Irrational
Google’s earnings was decent, yet it is facing a massive sell off right now.
This is why I don’t like to half guess a stock’s direction before earnings, because the market moves whichever way it wants to. It can stay irrational longer than you remain solvent.
So why not wait for the trend to be confirmed. That’s what happening to Google now, and that was what happened to Tesla last week. Wait for the confirmed trend; then trade the trend. And take profits when you can so that you will not lose them all during an “oversold bounce”
Anyway, IBM and Meta will be reporting next. Keep your eyes peeled to them
This is why I don’t like to half guess a stock’s direction before earnings, because the market moves whichever way it wants to. It can stay irrational longer than you remain solvent.
So why not wait for the trend to be confirmed. That’s what happening to Google now, and that was what happened to Tesla last week. Wait for the confirmed trend; then trade the trend. And take profits when you can so that you will not lose them all during an “oversold bounce”
Anyway, IBM and Meta will be reporting next. Keep your eyes peeled to them
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Master Corgi : Good to buy now fundamentals still super strong
razo2 : is not. you need to remember why we rally. the reason is because of the AI mania. Google cloud sector is showing a big sign of weakness.
if you had listened to the Q&A those questions were very specific to cloud and AI. if there is no customers in cloud who is buying AI?
Microsoft showed more strength in their cloud. but the last question that was brought up by an analyst (non main stream, he is after the dude from Morgan Stanley), he asked a very critical question on how many are big companies and SME using the cloud. she replied mostly SME. look at IWM. that will be your answer.
no one dare to asked the biggest elephant in the room. what is the effects of the high bond yields affecting their earnings.
光辉岁月888 : agreed. WS is the market maker-they decide. probably many bet calls before earnings
razo2 光辉岁月888: unless they are playing 0dte. I doubt that is the case. any form of rally is mostly short booking gains and day traders.
if we continue this down trend with no buyers, MM will be forced into gamma squeeze on puts.
razo2 : for those that don't understand what is happening. look at the bond yields. if you think 5% is good, you might want to take a closer look what happens in 2007/2008. something will crack with those high interest rates at 7 to 8% market rate.
toomanyscammers razo2: you mean recession?
razo2 toomanyscammers: you be lucky to get a recession. is called a stagflation
toomanyscammers razo2: in that case, doesn't it mean that it'll be a sustained period of moderately high rates...just like 2023 perhaps and a lull for stocks but prob alright for bonds?
razo2 toomanyscammers: ok, maybe it is good for me to explain this in two different things. one stagflation (inflation + recession/depression), second bonds.
what we are facing now is similar to 1970 stagflation. let's see the check marks for 1970 against 2023/2024:
- 1970 war between Israel and Saudi lead to an oil embargo against the US.
- 1970 inflation problem due to shortage of oil. inflation hit 14% peak on second round, Paul Volcker increased rates to 20% to stop everything for a period of time.
- 1970 the fed pivot and printed money after the first dip of inflation.
let's talk stagflation, what does it mean?
in a normal economic collapse aka recession where the federal government increase rates as inflation goes slightly above 2% at the right time. the economy will have a minor correction. the federal government will print money to save the economy.
so, in stagflation the federal government have to increase rates until the economy collapse. but with a catch in which the federal government cannot print money to save anyone for a period of time (at least 6 to 8 months) due to inflation. 1970 collapse lasted 10 years.
next bond market, back in 1970 the government can afford to increase rates to the moon because of M1 +M2 supply being there to absorb the collapse. today we have the federal government printing T bills and Bonds like a mad man/woman which will kill the bond market as more USD floods the market. not to mention other countries selling bonds as well like Japan, China, India, Saudi. the US economy is in huge debt now aka no more M2. you can imagine this like taking a credit card loan.
the worse your credit rating the higher the banks/credit card company will charge you interest on any loan/debt. same goes for US bonds. so what will happen to your house/car/ credit card loans? well the interest on those loans will increase as well. but your pay is still the same. now you see the problem here?
in stagflation only 2 things do well. commodities and real estate.
razo2 toomanyscammers: when I say real estate. do go crazy and take a 7.9% loan on a house. I mean fully paid real estate.
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