Monday 3-9-2020 will be interesting...

[ESRwannabe]

In case you missed it Saudi Arabia and Russia couldn't reach an agreement last Friday. So, Saturday Saudi Arabia went berserk on the oil market. They tried to put US shale oil out of business a few years ago (and failed), and now it is time for round two.

If we have a lot of shale companies go out of business I think it could have a large impact on the junk bond market and those layoffs will be very painful for the economy as a whole. The oil sector pays very well. So every job loss will have a large trickle down impact.

I think Monday will be relatively "exciting".

P.S. My taxable FIRE money is invested 50/50 into Vanguard's High Div Yield Index US and Ex-US. Dividends for Q1 2020 will be paid at the end of March, not long from now. It will be interesting to see if there were any dividend cuts.

P.P.S. I am tempted to start throwing some money into the oil sector. Considering etfs VDE, MLPX, MLPA. Also considering just buying stocks like XOM and KMI. Anybody else want to help me catch some falling knives?

 

[Aus_E_Expat]

Australian market fell 7.33% today, its second biggest fall ever!!

Cheap oil prices should be good for Australian economy - but everyone is acting irrationally.

 

[Aus_E_Expat]

London FTSE down 8.5% on opening today!!!

 

[ripper1]

Yep, dow futures down 1300

 

[Lakewood90712]

I guess the Bitcoin fans are having a rough time too. Would not touch crypto at any price.

Keeping seed money on the shelf for now, waiting for capulation , long way down to go still.

 

[finster869]

March 9, 2009 (11 years ago to the day) was the stock market bottom from the 2007 crisis. Fast forward 11 years and March 9, 2020 is Black Monday with oil dropping 30% and stock markets across the world crashing. There is fear in the streets......feels like another bottom. Who has the guts to catch the falling knife?

 

[MrLoco]

Perhaps time to buy equities.

Even if you are catching a "falling knife," in five years stock prices today could look like a bargain.

I remember an interview by CNBC with Warren Buffet during the financial crisis at the end of 2008. HE was asked what he thought about the DOW at below 7000 at the time. His response? " THis is a great buying opportunity!" Man was right.

A lot of us were waiting for the opportunity to buy equities on a pullback.
Here it is boys and girls.

 

[frank]

the dow actually got down to 7000 in 2008?

 

[GenXguy]

the dow actually got down to 7000 in 2008?

The Dow dropped to 6,469.95, but that was in March 2009, not 2008.

 

[Dtail]

Yep, dow futures down 1300

Would probably be more, but limited to 5% down.
I have said it before that the market needs to turn into a bear market (short term hopefully) and we can officially state the end of the bull market, which would allow psychologically the future market gains to start fresh.

 

[Montecfo]

In case you missed it Saudi Arabia and Russia couldn't reach an agreement last Friday. So, Saturday Saudi Arabia went berserk on the oil market. They tried to put US shale oil out of business a few years ago (and failed), and now it is time for round two.

If we have a lot of shale companies go out of business I think it could have a large impact on the junk bond market and those layoffs will be very painful for the economy as a whole. The oil sector pays very well. So every job loss will have a large trickle down impact.

I think Monday will be relatively "exciting".

P.S. My taxable FIRE money is invested 50/50 into Vanguard's High Div Yield Index US and Ex-US. Dividends for Q1 2020 will be paid at the end of March, not long from now. It will be interesting to see if there were any dividend cuts.

P.P.S. I am tempted to start throwing some money into the oil sector. Considering etfs VDE, MLPX, MLPA. Also considering just buying stocks like XOM and KMI. Anybody else want to help me catch some falling knives?

It's a bit early on the oils I think but if you like those look at closed-end fund PEO. Get them at a discount.

 

[BeachOrCity]

Who has the guts to catch the falling knife?

I have the guts, but will wait for the knife to hit the table, roll around a bit and then fall to the real floor. Perhaps by mid April depending on how things go?

 

[FIREd]

March 9, 2009 (11 years ago to the day) was the stock market bottom from the 2007 crisis. Fast forward 11 years and March 9, 2020 is Black Monday with oil dropping 30% and stock markets across the world crashing. There is fear in the streets......feels like another bottom. Who has the guts to catch the falling knife?

You go first.

In 2009, the market had been on a downtrend for nearly 18 months, not 18 days.

When I see the drastic actions taken in Italy in response to this virus (bringing the economic engine of the country to a crawl for an entire month at least), I think that it is too early to try and figure out the damage being done to the world economy. We are starting to see some wrecks in Europe, as the virus threat is hastening the demise of companies with weak balance sheets. How long before we start going up the ladder?

 

[copyright1997reloaded]

I have the guts, but will wait for the knife to hit the table, roll around a bit and then fall to the real floor. Perhaps by mid April depending on how things go?

I'm already missing a couple fingers.

 

[teejayevans]

The problem is they are interfering with normal market fluctuations, by halting trading when we reach certain levels, I think it makes it worst. More time for the teapot to boil and build up pressure.

P.S. Fed drop of rates is having no impact, I think they lost their mojo.

 

[teejayevans]

Yep, dow futures down 1300

But they halted trading...without that, how far would it have dropped...10%?

 

[copyright1997reloaded]

The problem is they are interfering with normal market fluctuations, by halting trading when we reach certain levels, I think it makes it worst. More time for the teapot to boil and build up pressure.

P.S. Fed drop of rates is having no impact, I think they lost their mojo.

There is some truth in this. Last night I was watching futures trade (on ThinkorSwim). When the went limit down, I no longer had any information (other than watching the sell @ the limit down market go up and up).

From a psychological perspective I feel better saying "The market is trading down 7%" than "futures are down limit 5%". At least now we are seeing premarket trading in some ETF's, eg. SPY crossing at 278.2 (closed Friday at 297.46, so down 6.5%).

 

[11522914]

But they halted trading...without that, how far would it have dropped...10%?

Right now the spy is trading at 278.28 indicating a drop of 6.4%

 

[copyright1997reloaded]

But they halted trading...without that, how far would it have dropped...10%?

Right now about 6.5% (looking at SPY pre-market trading - which is open and isn't limit down.)

Here's today's circuit breaker rules:

The rules, which apply to regular trading hours only, are as follows:

Level 1: If the S&P 500 drops 7%, trading will pause for 15 minutes. (This would occur today if the S&P falls 208 points).
Level 2: If the S&P 500 declines 13%, trading will again pause for 15 minutes if the drop occurs on or before 3:25 p.m. ET. There will be no halt if the drop happens after that. (This would occur today if the S&P falls 386 points).
Level 3: If the S&P 500 falls 20%, trading would halt for the remainder of the day. (This would occur if the S&P falls 594 points).

source: https://www.cnbc.com/2020/03/09/sp-500-futures-are-frozen-after-tanking-5percent-heres-what-happens-when-circuit-breakers-kick-in.html

 

[11522914]

Oil stocks down huge. Wow. I sold my OXY position on 2/10/20 for 40.69. Lost approximately $15 per share. Today, one month later, it's trading right now at $17.56, 56.8% drop from when I sold it. It would have a dividend yield of 17.9%.

Copy - do you think OXY is going to make it through this crisis? A dividend cut for sure?

 

[Dogpeace]

I would sit on the sidelines for a while. There will be plenty of time to buy good deals once the dust settles.

There's just too much risk of further declines to justify trying to time the bottom, and I expect we will be at the bottom for some time to come... no big V recovery like in 2018.

 

[11522914]

Right now spy trading at $276.35, down over 7%. Does that mean the 1st trigger goes off right at open and the market doesn't open until 9:45? Trying to understand how this works.

 

[audreyh1]

March 9, 2009 (11 years ago to the day) was the stock market bottom from the 2007 crisis. Fast forward 11 years and March 9, 2020 is Black Monday with oil dropping 30% and stock markets across the world crashing. There is fear in the streets......feels like another bottom. Who has the guts to catch the falling knife?

This is still too soon. It’s just started. Big events like this oil price war take time to play out. I do think we’ve been through this before recently.

 

[MichaelB]

This is still too soon. It’s just started. Big events like this oil price war take time to play out. I do think we’ve been through this before recently.

There was a Saudi led price war 2014-2016. This looks like that.

 

[REWahoo]

There was a Saudi led price war 2014-2016. This looks like that.

+1

With an added dose of Covid-19 to give it some spice.