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Message
Downside Protection on Pullback
Posted on 1/21/21 at 2:57 pm
Posted on 1/21/21 at 2:57 pm
Put in a limit order today for TAIL. Basically, it's protection from a market correction. My target for the DOW was 32,000 and we are almost there. Other than some long term holdings I'm confident in, I'm pairing down and waiting for another buying opportunity.
What is everyone else doing? Are we all still optimistic?
What is everyone else doing? Are we all still optimistic?
Posted on 1/21/21 at 2:58 pm to Aubie Spr96
With all the stimulus Biden plans to do, I’m not expecting a pullback. Quite the opposite.
Posted on 1/21/21 at 2:59 pm to Aubie Spr96
quote:
My target for the DOW was 32,000 and we are almost there.
Seems kind of arbitrary tbh. Do you have a reason for this?
Posted on 1/21/21 at 3:08 pm to Aubie Spr96
quote:
I'm going to try and time the market
Fify
Posted on 1/21/21 at 3:09 pm to Tigerfan56
quote:
With all the stimulus Biden plans to do, I’m not expecting a pullback. Quite the opposite.
You don't think this is baked in already? Stock markets are forward looking.
quote:
Seems kind of arbitrary tbh. Do you have a reason for this?
It is kinda arbitrary. Just looked at some historical DOW trends and had that as my target number to start pairing down, locking in gains, and waiting for a pullback to reinvest. Nothing political. I don't think Biden will be as bad for the market as some think.
Posted on 1/21/21 at 3:45 pm to Aubie Spr96
you will know when it’s time to retrace your steps when the fed tightens up monetary policy (ie: when they stop buying).
until then the markets have a safety net and are proceeding apace
until then the markets have a safety net and are proceeding apace
Posted on 1/21/21 at 3:46 pm to Aubie Spr96
You'll probably get downvoted to hell because most don't like to acknowledge potential downturns, but I think it's prudent to have a plan.
I think certain parts of the market are bubbly, especially in growth (most notably tech). Even the indices are being propped up by a few large companies.
I've never heard of TAIL. I know certain strategies of purchasing Puts to hedge, but I've personally never done it. I like the idea rather than just selling though.
Also, some knowledgeable people play the VIX, but I've only dabbled in that.
I'm interested to hear ideas from some of the smart folks around here.
ETA: I agree that current Fed policy will prop up markets at least for the short term, but I do expect to see some drastic moves to the downside this year.
I think certain parts of the market are bubbly, especially in growth (most notably tech). Even the indices are being propped up by a few large companies.
I've never heard of TAIL. I know certain strategies of purchasing Puts to hedge, but I've personally never done it. I like the idea rather than just selling though.
Also, some knowledgeable people play the VIX, but I've only dabbled in that.
I'm interested to hear ideas from some of the smart folks around here.
ETA: I agree that current Fed policy will prop up markets at least for the short term, but I do expect to see some drastic moves to the downside this year.
This post was edited on 1/21/21 at 3:48 pm
Posted on 1/21/21 at 3:48 pm to Aubie Spr96
what's that saying? Time in the market > timing the market
Posted on 1/21/21 at 3:54 pm to cgrand
quote:
until then the markets have a safety net and are proceeding apace
While you have a point, it’s worth acknowledging this same refrain was making the rounds in 2000, and in 1929 for that matter. The Fed seems hellbent on doing all they can to prevent a major downturn in risky asset markets, but it’s not the guarantee some perceive it to be (not saying you’re doing that here, just pointing out the Fed doesn’t give the markets immunity from experiencing a major correction).
Posted on 1/21/21 at 4:09 pm to rintintin
quote:
You'll probably get downvoted to hell because most don't like to acknowledge potential downturns, but I think it's prudent to have a plan.
Yeah. Taking profits and sitting on the sidelines for a bit seems like a prudent move at this point in the run up. Again, not a total divestiture. I'm keeping positions that I believe in long term.
Posted on 1/21/21 at 4:23 pm to Aubie Spr96
quote:
Yeah. Taking profits and sitting on the sidelines for a bit seems like a prudent move at this point in the run up.
We’ve had multiple threads with this line of thinking every month since July. What makes this time the smart move?
Posted on 1/21/21 at 4:40 pm to JohnnyKilroy
quote:
What makes this time the smart move?
The market hit my run up target? The last four market run ups were 2012-2015 (40%), 2015-2018 (42%), 2018-2020 (25%), 2020-2021 (40%) on the DJIA. The pullbacks have averaged about 15%. I think that's easily doable at these levels. Possibly worse if we get some bad COVID news or lose Biden.
Posted on 1/21/21 at 5:10 pm to Aubie Spr96
Thanks for letting me know about TAIL. I need to check that out.
I bought VIX calls last year and was off by a few weeks from making a killing - basically a constant theme. Seems like most times I don't have luck getting a good price.
I bought VIX calls last year and was off by a few weeks from making a killing - basically a constant theme. Seems like most times I don't have luck getting a good price.
Posted on 1/21/21 at 5:19 pm to tigerfan4444
TAIL seems to be the less risky pullback bet.
Posted on 1/21/21 at 6:31 pm to JohnnyKilroy
quote:
We’ve had multiple threads with this line of thinking every month since July. What makes this time the smart move?
Ever month since 2009 when I first started to hang out here. Want to guess how many got it right? Lot of gains in the market were missed by a bunch of people.
This post was edited on 1/21/21 at 6:33 pm
Posted on 1/21/21 at 8:20 pm to Aubie Spr96
“You can’t fight the fed.”
I’m selling puts on stocks I would by at lower prices.
I’m selling calls on stocks I would sell at that strike.
You can make money in any market. Just have to manage risk.
Perversely, big oil might benefit from the pipeline and drilling decisions.
Big insurance companies and banks may get a boost from a little higher interest rate.
I would not make rash decisions like going 100% cash based on politics.
Many corporations give to both sides and play ends against the middle.
I voted for Trump, but markets in the US will likely go though the same corrections and runs they have for the last 100 years.
I’m selling puts on stocks I would by at lower prices.
I’m selling calls on stocks I would sell at that strike.
You can make money in any market. Just have to manage risk.
Perversely, big oil might benefit from the pipeline and drilling decisions.
Big insurance companies and banks may get a boost from a little higher interest rate.
I would not make rash decisions like going 100% cash based on politics.
Many corporations give to both sides and play ends against the middle.
I voted for Trump, but markets in the US will likely go though the same corrections and runs they have for the last 100 years.
Posted on 1/21/21 at 8:45 pm to rintintin
quote:this is simply not true.
most don't like to acknowledge potential downturns
quote:of course. But the plan does not need to be reactionary, because that makes you more likely to panic and act on emotion. The plan needs to factor in potential downturns at any time. Be it rebalancing (this includes taking profits) , trimming overweight positions etc.
but I think it's prudent to have a plan.
Not when you feel like it, because history says you're likely to be wrong as you'd have to time entry and exit.
There was a poster here that had an interesting strategy, Iowa Golfer, I believe. Can't remember the specifics, but the gist was to buy puts and just view the premium as insurance for his holdings. "people insure everything else, why not their portfolios" was his MO.
This post was edited on 1/21/21 at 9:10 pm
Posted on 1/22/21 at 7:28 am to castorinho
quote:
My target for the DOW was 32,000 and we are almost there. Other than some long term holdings I'm confident in, I'm pairing down and waiting for another buying opportunity.
Similar outlook here. I'm expecting a pullback into the $3480 range for S&P in the next few weeks, before the S&P subsequently rallies to $4400+ by this time next year.
I took some YE profits and increased cash levels awaiting an entry point trigger for several targeted equities.
Those of us in the 60+ age group are likely forced to play it differently than younger investors that can spread market risk over a longer measurement period .... Just my dos centavo$ .....
Posted on 1/22/21 at 8:14 am to Aubie Spr96
I think we will rip for the next 6 months. Too much stimulus to stop. But there will be a reckoning.
My suggestion is the giant techs. Amazon, Alphabet, Apple, etc. those are the blue chips of the modern day and they will weather the storm.
My suggestion is the giant techs. Amazon, Alphabet, Apple, etc. those are the blue chips of the modern day and they will weather the storm.
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