Investing General Discussion
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Fogel
Mr. Poopybutthole
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The algo's aren't programmed to be one size fits all buy at the 50 dma, they're adjusted daily by the people who programmed them. So if something falls below the 50 MA, there's still reasons i.e. recall, earnings, rumor, lawsuit, etc.
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Shonuff
Mr. Poopybutthole
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And they do have AI programs for retail investors. I look at the reviews on some of them on youtube and wonder what would happen if I messed with AI a little bit as an experiment.
Overall, I hear AI is shit for us.
Jysin
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Not exactly. It's just a self fulfilling prophecy of which day traders have trade around chart patterns. Algos are programmed based on the human behavior, then we adjust to algo behavior and it all becomes somewhat predictable.
The shitstorm is on the fundamentals side. The 2020-2021 newer idea of "fundamentals be damned, buy at any cost!" That is going to end badly, especially in certain sectors and speculative growth. This is the far greater risk to market vs widely acceptabe (over decades now) technical analysis.
Shonuff
Mr. Poopybutthole
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When I was in B-school, we visited mutual funds that preached fundamentals. Every last one of them said fundamentals > than all. But when we walked around their offices, every last one of the Employees was looking at technicals. It was up on every computer screen.
YMMV
YMMV
Jysin
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In a normal market, they shouldn't be exclusive of one another. Basically what
Sanrith Descartes
has been preaching for ages in this thread. Find a company that is solid in their balance sheets (Fundamental Analysis), then using Technical Analysis to identify your ideal entries. Pullbacks to 100D / 200D support, etc.Even those big hedgefunds are rarely ever just executing block orders at all time highs on specific names. They are looking for better entries as well, even if it's simply near vwap on a certain day.
Blazin
Creative Title
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They are separate issues. Fundaments are the destinations, technicals are the various rules and roads that gets the stock to the destination. They are not competing.
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Sanrith Descartes
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Ahh you need to go with the concept that this isnt single variable algebra. The algos are written with bazillions of variables. DMAs exvist for pretty much every whole number. The finance community tends to focus on 10, 20, 50, 100 and 200 but there is a moving average for every whole number of days you want to chart.
Sanrith Descartes
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We are already seeing this in the rotation out of high growth no revenue/profit companies. The days of ignoring EPS might be coming to a close.
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Sanrith Descartes
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Sanrith Descartes
Veteran of a thousand threadban wars
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For those playing at home, the QQQ bottomed in the pre-market at 8am at $374.54 (down 1.4%). That is above the 200-DMA and about 2% above its intermediate line of support at $367.73
My guess is we see a test of the 200-DMA if not today than probably this week. The 200-DMA and intermediate support should intersect in the very near future (possibly this week). If it fails to hold then things get fun. A continued drop to $350 would be the next logical attempt to regroup. $350 would be an 8% drop form Friday's close and just under a 15% drop from the 52 high.
My guess is we see a test of the 200-DMA if not today than probably this week. The 200-DMA and intermediate support should intersect in the very near future (possibly this week). If it fails to hold then things get fun. A continued drop to $350 would be the next logical attempt to regroup. $350 would be an 8% drop form Friday's close and just under a 15% drop from the 52 high.
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Jysin
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To further validate technical analysis: For those of you watching technicals, the premarket QQQ hit (to the penny) the longstanding Ascending Support trend line from Oct 2020 . Every QQQ pullback of any significance over this entire period has exactly held this support level. This is fairly critical and if we give it up, I expect we magnet straight to the 200DMA as Sanrith pointed out.
Daily View:
Premarket this AM (same dashed blue line):
Daily View:
Premarket this AM (same dashed blue line):
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Sanrith Descartes
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Because it excludes Comms companies like GOOG and FB, FTEC tracks a little differently than QQQ. We closed just above the 100-DMA on Friday. The 200-DMA and intermediate support line have already intersected. We have about a 5.6% drop to that intersection (around $121.23). That is about a 12% drop from the 52-high. A failure there is a path down to around $117.50. I won't be surprised to see a quick drop down to $126 at/near the open. From there its sort of in no man's land between the 100 and 200. I added at the 100 on Friday and if we test the 200 I will add again heavier. Tech hasn't breached the 200 since Black Monday.
Sanrith Descartes
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For non-day traders this is important stuff. Long term buy/hold investors should be looking at the next few days as places to drop some cash in the indexes. I still firmly believe the indexes should be account for at minimum 40-50% of your entire portfolio. The 100 DMA is a strong entry point. The 200 is a back the truck type of entry point. It doesn't mean we dont breach and continue to fall, but it means historically that its an entry point we dont see but once every few years in a strong market.
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Sanrith Descartes
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I have been keeping an eye on it. If it eventually see the 100 DMA I might grab some.
Shonuff
Mr. Poopybutthole
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I'm old. I remember when they used to teach Capital Asset Pricing Model and ignored everything else. My first degree was in the early 90s from Penn State. Technicals weren't even an issue. All the Profs did was talk about CAPM until your ears bled. How boring.
Later, if you mentioned technicals, they laughed you out of the room. I used to tell people they didn't know jack using that technical voodoo. But things have changed.
The technicals vs fundamentals issue used to make for a pretty big argument among Finance types. In the early 2000s, if you wanted to start a no-holds barred argument, say one was better than the other and run.
Sanrith Descartes
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Something that bears consideration in all convos is AAPL. It had such a parabolic run up in Dec that it has contorted its moving averages. By virtue of its weight in the indexes, its movement really is key to watch. It is a full 10% above its 100 DMA while QQQ and FTEC are sitting at their 100 DMAs. AAPL letting air out of its Dec run could force the indexes down further than their support by virtue of AAPL's outsized influence.
edit: forgot to add it is still over 4% above its 50 DMA.
edit: forgot to add it is still over 4% above its 50 DMA.
Gravel
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All they talked about was CAPM in 2009 when I went, too. Although I didn't go to a fancy T1 business school like you, so that could account for that.