S&P/ASX 200 (ASX:XJO) - XJO - Bear Posts only (Factors which might cause the markets to fall), page-239 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Originally posted by Ewebute ↑

Thank you for your message. I appreciate your thoughts. I will respond to each of your main points.

"i think you forget the bigger picture and that is that a crash is not coming"
- Interest rate increases are very likely to occur starting March at the latest. These always have a crash effect on markets. I have provided charts many times previously.

"in terms of probability, there will be a correction which we are experiencing now but then im betting that there will be a period of consolidation and range bound trading. iron condor options strategy?"
- What probability are you working on? Can you provide some evidence / charts etc?

"if gundlach is right, there are still huge gains held in these mega cap stocks"
- I think I watched a video on Gundlach (I will check later) and I think he said the markets are going to come down. Read what @onetricky mentioned before about Apple earnings coming out next week and the information that is already out there (iPhone 13 sales are rubbish, issues with production etc). This is the last tech stock to hold the markets up. Its over next week at the latest. We might have a few day push, but then its gone.

"so long as company and consumer balance sheets remain strong and the price of energy and housing decelerates, i dont see any major further deterioration of the economy"
- If you have been watching the results from US banks over the last few days.. they haven't been strong. They are getting decimated. More earnings reports to come. Energy as I pointed out before is up over the Russia issues and once that resolves through war or standing down, prices will fall - not as much to do with economy. Housing wont decelerate, it will crash - refer interest rates above.

"however wi will have likely seen a peaking in PMI's and perhaps that will start cooling inflation down."
- Inflation only slows down on Quantitative Tapering. Governments supplying money to the economy creates bubbles and when the taps turn off, these cause markets to fall (and with all the debt in the system possibly plummet).

Can you please provide charts showing a slow down in inflation / PPI?

"there will be a better time to enter a short position and i dont think its now anymore."
- Maybe not today to enter shorts (unless you don't already have an exposure therefore I personally would start a small one) but we may have a small bounce over the next few days. This would be an opportunity to add to / place a large short bet. Just my opinion for my own trading style though. The XJO pushed down this morning and it has fallen much further... @onetricky pointed out... longs ruled on IG but do you think this is shorts entering or maybe longs dumping? He also pointed out -2% today.. we are getting closer by the minute

These markets haven't even started to fall. I agree we MAY have a small bounce, but the direction is presently down. A break of 7150 support and its going to get smashed.

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firstly whats your definition of a crash? the evidence is in the historical charts, look at 2018 for example. bear market but not a crash. interest rates going up in march is a given but the number of times the fed will raise is uncertain.

as far as inflation goes, well thats a mystery neither you or i or anyone for that matter can predict. there is no doubt supply chains are adding to that issue and they will be eased over time. saying inflation only goes down on quantitative easing is anything but universal law.

the slow down in the the rate of change for ppis and cpis is there, just look at the last stats.

i guess the main question is that you need to provide the reason why we are expecting a crash. even yield curves are not pointing to an imminent crash, the widest followed indicators of a crash. we are currently repricing and taking some profit off the table.

i understand youre all excited because youve made a right call, but the markets are not in for a crash as that "crash" is happening as we speak. march 2020 capitulation was a crash. this is merely a correction where idle money will be deployed because TINA.

my money is for the indexes to see rangebound trading action with the top set in december.

and if markets continue to decline, it will probably cut the rate hike expectations along with inflation expectations which should coincide with continued improvement of supply chains.

anyone adding a short at the current levels is not getting the right price at all imo. "these markets havent even started to fall" sounds like irrational exuberance. markets havent even started to fall LOL. what do you call ~7.6% from the top on the sp500? plus the continuing rolling corrections inside all indexes....