How long until the market corrects?

[JustRalph]

I can’t imagine this market continuing like this.......

Trumps Tax cuts are going to help it........BUT

Eventually it has to fall back......predictions?

I say within 12-24 months.......October 2019 or shortly thereafter

I know almost nothing about the stock market, but this cannot go on forever........

[lamboguy]

every market pulls back at some point and bull markets become bear markets. but to time them is impossible!

[AltonKelsey]

I'd declare the result official at this point and all bets and calls for a market correction losers.

Timing is everything, if you bet on the downside you lost, and if you waited to buy, you lost.

[_______]

I'd declare the result official at this point and all bets and calls for a market correction losers.

Timing is everything, if you bet on the downside you lost, and if you waited to buy, you lost.

9 years of “this is going to end badly”.

And it will. Probably as soon as the last bear finally throws in the towel and decides they can’t lose in stocks.

Last year around this time, the market broke 20,000 and I made the brilliant call that it would see 19,000 before it saw 21,000. Went to a 30% cash position in anticipation of some bargains.

All that money got bled back in at higher prices over the next 4 months.

I’ve decided that I’m better off getting punched in the face than trying to time the market.

[AltonKelsey]

Markets sell off in order to shake weak hands.

Apparently , that scam stopped working, so the 'boys' decided that straight up was a better ploy.

Congrats to them

[Jeff P]

I'll be the first to admit we've been experiencing what appears to be an extended Goldilocks period...

But, if I recall correctly, wasn't there a rotation out of tech last fall?

Consider some historical data:

Priceline (PCLN)
2067.99 high on 08-08-2017
1630.56 low on 11-08-2017
(-21.15% off the high)

NVIDIA (NVDA)
217.36 high on 11-27-2017
180.58 low on 12-05-2017
(-16.92% off the high)

Arista Networks (ANET)
245.65 high on 11-21-2017
206.86 low on 12-05-2017
(-15.79% off the high)

Netflix (NFLX)
202.48 high on 11-06-2017
178.38 low on 12-04-2017
(-11.90% off the high)

The point I'm trying to make?

Haven't at least some investors been faced with a "correction" during this market? (Imo, more than one.)


-jp

.

[pandy]

I worked on the floor of the NYSE in '74. I started towards the end of the bear market which saw the Dow it 577! My dad was a broker working out of an office in Flushing, NY.

I eventually got a job as an order clerk, but my first job, which only lasted a month or so, was as a page, where you walk the floor taking orders back and forth to different specialists. I don't know if that's the way they do it now, but back then, the order clerk got the order over the phone and handed it to a broker, who then either delivered it to the Specialist (Specialists hold the book on a stock and set the buy and sell prices), or handed it off to a page who would deliver it to the Specialist.

I thought that you could get a much better feel for the market on the floor than in an office. I remember telling my Dad that the sentiment among the brokers on the floor was that the end of the bear market was imminent. I would hear them saying things like, "There are so may bargains....Next year is going to be a good one."

Sure enough, the market bottomed out in December and started to go up, and it went up 48% in the next five months. And the big money was loaded up for it, believe me. The rich got richer, as usual.

Predicting the end of a bull market is tougher. You have to watch for wild speculation. When the dot com bubble burst, for instance, biotech companies had recently emerged and they were the hot thing, and stock prices on some of the biotech were jumping 60 points in a day, and plummeting just as fast. People who weren't normally in the market were suddenly trading. My dad told me, "there's wild speculation, the bull market is going to end soon."

Same thing happened in the real estate bubble, people were "flipping houses" like crazy towards the end. When it looks like easy money, it's about to collapse.

I don't see wild speculation right now, except for in some of the crypto currencies, which could be a warning sign. But the market is different now because so much of the corporate profits come from overseas, it makes it harder to get a feel for the market. The key is, how much of the Trump rally was in anticipation of the tax relief and the cutting of regulations?

Still, corporate profits dictate the market and profits are going to be good this year.

[incoming]

The markets survived 8 years of the Obama adminstration with record breaking growth. They have also survived over a decade of the economy bumping along the bottom with minuscule growth. I would say that some very smart people have a very good read on how the markets work. Unfortunately, I got out in 2010.
:mad::blush:

[boxcar]

I'm with Lamby, and others here, who think the market is impossible to predict with a high degree accuracy, which is precisely why I'm a passive investor. As such, I don't look a gift horse in the mouth. I'll be taking some profits soon to resist getting greedy by trying to outguess the market.

[HalvOnHorseracing]

I think we've got two more good years before the "correction."

[reckless]

From what I've read so far no one has offered a truly legitimate reason why the market will correct.

Rising stock prices do not stop rising simply because of ... rising stock prices ...

Markets don't correct solely because the markets have been going up ...

(Reversion to the mean is the silliest and most disproved 'truism' ever uttered in the discussion of the stock market.)

The major US companies that compose the Dow 30, S & P 500, etc., all received a 10-15 per cent boost in earnings per share simply by the passing of Trump's Tax Bill that lowered corporate tax rates from 35-40 per cent down to 21 per cent.

This bump in earnings is unencumbered and the financial different is all profit and lands straight on the bottom line. And this is before a single new and additional product and service is sold!

There are still dozens of well-known companies still available to buy at less than 10 times Free Cash Flow and a few dozen more selling at 15 times FCF and less.

Absolute steals and these companies all have 30-50 (and longer) year operating histories of success.

[AltonKelsey]

No question the tax break was Yuge.

And so much for the theory that folks were waiting to sell in the new tax year.

About 90% of the theories you see tossed around are wrong, proving that a coin flip would serve you better

[reckless]

No question the tax break was Yuge.

And so much for the theory that folks were waiting to sell in the new tax year.

About 90% of the theories you see tossed around are wrong, proving that a coin flip would serve you better

Yes I was the one that thought there would be some January selling and am very surprised the 2018 early rally has been this strong.

But it's still just two trading days into the New Year ... so there's time. If there is a sell-off or not in January or anytime, it won't matter for the market will have another great year, up another 20-30 per cent at least, as I see it.

Good luck.

[upthecreek]

https://www.cnbc.com/2018/01/04/ralph-acampora-i-am-so-bullish-i-have-to-sit-down-and-calm-down.html

[_______]

It’s hard to make an argument that the economy wasn’t already doing well or that corporate tax cuts are somehow going to be a short term negative.

Market’s are predictive mechanisms and I probably won’t see the next recession coming before the market does. The yield curve has flattened but hasn’t inverted and if the tax cuts unsupported by spending cuts doesn’t send the long end higher, nothing will.

Inversion is an incontrovertible signal of a recession that I don’t think you’ll see any sign of in 2018. The Fed is more likely to be playing catch up with this economy than inhibiting it in any fashion. Which means there should be clear sailing through at least the 1st half.

I will say that the higher this market goes without any significant correction, the harder the ultimate landing is going to be. But it’ll probably still punch me in the face before I know it’s there.

[lamboguy]

the market expands because someone or a group of someones thinks the underlying equities are worth more or will be worth more than the current price of the equity. the fed could raise rates to 100% and as long as a company can sell their goods and services for a bigger profit, it won't drag that equity down without the perception that the future will be bad.

the reason the markets have been on a tear is that there are other parts of the world that are consuming goods and services that they have never bought before, like Africa and Asia. once these area's become saturated, company's will have to find other area's to sell too. it could be the moon or some other planet!

since markets are correlated to the size of the population of the world and opening up their products to new parts we can understand what will bring the markets down. if there is going to be a bad war that wipes out tens of millions of people or a disease that takes people out we will see markets implode. everything else like changes in fed policies is nothing but hiccups to markets.

[JustRalph]

the market expands because someone or a group of someones thinks the underlying equities are worth more or will be worth more than the current price of the equity. the fed could raise rates to 100% and as long as a company can sell their goods and services for a bigger profit, it won't drag that equity down without the perception that the future will be bad.

the reason the markets have been on a tear is that there are other parts of the world that are consuming goods and services that they have never bought before, like Africa and Asia. once these area's become saturated, company's will have to find other area's to sell too. it could be the moon or some other planet!

since markets are correlated to the size of the population of the world and opening up their products to new parts we can understand what will bring the markets down. if there is going to be a bad war that wipes out tens of millions of people or a disease that takes people out we will see markets implode. everything else like changes in fed policies is nothing but hiccups to markets.

Who kidnapped Lambo and wrote this?

[Ocala Mike]

Or you could take the approach that the market has been correcting for the past 9 years. An external geopolitical event is what it will take to bring it down.

[lamboguy]

there has not been a significant correction in the last 9 years of going up. i have never liked the volume characteristics over those 9 big years. just last week we got a terrible jobs number and what do the markets do? why of course they go up to all-time highs and no sight of anything to stop it from going higher.

there are trillions of dollars offshore legally and illegally, ready to come back to the shores of this country that will boost the markets to even further heights. dow 30,000 for sure, maybe 40 or 40 thousand too. this could happen fast or it could take some time like 5 or 6 years, but its happening. even though there will come a day when these markets implode more than it went up the last 9 years, its not about to happen for at least 4 years imho and probably longer.

[mikesal57]

Or you could take the approach that the market has been correcting for the past 9 years. An external geopolitical event is what it will take to bring it down.

or a crazy North Korean......

[reckless]

or a crazy North Korean......

If the crazy North Korean hurls an A-bomb into Japan, yes the market will take a hit.

But if he hurls it into NYC then it won't really matter what the market does, now will it?

[mikesal57]

If the crazy North Korean hurls an A-bomb into Japan, yes the market will take a hit.

But if he hurls it into NYC then it won't really matter what the market does, now will it?

I really cant answer that cause I live in NYC :rip:

[reckless]

I really cant answer that cause I live in NYC :rip:

I'd love to offer you my place as a safe refuge, Mike, but I live less than 90 miles away! :)

You're still welcome, anytime.

[lamboguy]

the dow went up another 300 points and still looks mighty strong to me. this whole run from 14,000 has looked as legit as can be. below the 14,000 has some pretty shaky times, but to get there from here is next to impossible for the foreseeable future. i know nothing goes up all the time,and nothing goes down all the time either, but this thing is a locomotive that i would never want to step in front of. there must be plenty of shorts in this market on their way to getting cleaned out.

[Ocala Mike]

What lambo said - "Don't fight the tape"!

Of course, it's mostly a Dow and tech rally - my little stocks are hardly moving.

[reckless]

What lambo said - "Don't fight the tape"!

Of course, it's mostly a Dow and tech rally - my little stocks are hardly moving.

It's way, way more than just the 'tape', but I understand that sentiment too.

Your little stocks, OcalaMike ... are they real companies? If so, then just maybe you just have the wrong stocks.

here are a couple of small caps that still sell at a fraction of their intrinsic value, with great free cash flow, STRONG sales and earnings growth, and still priced cheaply, to boot. aND of most importance, basically still ignored by the market.

In no particular order:

Tegna (TGNA), $15.03 closed today, $3.3 billion mkt cap, 1.85% div. yield

Sinclair Broadcasting (SGBI), $39.15 closed today, $4.0 b mkt cap, 1.83% div. yield

USG Inc. (USG), $39.30 closed today, $5.47 b mkt cap, zero div.

Old Republic (ORI), $20.28 closed today, $5.3 b mkt cap, 3.76% div. yield

Discovery Communications (DISCA), $24.70, closed today, $9.3 b mkt cap, zero div.

Plus, there are companies still very much ridiculously inexpensive previously mentioned by me previously. They are:

Apple (APPL), Gilead Sciences (GILD), United Therapeutics (UTHR), First American Financial (FAF), Fidelity National (FNF), and Viacom (VIAB).

Good luck.

[lamboguy]

everyone always has their doubts about things. but what if all this is real, the job market improving for the past 8 years, the money being repatriated, the money that has been made in the markets the real estate values are all real?

this would first mean that the price of precious metals are correct today or maybe on the high side, a chunk could be paid down on the national debt. before he got elected Trump said he was going to do all these things. maybe he is capable of accomplishing what he said he would. this past few weeks there have been a few cracks like the employment numbers and rising rates.

[Ocala Mike]

I took profits in Novavax and Tandem recently after they surged on guidance and such.

I am long Twitter and an educational software company called Instructure.

[reckless]

Good luck Mike with your investments.

[Valuist]

No point in trying to be the hero and call the top. It does look very bubbly, but as long as the charts are strong, can't fade it.

[reckless]

No point in trying to be the hero and call the top. It does look very bubbly, but as long as the charts are strong, can't fade it.

I know of someone on here that believes the market is actually undervalued.

We're entering into a strong and accelerated growth stage with very large and important companies leading the way. It just so happens that for many of them their stock price vs. their intrinsic value is so totally out of sync. Their businesses is way ahead of their stock price, for sure.

Wall Street estimates for earnings, sales, cash flow, and dividends are simply too low at this time, leading to much higher share prices in the future, starting right now.

[Valuist]

I know of someone on here that believes the market is actually undervalued.

We're entering into a strong and accelerated growth stage with very large and important companies leading the way. It just so happens that for many of them their stock price vs. their intrinsic value is so totally out of sync. Their businesses is way ahead of their stock price, for sure.

Wall Street estimates for earnings, sales, cash flow, and dividends are simply too low at this time, leading to much higher share prices in the future, starting right now.

I will let the charts make the determination whether or not stocks are overpriced. As of this point, they aren't.

[lamboguy]

15 years ago 5% of the population of China was part of the middle class, today its 35%. the same type of changes is happening worldwide. throw in the fact that right now the world's population is growing by 20 million per quarter.

companies worldwide have been able to penetrate the population of the world with their goods and services in very efficient ways. the companies seem to be getting better at this as time goes by.


fundamentally and technically there is nothing to suggest that growth is near a top. so right now the only thing that will put an abrupt stop in this market are world disasters and wars.

[reckless]

I will let the charts make the determination whether or not stocks are overpriced. As of this point, they aren't.

I understand that we all use different ways to determine our investments. Same with handicapping the horses -- there is no single road to riches. I am not knocking the chartists at all and I wasn't knocking you, especially since you said stocks are not overpriced.

But my question is why would one put their very own money on the line based on other people's opinions and investments?

[Valuist]

I understand that we all use different ways to determine our investments. Same with handicapping the horses -- there is no single road to riches. I am not knocking the chartists at all and I wasn't knocking you, especially since you said stocks are not overpriced.

But my question is why would one put their very own money on the line based on other people's opinions and investments?

No offense taken.

Are you referring to analysts? I would agree; I never put any stock (pun intended) in their opinions. They are always late to the party. Or are you referring to the charts? In the LONG run, price will be determined by fundamentals, but the charts lead the fundamentals. By the time earnings are released, its old news. We often see stocks sell off after strong earnings, without any negative guidance. The postives are already factored into the price. Word gets out. Insiders exploit. They try to get cute by hiding it in the options markets but those moves are seen as well.

I wasn't a believer in technical analysis until I got buried in 2002. I missed a decent amount of wreckage in the previous 2 years, and thought I was being clever by getting back in. Wrong move. I was a good year too early. The market hadn't fully consolidated in 2002. But like most things in life, we learn from our past mistakes.

[AltonKelsey]

Sorry to say, while insiders can and do trade ahead, earnings OFTEN move the price in the direction of any surprise.

Too simplistic to say its all in the price. It isn't

[Valuist]

Sorry to say, while insiders can and do trade ahead, earnings OFTEN move the price in the direction of any surprise.

Too simplistic to say its all in the price. It isn't

I would say guidance is every bit as important, if not more, than earnings. We see countless companies exceed earnings, only to sell off as the post earnings call isn't 100% rosy.

[reckless]

I would say guidance is every bit as important, if not more, than earnings. We see countless companies exceed earnings, only to sell off as the post earnings call isn't 100% rosy.

The market does seem to react more so to guidance than to actual operating results at times.

And because the market movers are not really investors but speculators, their action (reaction) to guidance often creates great buying opportunities.

Today is a case in point with two companies taking huge hits to their stock price primarily based on guidance, while the underlying business is still intact and growing.

[Ocala Mike]

I am long Twitter and an educational software company called Instructure.

Sold my Twitter near its high last week - did ok. My INST got a big earnings beat pop today, so I'm happy.

I did rebuy some NVAX after taking profits on it - waiting for trial results soon.

[AltonKelsey]

Nice trade. I use twitter heavily, but have always despised the way management ran the co.

Goes to prove you can't f&&& up a good thing forever

[reckless]

On 7-17-17 I posted this in this Financial Markets room in a thread titled, Netflix:

In fiscal year ending 2016 Netflix earned $20 in free cash flow.

As a point of comparison Netflix earned $10 in 2012, $12 in 2013, $14 in 2014 and $14.50 in 2015. It's been a money machine from jump street, and continues more so today.

If you buy Netflix now at $160, you are paying 8 times free cash flow (FCF). A great bargain for a great growing company. It's been a long term hold of mine for many years.

I have as my own estimate Netflix generating $23 FCF in 2018, and $25 in 2019.


At 8 times FCF, Netflix is worth about $185 in '18, and $200 in 2019.

At 10 times FCF, we're looking at $230 and $250, respectively.

I am told 15 times FCF is considered a 'fair' valuation for a public company. I have never in my adult life paid 15 times or more FCF for a company, btw.

So, at 15 times FCF, the 'fair' intrinsic value of Netflix is $300 right now; $345 next year and $375 in 2019.

One of the great bargains in today's market.

In less than eight months -- eight months!! -- here's the most recent Netflix price:

Netflix (NFLX)
$315.92
14.87 (4.94%)
Netflix, Inc. | NASDAQ
3:08 PM 3/5/18Bats BZX Real-Time Price

I expect PA-Mike to slap me down a bit or two, but it is quite possible that I have made more money for PA posters with my financial and stock market talk than all the handicapping software and information out there in history.

[sammy the sage]

I'll say that you've JUST successfully CALLED the top for the market for awhile!:pound:....today 3/6/18...:puke:

Thinking the so called "Tariff" wars will put the brakes on for a bit...

Could be wrong...have been wrong before...will be wrong again...like ALL keyboard cowboys :coffee: :rant::lol: :popcorn:


On 7-17-17 I posted this in this Financial Markets room in a thread titled, Netflix:



In less than eight months -- eight months!! -- here's the most recent Netflix price:

Netflix (NFLX)
$315.92
14.87 (4.94%)
Netflix, Inc. | NASDAQ
3:08 PM 3/5/18Bats BZX Real-Time Price

I expect PA-Mike to slap me down a bit or two, but it is quite possible that I have made more money for PA posters with my financial and stock market talk than all the handicapping software and information out there in history.

[PaceAdvantage]

On 7-17-17 I posted this in this Financial Markets room in a thread titled, Netflix:



In less than eight months -- eight months!! -- here's the most recent Netflix price:

Netflix (NFLX)
$315.92
14.87 (4.94%)
Netflix, Inc. | NASDAQ
3:08 PM 3/5/18Bats BZX Real-Time Price

I expect PA-Mike to slap me down a bit or two, but it is quite possible that I have made more money for PA posters with my financial and stock market talk than all the handicapping software and information out there in history.AND you've been here since 2002! :ThmbUp:

Why would I slap you down? I like cocky....until something like what happened to me the last three days...happens...:pound:

[AltonKelsey]

Well, the result was declared official in Jan by me, so by inference a new race had begun.

Bulls took the lead, but folded like a cheap camera at the 3/8 pole.

Bears rejoiced.


PS The best stock in the world is threatening to lose that major support level of 1 cent again. So far the WSJ hasn't noticed.

[reckless]

Well, the result was declared official in Jan by me, so by inference a new race had begun.

Bulls took the lead, but folded like a cheap camera at the 3/8 pole.

Bears rejoiced.


PS The best stock in the world is threatening to lose that major support level of 1 cent again. So far the WSJ hasn't noticed.

What stock was that Alton?? I somehow forgot to ask when you made that post.

[AltonKelsey]

What stock was that Alton?? I somehow forgot to ask when you made that post.






How can you forget the best stock in the worlds symbol.


I only watch two stocks , the rest are just noise



IBM



and SFOR , aka "the best stock in the world"

[upthecreek]

https://www.usatoday.com/story/money/markets/2018/05/23/dow-50000-within-reach-investor-says/635354002/

[NorCalGreg]

I had to laugh at this:


https://s31.postimg.cc/mpr0hmvkb/12e1fdc8a44d9ade6d05e01474d2e164.jpg

[LemonSoupKid]

https://www.usatoday.com/story/money/markets/2018/05/23/dow-50000-within-reach-investor-says/635354002/

Martin Armstrong has said this for about 2 years now, and I became convinced of it in 2017 after seeing what still happens regarding most fiat based central governments, and their success with kicking the can down the road --- little to nothing, for now. They can do it for (and have) much longer than people realize, even though foundation is ripe for crumbling at any moment, and will continue to become a higher risk as debt creeps up.

Where are you going to put your money in the coming years, and where is the momentum? Equities are the place that provide some hedge on fiat, are known and "trusted" by new and old investors, as "price" will be price and obviously is dependent and scaled on how strong any given currency is. Crypto and other new avenues will also be additive in momentum, as he states. I personally see it rising to the middle of next decade, ~2025

Lemonides states:
The risk now is investors being out of the market. The risk later, he warns, will be investors piling in at the top in pursuit of gains they never saw coming.

He nails it right there. That's the classic progression historically, and everyone is aware of it.

In summary, I agree, but I don't think 50k, I think more along Armstrong's 40k. Certainly 30k into Trump's 2nd term.

[highnote]

I can’t imagine this market continuing like this.......

Trumps Tax cuts are going to help it........BUT

Eventually it has to fall back......predictions?

I say within 12-24 months.......October 2019 or shortly thereafter

I know almost nothing about the stock market, but this cannot go on forever........

Your call on the timing might be right!

[Segwin]

Looking at the Dow monthly shows that there have been three attempts to push higher met with resistance (not a good sign in and of itself). The most troubling indicator is the shooting star as shown in the pic. Shooting stars often are signs of a reversal that is coming soon. I would think that's why there has been a buzz about the economy.

[PaceAdvantage]

On the contrary, that chart could also indicate a long consolidation after the huge run-up from Jan 2016 to Jan 2018...hardly the sign of impending doom. In fact, it could just as easily be the calm before the next leg up.

That shooting star is in a weird spot for it to be a sign that an extended downturn is on the horizon.

[FakeNameChanged]

Looking at the Dow monthly shows that there have been three attempts to push higher met with resistance (not a good sign in and of itself). The most troubling indicator is the shooting star as shown in the pic. Shooting stars often are signs of a reversal that is coming soon. I would think that's why there has been a buzz about the economy.
Looking at your monthly chart, there must be what, 4-5 other shooting stars, and no comment about what happened after them? And immediately to left of the star is a bullish tweezer pattern, so why wasn't a buzz about that? Maybe it didn't fit the media's planned narrative.

On weekly charts it has closed over 27,000 on three different times. There's no magic to testing a resistance line three times, just a good average or rule of thumb. Last week it was the bond yields causing the buzz, and before and after that the trade war, now it's July's monthly candlestick shooting star? Nothing goes up in a straight line, but who knows long it will stick below that line. It does give old Joe Kernen on MSNBC something to cover.

[Ocala Mike]

Joe Kernen is on CNBC (host of Squawk Box), not MSNBC. I'm not a fan, to use today's jargon - I hurl a lot of STFU's on him while he's on.

[lamboguy]

unscientific, but i use the handle of the Kentucky Derby to target Dow moves. right now i have the Dow going to $47,0000. when its going there i can't tell you.

for gold, i have that going to $1585 the ounce on its way to $2700.

[FakeNameChanged]

Joe Kernen is on CNBC (host of Squawk Box), not MSNBC. I'm not a fan, to use today's jargon - I hurl a lot of STFU's on him while he's on.
YOU SIR, are Correct!. I obviously don't know my NBC's. It must drive old Joe nuts when the kid next to him writes best sellers and top rated shows on Showtime. He takes shots at him at every opp.

[FakeNameChanged]

unscientific, but i use the handle of the Kentucky Derby to target Dow moves. right now i have the Dow going to $47,0000. when its going there i can't tell you.

for gold, i have that going to $1585 the ounce on its way to $2700.
Funny, there was a beautiful shooting star candlestick (see prev.#51) back for the week of April 8th, and six weeks later, it took off like a rocket. Where was the media buzz about that? You may well be right.