Economy crash =/= stock market crash?

Type_45

beavere38 said:

Type_45 said:

beavere38 said:

I don't own any stocks and I would not buy any at the moment based on my observations. This could be a smallish correction or just the start of something much bigger (Or I could be completely wrong of course). I've sold one property I owned and another is SSTC now so hoping to complete on that quickly. That just leaves me my own home. I believe cash is best right now. I can buy properties / stock at a discount later if I am correct. I can't short bitcoin but am shorting Tesla and the indicies.

Each to their own, but I'd have thought that property is the safest bet right now. 

Why do you think Lloyds and BlackRock are buying up residential homes en masse right now? 

I don't think property is the right vessel for capital preservation right now. A major stock market crash is going to cause house prices to drop on its own. The free stimulus money (furlough etc) is coming to a halt. Many businesses are going to the wall and more will do so over the coming months. Rising unemployment coupled with rising interest rates for mortgages will mean house prices have to drop. If you look at the psychology of a market top, the last pop higher before the crash is often fuelled by private investors using leverage and I am seeing just that now with people who have limited funds desperately trying to jump onto the property gravy train using all manner of crazy schemes. Lloyds and BlackRock are closest to the money source so benefit the most, borrow at maybe 1% and get 5 to 7% rental return from the property portfolio, they are happy to cream off 4 to 6% profit.

If you own(ed) properties and rented them out, what difference does it make if house prices drop? They will go back up again eventually.  

george4064

What makes me chuckle is that Beavere38’s technical analysis graphs indicate the market is just as likely to go up (if not more likely) than if it’s going to go down.

beavere38

george4064 said:

What makes me chuckle is that Beavere38’s technical analysis graphs indicate the market is just as likely to go up (if not more likely) than if it’s going to go down.

Could you elaborate please? All indices are breaking down through major support lines and you think they are more likely to go back up than drop further? I'm not being rude but do you understand what support and resistance lines are on  chart?

barnstar2077

george4064 said:

What makes me chuckle is that Beavere38’s technical analysis graphs indicate the market is just as likely to go up (if not more likely) than if it’s going to go down.

Maybe I am just a bit thick, but I am not seeing anything in these graphs either that shows it could go in either direction.

barnstar2077

Are you saying that because they have been going up for a while that we must be due a correction?  (Like using the law of averages to try and predict a roulette spin.)

beavere38

barnstar2077 said:

george4064 said:

What makes me chuckle is that Beavere38’s technical analysis graphs indicate the market is just as likely to go up (if not more likely) than if it’s going to go down.

Maybe I am just a bit thick, but I am not seeing anything in these graphs either that shows it could go in either direction.

You're not being thick and I could be wrong but I will explain what I am seeing. Upward trends everywhere are starting to break to the downside. In technical analysis when a lower line has acted as support (price has historically bounced up from it) and price eventually breaks below that line then that is a warning that the price may drop further. The longer the trend line has been there then the more chance price is headed down. To back this up it is not just happening on one index but multiple ones (Dow, FTSE, Dax, S&P etc) and all the markets have a tendency to move in a similar direction. Dow Transports have already broken this upward trend and are down 8.6% An upward wedge or diagonal is often the end of an uptrend so we have an early warning sign now the lower trend line is breaking. This chart shows an example diagonal along with the Dow beneath it. The angle might appear different but the shape is the same.

barnstar2077

beavere38 said:

barnstar2077 said:

george4064 said:

What makes me chuckle is that Beavere38’s technical analysis graphs indicate the market is just as likely to go up (if not more likely) than if it’s going to go down.

Maybe I am just a bit thick, but I am not seeing anything in these graphs either that shows it could go in either direction.

You're not being thick and I could be wrong but I will explain what I am seeing. Upward trends everywhere are starting to break to the downside. In technical analysis when a lower line has acted as support (price has historically bounced up from it) and price eventually breaks below that line then that is a warning that the price may drop further. The longer the trend line has been there then the more chance price is headed down. To back this up it is not just happening on one index but multiple ones (Dow, FTSE, Dax, S&P etc) and all the markets have a tendency to move in a similar direction. Dow Transports have already broken this upward trend and are down 8.6% An upward wedge or diagonal is often the end of an uptrend so we have an early warning sign now the lower trend line is breaking. This chart shows an example diagonal along with the Dow beneath it. The angle might appear different but the shape is the same.

I see what you are saying, but it could just be a blip (technical term.)

Thrugelmir

If only charting was an accurate science by itself. For the majority of retail investors buy and hold is the best approach. Avoids overtrading and taking speculative positions. 

beavere38

Thrugelmir said:

If only charting was an accurate science by itself. For the majority of retail investors buy and hold is the best approach. Avoids overtrading and taking speculative positions. 

I believe inter market chart analysis is accurate. I've looked at individual stocks and the indices and I see warning signs everywhere. Lets see if bitcoin drops lower next week as I have suggested it will due to the Head and Shoulders patterns on my chart. If it does then Tesla will go down too and the Tesla chart alone is telling me Tesla will drop. Add to this the fact all indices have broken down through a major support line. You can also add to this the fact that bitcoin and the stock market have a tendency to move in a similar direction. Buy and Hold is great unless you buy right at the top in which case you have a long wait on your hands. If I am wrong everyone can laugh at me I really don't care I just wanted to point out the red flags I am seeing.

sevenhills

beavere38 said:

I don't own any stocks and I would not buy any at the moment based on my observations. This could be a smallish correction or just the start of something much bigger (Or I could be completely wrong of course). I've sold one property I owned and another is SSTC now so hoping to complete on that quickly. That just leaves me my own home. I believe cash is best right now. I can buy properties / stock at a discount later if I am correct. I can't short bitcoin but am shorting Tesla and the indicies.

I was reading an article on the BBC website about a possible buyer for Morrisons. The article stated that UK share prices were undervalued compared to other countries.

"BBC business correspondent Katie Prescott said the flurry of takeover activity was being fuelled by relatively low share prices of businesses in the UK compared to abroad and cheap money because of low interest rates"

https://www.bbc.co.uk/news/uk-57541617