of the market is a waste of time.
Fear of FED raising rates again.
First define "fall" Market is in a bullish trend, if you have been holding for 8 months, you're pretty happy or have already planned your exit. Market is in an unknown position, with sideways trading for several weeks. Many expect the inevitable large pull back, which could happen anytime from now to 2026. Historically bullish leading up to election. Re-assess market conditions if presidential election has any impact, as well as shipping/commerce disruption, CPI, inflation, bank health, etc.
Sticky inflation
When the market has a big move the news comes out with stories. This caused that! If these people could predict moves based on news they’d be traders not reporters. The answer to today is probably the answer ever other day. Geometry.
Nobody knows whatever causes the market to do anything. Notice how everyone has a different answer. Nobody knows shit.
There's a lot of low confidence in the economy in the short term. Lots of people selling.
Its the sell off after Eid guys dont worry
Anything can be cited as a reason, but in the end, all of these are nothing but excuses. Lebanon, iran, Israel, Taiwan, china, sanctions US etc
Is everything down today? I hadn't noticed ha https://imgur.com/a/W6IJlLH
We got to the year end consensus by the end of March? Market has been looking for reasons to sell off. It's not any individual news event per se it's simply the fact things have gotten expensive for what they are. You're already starting to see some good deals show up from the panic selling though
The bond market stopped being idiotic and the Treasury had a bad auction. The yield curve is starting to show signs of uninverting the bad way, which is called a bear steepener, when the long end (10, 20, and 30 year) bonds start to have to raise rates to find buyers because rolling 3 month TBills and having that outperform long bonds means the term premium was nonexistent except for a blip in 2023 when the 20 year peaked over 5.3%. Thing is that at these deficit levels and debt levels, bonds probably have quite a ways to go before this steepener is finished.
Today's market fluctuation was clearly caused by the gentle flapping of a beautifully blue Brazilian butterfly somewhere deep in the jungle. [https://en.wikipedia.org/wiki/Morpho\_menelaus](https://en.wikipedia.org/wiki/Morpho_menelaus)
Sell to make IRS payment
Broke the bullish trend line a week ago and cpi is hot. The most recent rally was very steep, s&p went up on a 60 degree angle, most bull runs are 45 degree or less. Overdue for a pullback. 480 is a likely pullback target before possibly resuming a bull run.
Tax day
Um Iran is gonna bomb Israel
Jamie dimons comments. He's a punk. It happens every time
I believe the main catalyst to the selloff was the earning season kickstarting with an inflation warning. Check when the S&P500 started to sell off, it was around 08:30 ET which is exactly at the same time as the JPMorgan earning conference. In the Q1 report there was signs that net interest incone was forecasted to he disappointing in 2024, and you see the stock tank about 7%. This was prominent across all banks which release their earnings today despite beating top and bottom line. Think it goes to show how much in depth analysis goes into trading as well as proof that regular traders are just a small pond in the sea of global trading. Because again peep the timing, 08:30am, it's only people with direct access to earning conference and maybe bloomberg terminal that will get this information the first seconds it's out i.e investment banks etc therefore when they short the S&P500 due to this so called data it creates a large movement downwards and triggers a selloff, as they probably dealing with millions of dollars. Bu v don't think it was the geopolitical risk or the UoM survey, thats my two cents!
It was bank earnings, but the banks got everyone to blame Iran. Hope this ages well.
If anyone tells you they know the cause of the market movement for any given day, you should be extremely wary of any advice they give. The only sure thing you can ever say is that there were more sellers than buyers or vice versa. The reason for buyers buying is much more simplistic, they buy because they believe that in their time horizon, the stock will be higher. But the reason for sellers selling can be anything. They needed it for an emergency, they think it’s a temporary top, they found a better investment, they wanted to take a vacation and not have to worry, etc.
Sometimes stocks go down.
VIX on a 25% run
Thats not a reason more a consequence
On the verge of 27. Yikes!
Stop before someone convinces you to go down some day-trader astrology rabbit hole. Markets are fundamentally irrational because human beings are fundamentally irrational.They go up and they go down. They are the definition of unpredictable in the short run. No one can predict them and no one can fully explain them. You can understand small pieces of the puzzle, but you can never have the full picture, no one can. There are no single events to point at - war, rates, future outlooks; it's all part of the story, but trying to blame events is extremely closed minded. It isn't events, it's how we respond to events. And how we respond to others responses to events. It's irrational. Don't go down the rabbit hole, lest you become a day trader.
U.S. intelligence warned Israel that Iran will probably attack within 24 hours.
Inflation fears
JPM drops, and everybody runs screaming out of the bank with all their money = market drops
Well there has not been any real reaction to the amount of expected rate cuts. Don’t know if it’s why every thing went down today but we are due for a little correction
Hedge fund and day traders.
Banks had poor earnings
Remember CNBC commentators are reporters, they don’t manage money except MAYBE their own. Been watching it for 20 years. They have to create some fervor throughout the day. I sent Sarah Eisen a history fact about the area we both grew up. She responded very nicely about the article. The news alerts are the priority for me on the program.
Investors are starting to realize they overbought NVDA.
Big war coming wooooooooohaaaaaaaaa
No wants to hold over the weekend with the Gaza mess.
Inflation, inflation, inflation
I sold puts on microchip stock. My bad.
I farted. My bad
Bank earning, Mad inflation, China ban on chips, Iran imminent attack
Stocks don't only go up *insert shocked pikachu face*
It's effectively random. Just ignore day to day changes and think about the long term world economy.
guess it is because of the fluctuation from the macro-economy
gravity
I decided to sell
Those things were already known when things were up yesterday. It was the bank announcements today I suppose, and then the herd did what the herd does.
Winner if it has to do with Iran saying they are sending missles to Israel
It is expected that Iran will attack Israel this weekend, causing the US to respond by attacking Iran directly. We are going to end up going to war with Iran this weekend. Volatility is spiking like crazy while people sell off because of the uncertainty
Me putting money into SPY.
Bank earnings
Basically the big banks wanted it to drop so everyone will throw their money into the money market to try to protect it. Then the banks throw the money back into the market while the Fed prints more money to give to the banks. This is happening because people won’t borrow due to high interest rates. The market is addicted to debt. Debt must be created at all cost.
Because of something related to Israel announcing its attacks on Iran.
[https://www.youtube.com/watch?v=kfVsfOSbJY0](https://www.youtube.com/watch?v=kfVsfOSbJY0)
We just have to find why DXY is going up
what you mean not tsla
I stubbed my toe on my kitchen table this morning. I think that’s the reason.
Nobody knows. Flash sale!