Can Anything Prevent a U.S. Stock Market Crash in 2016?

Discussion in 'General Discussion' started by Centaura, Apr 18, 2016.

  1. Centaura

    Centaura Guest

    Well i am i die-hard investor in stock market and want to invest in stock-market thoroughly and continuously but according to the latest census and latest happenings across the globe i am not in state to invest in stock market. I don't know the reason behind this but according to the latest article regarding the stock market crash that i had encountered recently has left me in a haze and probably that's the reason why these is happening, and looking at the roller coaster ride of Oil, gold and commodities i am in a bit of dilemma whether there is goona a stock market crash for 2016.

    Help me out guys!!!

    Is these really goona happen or i am torturing myself????
    Last edited by a moderator: Jun 29, 2016
  2. tom

    tom Administrator Staff Member

    My opinion is that we are in a bull market. I don't see a crash happening any time soon.
    Ryan Simmen likes this.
  3. Jonathan

    Jonathan Active Member

    While i'm bearish based on what i think "should" happen, I have to be bullish based upon what IS happening.
  4. Gabor Maly

    Gabor Maly Well-Known Member

    For every doomsday article there are 5 others predicting the opposite. Don't read this stuff. For sure there will be a crash, noone knows when.
  5. Kevin Lee

    Kevin Lee Well-Known Member

    No one can predict market movements consistently. Focusing on that brings unnecessary stress.

    My view of investing is focus on the quality of the business and buy when price is significantly lower than intrinsic value. Ride with the rising earnings of the business. With large margins of safety, there is nothing to fear when stock crashes.

    In the long run, price always catches up with intrinsic value. So ignore near term mkt gyrations.
  6. Centaura

    Centaura Guest

    In my opinion, as the things are changing in US Economy, few things indicating stock market crash in 2016. US elections are there in 2016 and U.S. companies are relying more and more on foreign countries for growth. As the global economy is doing so poorly. The International Monetary Fund has sounded the alarm, warning of a possible new financial crisis. Since March 2009, the NASDAQ has soared more than 250% and the NYSE is up 130%, while the S&P 500 has gained 182% and the 30-company-strong Dow Jones Industrial Average is up more than 145% (and I think this is the bubble which is being created by the big players). On the other hand real unemployment rate is also increasing month over month. All these could lead to a stock market collapse.
  7. Andrei

    Andrei Well-Known Member

    I am bearish, I know that at some point I will be proven right. On the other hand I have missed some huge opportunities by overthinking and being a bear way too early. So this is why I am mostly trading Theta strategies. I have also set up several Ron's STT for protection (thank you Ron for the doing the work). I know the bubble will burst some day and I will be happy to trade it (and the subsequent rebound), but for now I am sticking with JL's M3/BB as well as the RTT. As an added bonus if you trade index options, you will get a much more favorable tax treatment.

    But for now all I am hoping for is pop in Vol :)
    Last edited: Apr 19, 2016
    Chuck likes this.
  8. Vijay

    Vijay Member

    “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” – Peter Lynch
    Andrei and Kevin Lee like this.
  9. Gabor Maly

    Gabor Maly Well-Known Member

    If you watch the movie Big short (true events) it is mind blowing how much money the hedge fund manager Michael Burry was down on his short before the subprime crisis eventually materialized. He was wrong by almost a year. Everything lined up for a crash...still it just did not come.
  10. Kevin Lee

    Kevin Lee Well-Known Member

    "Markets can remain irrational longer than you can remain solvent"
    Michael Burry almost got killed by margin calls. He was lucky but Long Term Capital wasn't. They were killed by over leverage. Trading strategies that rely on timing markets are inherently dangerous, especially those with leverage.
  11. MikeS

    MikeS New Member

    I agree with everything written - and the only thing I'll add is if you can keep track or a few simple technicals they will give you comfort because you can adopt a market posture that is consistent with what's happening. Markets usually don't correct out of the blue and there are clear warning signs that occur if you are watching for them. I track 14 different things that you can track for free - but if I had to choose 5 of them to keep it simple I would choose:

    1) Is the 5 Day EMA above the 20 Day EMA?
    2) Is price above or below the 200 Day EMA?
    3) Is the 50 Day EMA above the 200 Day EMA?
    4) What does IBD say about the market? (Investors Business Daily)
    5) What is the GMI? (Wishing Wealth Blog)

    Believe it or not all of these are 100% bullish right now so from my point of view it's all pointing up - even though I am horribly bearish and carry overall negative deltas. If left to my own opinion and imagination I would have been crushed since mid-Feb.

    To underscore one of the above posters - one of my favorite books is "When Genius Failed" - the story of Long Term Capital Management. If you haven't read it - you should because you just can't make that kind of stuff up.
    Timo, tom and Gabor Maly like this.
  12. Don S

    Don S Member

  13. Edward

    Edward Well-Known Member

    I have read that the market goes in cycles normally in 5 year cycle. Currently we are in a 7 year up cycle since the Great Recession. The long recovery might explain the current long up cycle. However since August 2015 the market has been extremely volatile. The beginning of 2016 has been more so.
    The market environment definitely has changed and we should be cautious of a bear market.

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