Anyone Buying Into Today's Dip?

[NW-Bound]

Ugh...

I just counted the put options that are still open, and if they all get assigned will cause my cash stash to decrease by $108k. I think that's enough for now. I don't think I will buy more shares, or sell more puts.

Things may get interesting, not just because of the omicron variant but also the market has been overextended. Gotta preserve my cash until the high-P/E and non-E stocks come crashing down. If that happens, the effect will spread to other "innocent" stocks, which I already hold.

Dang, I think I might have put some cash back into the market a bit too early with the puts.

And if the market miraculously goes up, that's fine with me too. My stock AA is still at more than 60% currently, and it's not like I will be missing out.

 

[W2R]

Not me.

Yeah I would call this a"blip" not a dip. It could turn in to a dip but we''ll find out soon enough.

Either way, blip or dip, this fish isn't taking the bait.

 

[OverThinkMuch]

I think the dip was from omicron (Covid-19 variant, not a transformer). This dip happened with 1 case in Belgium, and nowhere else in Europe, the Americas, or Asia. What are the odds of zero new omicron variant cases being found?

My guess we'll see another drop or two next week, and see the market drop further. There hasn't been enough time for vaccine and antibody makers to do research and come up with good news. So "omicron" has a monopoly on bad news, which I don't expect to end after one dip.

 

[marko]

No. That would be market timing.

My question is what was this cash doing before today?

As noted in my OP, my "cash" was in a fund I had been unhappy with. Hopefully Monday will bring things down again a bit for another incremental buy.

I have a pretty stable core and tend to just "nibble around the edges", more or less fine tuning and taking advantage of "sales". As noted, I made a nice 65% gain on $100k on one fund that I bought in April '20.

 

[VanWinkle]

This may allow me to move more of VTSAX from my IRA to my Roth IRA in the next week or two......More shares move when the market is down.

 

[2177V]

Buying now is too risky IMO. What happens to the buyers if the market continues to fall? Their purchases today will then fall in value tomorrow or later this week until the market stabilizes. Rewards awaits the investors who wait until the market decline 5% or more instead of an insignificant 2-1/2%.

If this is a market correction which is defined as 10% or more, then I most certainty become a buyer to make 10% while buying now will only make 2-1/2%.

They have been talking about a market correction for a long time now. If this is happening, then this is good for the market in the long term. It is also good for me since I will make 10% rather than 2-1/2%.

 

[Chuckanut]

I think the dip was from omicron (Covid-19 variant, not a transformer). This dip happened with 1 case in Belgium, and nowhere else in Europe, the Americas, or Asia. What are the odds of zero new omicron variant cases being found?

One commentator mentioned that the [-]dip[/-] blip was caused mostly by computerized trading. Most of the 'expert' human beings were taking the day off.

I have no idea if this is correct.

 

[freedom2022]

Zoom Video and Peloton each added more than 5%.
Pharma stocks were certainly up as well.
Investors just moved their money around, not getting out of the stock markets.
Until Pfizer and Modena report the effectiveness of their vaccine against new variant omicron, the market will be turbulent.

 

[NW-Bound]

While the market drop was certainly triggered by the Omicron scare, what else do we know if we look beyond that?

A lot more will be known about this virus variant in the days ahead. Overall, the situation should be nowhere as scary as it was in early 2020. We have vaccines now, and new ones will be cranked out in a few months. And there are better treatments and drugs now. The death rate is a lot lower than it used to be.

On the other hand, the market is a lot higher than it was even pre-Covid. I looked at some stocks, and was perplexed to see that their price is higher than their value pre-Covid, yet their sale and earning numbers were still low. Conclusion: with so much money sloshing around, people got into "buy, buy, buy" mode without caring about stock fundamentals.

This trend cannot continue forever. Inflation is high, and the Shiller P/E is 39, vs. the all-time high of 44 at the peak of the dot-com mania. It does not look good.

 

[freedom2022]

After the dot-com burst, Alan Greenspan kept the interest rate low for a while but still above 0%.
With quantitative easing since 2008, there are plenty liquidity to push P/E even higher.
Any wild guest how high will it be? 65?

 

[Chuckanut]

Moderna predicts an updated vaccine in 'early' 2022, if they find the present one is not good enough. They say they will know how well the present vaccine works in about two weeks.

https://www.cnbc.com/2021/11/28/mod...ant-vaccine-could-be-ready-in-early-2022.html

• Moderna’s Chief Medical Officer Paul Burton said Sunday the vaccine maker could roll out a reformulated vaccine against the omicron coronavirus variant early next year.
• It’s not clear whether new formulations will be needed, or if current Covid vaccinations will provide protection against the new variant that has begun to pop up around the globe

 

[Safire]

As noted in my OP, my "cash" was in a fund I had been unhappy with. Hopefully Monday will bring things down again a bit for another incremental buy.

I have a pretty stable core and tend to just "nibble around the edges", more or less fine tuning and taking advantage of "sales". As noted, I made a nice 65% gain on $100k on one fund that I bought in April '20.

Which fund have you been eyeing, marko?

 

[aja8888]

Dow futures are up about 200 points at this time. Maybe a bounce tomorrow?

Or is it....BUY THE DIP!

 

[TNBigfoot]

I had recent HSA and Roth contributions in FIDO cash accounts waiting on the next “dip”. Whether this was a true “dip” or just pushing off the top of the ski jump remains to be seen.

Reading over the weekend, seems many investors are sweating still over Omni….

 

[NW-Bound]

Dow futures are up about 200 points at this time. Maybe a bounce tomorrow?

Or is it....BUY THE DIP!

I will maintain a defensive stance. If the market goes up, I will write OTM covered calls. If it goes down, I will try to sit on my hands instead of writing OTM puts.

I want to get my stock AA down further, to below 60%.

 

[aja8888]

I will maintain a defensive stance. If the market goes up, I will write OTM covered calls. If it goes down, I will try to sit on my hands instead of writing OTM puts.

I want to get my stock AA down further, to below 60%.

All my (few) calls expired last Friday. With the volatility in the market, I may hold off a while before making any new bets!

 

[OverThinkMuch]

I think the dip was from omicron (Covid-19 variant, not a transformer). This dip happened with 1 case in Belgium, and nowhere else in Europe, the Americas, or Asia. What are the odds of zero new omicron variant cases being found?

My guess we'll see another drop or two next week, and see the market drop further. There hasn't been enough time for vaccine and antibody makers to do research and come up with good news. So "omicron" has a monopoly on bad news, which I don't expect to end after one dip.

It's Monday, but I'm not waiting for the rest of the week - my prediction was wrong. In 3 stocks, Peloton and Carnival Cruises (CCL) are opposites - one benefits from lockdowns, the other is hurt. Peloton dropped and CCL went up, suggesting reduced lockdown fears.

And then there's Moderna, who reassured people they will have a decision in 2 weeks, and if needed, a new vaccine in early 2022. I think that plus their +10% stock jump today shows where the market is focused.

 

[2177V]

While the market drop was certainly triggered by the Omicron scare, what else do we know if we look beyond that?

A lot more will be known about this virus variant in the days ahead. Overall, the situation should be nowhere as scary as it was in early 2020. We have vaccines now, and new ones will be cranked out in a few months. And there are better treatments and drugs now. The death rate is a lot lower than it used to be.

On the other hand, the market is a lot higher than it was even pre-Covid. I looked at some stocks, and was perplexed to see that their price is higher than their value pre-Covid, yet their sale and earning numbers were still low. Conclusion: with so much money sloshing around, people got into "buy, buy, buy" mode without caring about stock fundamentals.

This trend cannot continue forever. Inflation is high, and the Shiller P/E is 39, vs. the all-time high of 44 at the peak of the dot-com mania. It does not look good.

I agree with this opinion. First of all, the news media tend to sensationalize the virus to get your attention in order to make money. However, the latest news that it is not known whether it is more or less fatal or whether the existing vaccine is effective or not.

I believe in old school fundamentals. P/E ratios means a lot to me as well as inflation. What we are seeing is simple volatility based on fear of the unknown. Once the unknown became known, then the market stabilizes. However, if P/E ratio gets out of hand or inflation get out of control, then you may see a correction which is defined as a 10% decline or even a bear market which is defined as a 20% decline. The recent 2-1/2% decline is hardly anything.

I am waiting for the next 10% correction before I pounce. This may happen if the November inflation number is more than the October inflation number of 6.2%.

I cut and pasted the historical market corrections below....from investopedia's definition of a correction:

+++++++++++++++++++++++++++++++++++++

Real-World Examples of a Correction

Market corrections occur relatively often. Between 1980 and 2018, the U.S. markets experienced 37 corrections. During this time, the S&P 500 fell an average of 15.6%. Ten of these corrections resulted in bear markets, which are generally indicators of economic downturns. The others remained or transitioned back into bull markets, which are usually indicators of economic growth and stability.
Take 2018, for example. In February 2018, two major indexes, the Dow Jones Industrial Average (DJIA) and the Standard & Poor's 500 (S&P 500) index, both experienced corrections, dropping by more than 10%. Both the Nasdaq and the S&P 500 also experienced corrections in late October 2018.
Each time, the markets rebounded. Then another correction occurred Dec. 17, 2018, and both the DJIA and the S&P 500 dropped over 10%—the S&P 500 fell 15% from its all-time high. Declines continued into early January with predictions that the U.S. had finally ended a bear market abounding.
The markets began to rally, erasing all the year's losses by the end of January. As of mid-April 2019, the S&P 500 was up about 20% since the dark days of December.

 

[Qs Laptop]

Buying now is too risky IMO. What happens to the buyers if the market continues to fall? Their purchases today will then fall in value tomorrow or later this week until the market stabilizes. Rewards awaits the investors who wait until the market decline 5% or more instead of an insignificant 2-1/2%.

If this is a market correction which is defined as 10% or more, then I most certainty become a buyer to make 10% while buying now will only make 2-1/2%.

They have been talking about a market correction for a long time now. If this is happening, then this is good for the market in the long term. It is also good for me since I will make 10% rather than 2-1/2%.

Yes, wait if you are buying an index fund; if you are buying an individual stock and you have researched it, it might make sense to have bought last Friday.

I've taken a couple rides on DQ, a Chinese supplier of silicon wafers that are used to make solar cells. I've been watching it gradually go down in price waiting for it to reach my strike price of less than $60. The dip on Friday got me there. I put in an order at $56.75 and got it. The stock bottomed out on Friday at $56.54 and closed at $58.52. I'm glad I didn't wait.

 

[NW-Bound]

Most of the stocks that I had to buy due to put option assignment have made me money. How lucky is that?

I am back to selling OTM covered calls. Still looking to reduce stock AA. I am not counting on the bean stalk growing to the sky.

 

[chassis]

Yes, today i bought shares of a growth company at a 2% discount from ATH.

 

[Car-Guy]

Looks like today may be another buying opportunity...

 

[NW-Bound]

Looks like today may be another buying opportunity...

No, I am not buying, and not even selling OTM puts like I normally did on a market down day.

Instead, I managed to sell 5 OTM call contracts on some ETFs that managed to be up early in the day, before they suddenly turned tail and followed the rest of the market heading south. The contracts expire next Friday. Made a measly $690, but that's $690 in cash I would not have otherwise. Every bit helps.

I agree with this opinion...

I believe in old school fundamentals. P/E ratios means a lot to me as well as inflation. What we are seeing is simple volatility based on fear of the unknown. Once the unknown became known, then the market stabilizes. However, if P/E ratio gets out of hand or inflation get out of control, then you may see a correction which is defined as a 10% decline or even a bear market which is defined as a 20% decline. The recent 2-1/2% decline is hardly anything.

I am waiting for the next 10% correction before I pounce. This may happen if the November inflation number is more than the October inflation number of 6.2%...

A market correction of 10% does not scare me. Even a bear market of 20% does not scare me. I have been through market major declines of 50%, and still remember them very well. Now, that's scary!

Something worse than a bear market would get things very interesting. I currently have a 7-figure stash of cash, and will have a busy time deciding what to buy.

 

[COcheesehead]

No, I am not buying, and not even selling OTM puts like I normally did on a market down day.

Instead, I managed to sell 5 OTM call contracts on some ETFs that managed to be up early in the day, before they suddenly turned tail and followed the rest of the market heading south. The contracts expire next Friday. Made a measly $690, but that's $690 in cash I would not have otherwise. Every bit helps.




A market correction of 10% does not scare me. Even a bear market of 20% does not scare me. I have been through market major declines of 50%, and still remember them very well. Now, that's scary!

Something worse than a bear market would get things very interesting. I currently have a 7-figure stash of cash, and will have a busy time deciding what to buy.

I’ve found over time that people who have a large pile of cash will still sit on it even when it’s the right time to buy. There is always something new to fear. Implement a bucket strategy or figure out an allocation for your risk profile.

 

[NW-Bound]

I’ve found over time that people who have a large pile of cash will still sit on it even when it’s the right time to buy. There is always something new to fear. Implement a bucket strategy or figure out an allocation for your risk profile.

Sure. Here's my strategy for AA.

For me, 75-80% stock AA when people are crying and gnashing teeth.

When they are in elated mood , and "buy, buy, buy" everything under the sun, including meme stocks, IPOs, stocks with no E, and even with no S, I should have 50% stock AA.

And never the aforementioned stocks, at any time.

PS. Quicken says my current stock AA is 64.965%.