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When can we call it a stock market "crash"?

Discussion in 'Coffee Shack (Daily News/Economy)' started by <SLV>, Feb 5, 2018.



  1. Joe King

    Joe King Gold Member Gold Chaser

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    gnome likes this.
  2. nickndfl

    nickndfl Midas Member Midas Member Site Supporter ++

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    More jobs and higher interest rates are coming. The dems will spin it as any increase in take home pay and tax savings will be offset by inflation. You cannot win with them no matter what is done.
     
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  3. ZZZZZ

    ZZZZZ Seeker

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    I'm still holding my $100 trillion. I believe in paper money. :belly laugh:

    [​IMG]
    .
    .
     
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  4. FthePolice

    FthePolice Seeker

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    Nikkei is down 4.5%
     
  5. oldgaranddad

    oldgaranddad Gold Member Gold Chaser Site Supporter ++

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    The XIV - The Short VIX ETF has lost 90% of its value in after hours trading. It was $99 at 4pm and by 6:30 PM it was at $10.03. As I write this it bounced back up to $16 and change but what a fall! Someone is going to hurt!
     
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  6. FthePolice

    FthePolice Seeker

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    I remember checking the Asian Markets into the early mornings back in 2008 when the economy went to crap. Hope I am not going to be doing it again.
     
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  7. Goldhedge

    Goldhedge Moderator Site Mgr Site Supporter

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    Just curious what folks use to follow the 10yr yield?
     
  8. oldgaranddad

    oldgaranddad Gold Member Gold Chaser Site Supporter ++

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    I think Yogi Berra was correct: "It's déjà vu all over again."
     
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  9. the_shootist

    the_shootist The war is here on our doorstep! Midas Member Site Supporter ++

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    These are the times where diversification allows you to enjoy the show and lets you sleep well at night!

    popcornbird.gif
     
    Last edited: Feb 5, 2018
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  10. oldgaranddad

    oldgaranddad Gold Member Gold Chaser Site Supporter ++

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    I've diversified into silver, gold, platinum, palladium and not to forget brass, copper and lead -- all of the precious metals.
     
  11. the_shootist

    the_shootist The war is here on our doorstep! Midas Member Site Supporter ++

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    Yes sir!!! Cold forged steel makes up a significant portion of my 'precious metals' collection. Of course cold forged steel is virtually worthless without the ammo!
     
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  12. Weatherman

    Weatherman In GIM since 2006 Gold Chaser Site Supporter

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    The DJIA rose 20,000 from its low 9 years ago to the high. Here are some Fibonacci levels to look for during this pullback:

    DJIA Fib.jpg
     
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  13. ZZZZZ

    ZZZZZ Seeker

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  14. hoarder

    hoarder Midas Board Mmbr Platinum Bling

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    The wealthy banksters are the ones short selling when there is a crash. They are the first to know about them because they create them.

    Just the same, it would suit me just fine if they all took swan dives off buildings in Lower Manhatten anyway.
     
  15. Irons

    Irons Deep Sixed Site Supporter Mother Lode

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    Glad to see someone is paying attention. We all knew this was one of their tools.
    It's also a diversion to direct the "news" away from all the proven corruption that is coming out.

    Michael Savage Rings The Alarm After Stock Market Tanks: ‘Deep State’ Trying To DESTROY TRUMP! (AUDIO)
    February 5, 2018 by Joshua Caplan 161 Comments
    On his nationally-syndicated radio program Monday, talk show legend and New York Times best-selling author, Dr. Michael Savage, accused the ‘Deep State,’ of tanking the stock market in an effort to ‘destroy’ President Trump.

    SAVAGE:
    “Trump’s stirring SOTU speech last week was so great that even CBS admitted 75 percent of the people who watched it approved of it and loved it. So what happened right afterwards? The Establishment, meaning the ‘Deep State,’ call it whatever you want, went into overdrive to destroy Trump, or try to destroy him, where he is strongest, because they couldn’t get him where they thought he was weakest. So they are taking the market down. They are trying to hurt you. They are the enemies of the average American. Make no mistake about it, they are going for you!
    These people are so evil and so power-drunk that they’d burn the nation to the ground rather than let Donald Trump live another day in office.”

    http://thegatewaypundit.com/2018/02...-deep-state-trying-destroy-potus-trump-audio/
     
  16. newmisty

    newmisty Duppy Conqueror Midas Member

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    Can't forget to add the train crash too.
     
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  17. oldgaranddad

    oldgaranddad Gold Member Gold Chaser Site Supporter ++

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    Amtrak has that covered.
     
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  18. ZZZZZ

    ZZZZZ Seeker

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    F Metals Report‏ @TFMetals 1h1 hour ago
    Oh shit...

    [​IMG]

    Futures are continuing today's "mini-crash" overnight. DJIA down 900 points below fair value, Japan trading hit a circuit breaker.
    Stay tuned!
     
  19. ZZZZZ

    ZZZZZ Seeker

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    Basically, financial SkyNet has failed. The algorithms don't know what to do, other than sell and unwind everything as fast as you can. You can't be the bag-holder when the music stops.

    This may be the start of the Gray or Black Swan that brings down the Wall Street banksters. Unfortunately, they may take everyone else down with them.

    Keep your financial powder dry!

    "The Vol Market Finally Broke": A Quant Explains What Happened Today, And What Is Coming Tomorrow
    [​IMG]
    by Tyler Durden
    Mon, 02/05/2018 - 21:14
    48
    SHARES
    TwitterFacebookRedditEmailPrint

    By Charlie McElligott, managing director of cross-asset strategy at Nomura.

    Fade to Black

    The “grey swan” we all have spoken about for years—that being the absurd “tail wagging the dog” potential of VIX ETN market structure (inverse and leveraged products) AND the massive growth in “negative convexity” / “vol target” / “vol rebalancing” strategies to either generate extra income or “systematically allocate risk” (looks good in the prospectus, right?!) –finally “broke” the volatility market, and has now bled-through to the “underlying” spot equities market…as the short vol trade went “lights out.”

    The ETNs are the “patient zero” of this current market meltdown. It is estimated that there was anywhere from ~$125mm to $200mm of vega / VIX futs to BUY on the close from the two main “short VIX” ETNs that rebalance daily (XIV and SVXY). As S&P traded -50 handles AFTER the cash close from 4:00pm to 4:15pm into the market’s anticipation of the massive rebalancing of volatility (buy to cover) on the close, XIV then saw a delayed and terrifying ~-87 PERCENT move after the close, as some who owned XIV puts as crash protection sniffed this potential and speculated liquidation from the ETN, which is set per a rules-based system to buy back short vega after an 80% “crash trigger”(which again isn’t a certainty because they use a blend of 1st and 2nd month). The asset pool nonetheless was seemingly / largely wiped-out and the note is guaranteed to “pay out” to their shareholders as set per their prospectus. It is likely that this thing has indeed been “triggered” and will be forced to liquidate. SVXY doesn’t have the firm 80% “trigger” but too is seeing its NAV “wiped out” and is trading ~-80% post-close as well.

    The issue NOW is the pile-on going-forward across assets, as the systematic “short vol” community’s models are now completely toast, and they too will be forced to cover remaining “short vol” positions that didn’t trade today—i.e. BE PREPARED FOR A MAJOR VIX FOLLOW-THROUGH TOMORROW.

    VaR-based models need to be reset across all asset-class strategies, forcing further de-risking over the coming days and potentially weeks, as heads of funds and heads of risk try to figure out how much their models are forcing them to “gross-down.” Shorter-term vol target / vol allocation strategies (think CTAs) and longer-term models like risk-parity and too will reset and “rebalance” their risk (lower) as realized vols are re-priced. Structured products, annuities and other vehicles with built-in protection? Also purging exposure on the vol reset. Finally, it also shouldn’t be lost on the popularity of “short VIX” trades in the retail community, and the “butterfly flapping its wings” relationship to the recent melt-down in the crypto-currency space.

    The “white knight” of corporate buybacks (which by the way were running at 300% of volume today per a competitor as they were pumping the mandates to hold-up their stocks) will be extraordinarily tested with keeping the stock-market “propped up,” especially as the traditional active community is likely to back-away until there is a better sense on how this event shakes out… few will willingly be in there tomorrow prepared to catch this falling knife.

    Cross-asset, the trickle-down of unwinds is clearly a focal point from here. As noted two weeks back in the “Nomura Cross-Asset” piece, I’ve been focusing on the “risk” of positioning asymmetries with consensual “bearish rates” / “flattener” and “short USD” trades primarily, but too, crowded thematic equities position tied to the rates and USD trades (i.e. “long momentum” / “long tech / growth”).

    As such, the +7 Z-SCORE (relative to 90d move) today in the UST 2Y/ mongo bull-steepening seen in 5s30s (+7bps today, +17bps since Thursday) raises a “pain trade” red flag. Single-stock equities clearly took a hit on the back of the index moves, as thematic trades like “long US high beta”--which was +8.1% YTD on Jan 26th—are now -1.5% YTD after trading down -7.1% the past two sessions alone. The six-day move in US momentum longs has been -4 standard deviations (across all returns dating back to April ’13), only previously experienced during the “Flash Crash.”

    My model equity L/S portfolio experienced its worst day since the early Feb ’16 market-neutral unwind which occurred during the “great deflation scare.” Net / net, it wasn’t pretty out there.

    Buckle-up, because this move isn’t over yet.

    https://www.zerohedge.com/news/2018...-explains-what-happened-today-and-what-coming
    .
    .
     
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  20. <===Foolsgold

    <===Foolsgold Gold Chaser Site Supporter ++ Platinum Bling

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    Your broker is on line one something about a margin account...
     
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  21. ^updated^

    ^updated^ found a way in Silver Miner

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  22. the_shootist

    the_shootist The war is here on our doorstep! Midas Member Site Supporter ++

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  23. ZZZZZ

    ZZZZZ Seeker

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    "Margin call, Gentlemen!


    .
    .
     
  24. ZZZZZ

    ZZZZZ Seeker

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  25. Goldhedge

    Goldhedge Moderator Site Mgr Site Supporter

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    Kind of looks as if the 10 yr bond went up just before the market tanked...
     
  26. madhu

    madhu Silver Member Silver Miner

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    Sellers of puts on volatility index got wiped out by 80-90% fall triggering a margin call and or liquidation. The other survivors of this carnage may be forced to come up with higher margins.
    Volatility is going to continue.

    The next part, the stock prices have been engineered to be in a certain range with the companies announcing that they are going to support the stock price by corporate buy back. But if the volatility is high these companies don't want to catch a falling knife in terms of its own stock prices.

    PPT is MIA, 50 billions? being withdrawn from liquidity. Someone has to step up to bid up the market

    The market makers are not going to like that at all. Circuit breaker time
    7%, 13% 20%. But hope that's not going to be allowed.

    A lot of jargon but this is the best that I could get out of it
     
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  27. ZZZZZ

    ZZZZZ Seeker

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    I think you got the gist of it.

    The entire global financial system has become so intertwined and dependent on every little thing always being in line and predictable, it is very fragile.

    Using Jim Rickards' analogy, the collapse of VIX could be the snowflake that triggers the avalanche.
    .
    .
     
    Last edited: Feb 5, 2018
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  28. <SLV>

    <SLV> Gold Member Gold Chaser Site Supporter

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    Just under an hour until the opening bell. Sitting at -350 on the futures ticker.

    Any guesses where it will end today? It will probably tank at the opening, but I expect bargain-shopping bulls to make it try for a reversal. Maybe end up today? If so it is probably a dead cat bounce with further declines to end the week.
     
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  29. <SLV>

    <SLV> Gold Member Gold Chaser Site Supporter

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    Still too expensive:

    https://www.cnbc.com/2018/02/06/four-things-to-watch-for-a-market-bottom.html

    "The good news is the market is getting cheaper. We've gone from really overbought to oversold in a little more than a week. A week ago the forward price-earnings multiple for the S&P 500 was a pricey 18.5 well above the historic normal of 15 to 16. At the open Monday it was down to 17.9, at the open Tuesday it looks as close to 17.3...not dirt cheap, but a lot cheaper than a week ago."
     
  30. gliddenralston

    gliddenralston Gold Member Gold Chaser

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    I shored up all my finances when the dow was at 18,000, cause I thought it was in nose bleed heights. When it gets back to 18K guess what its still in nose bleed heights. The talking heads will be pumping it all the way down, just remember your responsible for yourself...these fukers DO NOT care about your money...they will say and do anything to preserve their precious stock market!!!!!
     
  31. Silver Art

    Silver Art Silver Art Bar collector Platinum Bling

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    The DOW futures have been trimming their losses. DOW futures are now down "only" 117 points. Nasdaq futures have turned positive. I think that we will finish on the upside in the stock market when regular trading stops at 4PM.
     
  32. Silver Art

    Silver Art Silver Art Bar collector Platinum Bling

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    I suspect that the stock market will still be expensive for a while longer unless we have many more 1000+ daily drops in the very near future that will bring it down to much lower levels than where it is now. Time will tell.
     
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  33. gliddenralston

    gliddenralston Gold Member Gold Chaser

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    The old dead cat trick, to suck in ur last dollars, this isn't a correction or a crash by any definition yet...wait till the big hammer falls.
     
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  34. Silver Art

    Silver Art Silver Art Bar collector Platinum Bling

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    Yep the hammer will fall on the stock market. It will be interesting to see how many 1000+ drops we will have this week.
     
  35. gliddenralston

    gliddenralston Gold Member Gold Chaser

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    It may or may not be this week or month but you can bet its coming. Its better to be out a year early than one day late!!!
     
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  36. the_shootist

    the_shootist The war is here on our doorstep! Midas Member Site Supporter ++

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    The market will rebound and metals will crash. It's inevitable!
     
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  37. Silver Art

    Silver Art Silver Art Bar collector Platinum Bling

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    Since I am not in the stock market, I am not worried about it very much. I am just watching from the sidelines. I just need to get some more popcorn.
     
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  38. Silver Art

    Silver Art Silver Art Bar collector Platinum Bling

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    Well.................................stock futures are currently trimming their losses and going positive and gold and silver are currently down............................................

    I think you are on to something. Stay tuned.............


    DOW currently down 531 points.
     
  39. the_shootist

    the_shootist The war is here on our doorstep! Midas Member Site Supporter ++

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    The Dow lost almost 2000 points in two days and metals barely moved. As a matter of fact silver took a hit while gold floated. There are no more rules!
     
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  40. gliddenralston

    gliddenralston Gold Member Gold Chaser

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    1. A wise man once told me, "Are you willing to risk losing up to 50% of your holdings in hopes of making another three %",... and it wasn't a stock broker.
     
    Last edited: Feb 6, 2018

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