Anyone Buying Into Today's Dip?

As mentioned earlier, Santa may give us all a lump of coal in our stocking, same as he did in 2018.

Anyway, I just counted the puts that were open. I have to buy $47.6k worth of stock due to option assignment. That's not too bad, but I am going to be extra careful when selling put options now. It's still early in the hunt, and there's no need to waste all your shots this early. Heh heh heh...
 
Last edited:
NW-Bound said:
Anybody here still feels like buying? There's still 1 hour left. Buy, buy, buy?
Click to expand...

Various people pointed out how I was saying that I was planning to layer more into equities if there was a dip but historically did not do that.

Well the technology companies are taking quite a hit, but not enough to meet my criteria for being a huge dip. However, I did buy quite a bit of SQ and bought back the TSLA I had sold at $997. Plus 1 share of NVDA, which I think is still too high, but I am slowly DCA'ing into. And also a little bit of ARKK and ARKG.

So I guess I am doing what I said I would do, at least a little bit.

I have avoided doing any option trades until I learn more. I did buy and read that options for beginners book that was recommended in my other thread. The person that recommended it was right that I did not understand how option pricing differed from normal equity trading. It was very interesting reading about delta, gamma etc. I had been puzzled why the option prices did not just track one for one as the dollar price of the underlying stock changed.
 
NW-Bound said:
Anybody here still feels like buying? There's still 1 hour left. Buy, buy, buy?
Click to expand...

I did do another 1/3 of my target Roth conversion for the year, so I'm 5/6 of the way. The tentative plan is to wait until I have more clarity on my December income and to also make sure I'm targeting the correct AGI, then I'll do another conversion or two to get close to, but not over, that AGI.

I did consider selling some bonds to buy some stocks, but I'm actually within my rebalance bands and fairly close to target, so I sorta said meh on that.

Neither of the above make any real difference. It does keep me out of the bars at night.
 
I have a buy in mind for whenever I think the fog is starting to clear; a quality growth name.
 
On 9/20/2018, the S&P was 2931, then all-time high.

On 12/24/2018, the S&P was 2351, a loss of 20%.

On 4/30/2018, the S&P recovered and set a new high at 2946, before slipping back.

I tried to recall what led to that large decline. It was the import tariff war, the Fed raising rate, and US companies issuing downward revisions to earnings projections.

The market somehow shook off those worries right after ingesting the 2018 Christmas dinner.

This time, we have: new Covid variant, Fed raising rates, global energy shortage, supply chain clog up, tension from China and Russia belligerence. What else do I miss?
 
NW-Bound said:
On 9/20/2018, the S&P was 2931, then all-time high.

On 12/24/2018, the S&P was 2351, a loss of 20%.

On 4/30/2018, the S&P recovered and set a new high at 2946, before slipping back.

I tried to recall what led to that large decline. It was the import tariff war, the Fed raising rate, and US companies issuing downward revisions to earnings projections.

The market somehow shook off those worries right after ingesting the 2018 Christmas dinner.

This time, we have: new Covid variant, Fed raising rates, global energy shortage, supply chain clog up, tension from China and Russia belligerence. What else do I miss?
Click to expand...

In a nutshell, "Fed raising rates" is the answer to your question.
 
COcheesehead said:
Remember December 2018? The low, a drop of 19%, happened on Christmas Eve.
Click to expand...

I remembered 2018. I am retired but my young wife is still working. She contributes $6,000 into her Roth every year in December so she will be buying regardless of the market. Looks like she lucked out.

My wife is 20 years younger than me which explains why I am now a house husband while she needs to work to earn a decent retirement for herself. I am teaching her how to invest and we picked December to pump up her Roth because traditionally….markets tend to decline in the 4th quarter (October has always been a spocky time for the stock market).
 
Last edited:
GravitySucks said:
Maybe the good boys and girls were selling puts and shorting the market.
Click to expand...

Low volume, half day market didn’t help. I remember buying some index ETFs as I left the office that day. When you are scared to hit the buy button, you know it’s the right time to purchase.
 
37andhappy said:
In a nutshell, "Fed raising rates" is the answer to your question.
Click to expand...

That was on my list.

freedom2022 said:
debt ceiling?
Click to expand...

Congress passed another stopgap measure. I forgot the details, about when it runs out.

COcheesehead said:
Low volume, half day market didn’t help. I remember buying some index ETFs as I left the office that day. When you are scared to hit the buy button, you know it’s the right time to purchase.
Click to expand...

I am not scared yet. That's why I am holding back on my purchases.
 
NW-Bound said:
This time, we have: new Covid variant, Fed raising rates, global energy shortage, supply chain clog up, tension from China and Russia belligerence. What else do I miss?
Click to expand...


The first thing that comes to mind for me is "inflation". Actually, I can hardly get if off my mind. lol
 
SecondAttempt said:
You missed the employment situation.
Click to expand...


This is a puzzle. From what I read, the unemployment rate is low, but that's because fewer people want to work, and job offers go begging.

This is not good because we don't want everybody to take ER. :) Some people have to work, in order to produce goods and services. If there's not enough "stuff" produced, and too many people sitting at home buying "stuff", prices will go up and we have inflation.

And that brings us to the following post.

GenXguy said:
The first thing that comes to mind for me is "inflation". Actually, I can hardly get if off my mind. lol
Click to expand...

Yes, and inflation is what makes the Fed raise rates, so the two are related.
 
NW-Bound said:
Yes, and inflation is what makes the Fed raise rates, so the two are related.
Click to expand...


Related, but too much inflation, even without raising interest rates, has a negative effect on the economy and stocks. There have been quite a few news articles about this lately. I wouldn't leave it off any list, even if there might be some related and partial overlap items.
 
We had a "re-rating" of risk this past.week. Not sure if that will continue.

The largest factor I think was the taper talk. Market was digesting the taper well until talk of accelerating it.
 
Last edited:
GenXguy said:
Related, but too much inflation, even without raising interest rates, has a negative effect on the economy and stocks. There have been quite a few news articles about this lately. I wouldn't leave it off any list, even if there might be some related and partial overlap items.
Click to expand...



Yes. Inflation is the cause or the disease, and high interest rate is supposedly the effect, or more the intended cure.

Here's a chart I found that shows both together. I found it interesting that in the period of 1968-1978, the interest rate led the inflation. It looks like the Fed acted preemptively.

After the skyhigh inflation and interest rate of 1980, inflation got tamed quickly, but the fed lowered the rate slowly. I guess it's like taking antibiotics long after an infection has subsided, in order to be sure the bacteria gets completely killed.

Chart-2-Gold-Inflation-Fed-Funds-Rate.jpg
 
Last edited:
I'm going to start swing trading when the market starts trending up.
 
Archman said:
I'm going to start swing trading when the market starts trending up.
Click to expand...

Swing trading is somewhat what I have been doing with my option trading. Stocks go up, I write OTM calls. Stocks go down, I write OTM puts. And if I get assigned, I try to get back to my desired stock AA by setting the strike prices higher or lower to increase the chance to get assigned.

Because I am no longer as bullish on the market and want to lower my stock AA a bit, I am trying to refrain from selling puts, lest I get assigned and have to buy more stocks. I will keep on selling OTM calls on up days, and if I get assigned that will bring about the lower stock AA I want.

It looks like the market will go up tomorrow, judging from the stock futures. Every morning, looking for some stocks I hold to sell options on is fun.
 
NW-Bound said:
It looks like the market will go up tomorrow, judging from the stock futures. Every morning, looking for some stocks I hold to sell options on is fun.
Click to expand...
Still true 30 min before the market open, although it's about half of Friday's drop.
 
Nasdaq is down pre market. Rotation out of tech due to anticipated higher rates.
 
You must log in or register to reply here.

Similar threads

T
Retired 10 years today!
Replies
20
Views
2K
walkinwood
walkinwood
D
Retired in 2017@42
Replies
10
Views
1K
Koolau
Koolau
Carpediem
Anyone done a 1031 exchange?
Replies
17
Views
857
Scrapr
Scrapr
M
Real Estate in 2024?
Replies
9
Views
807
DrRoy
DrRoy
R
Pre-FIRE Prep / Check-In
Replies
13
Views
3K
refi
R

Latest posts

Back
Top Bottom