S & P broke major technical/psychological number

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
prettybogle
Posts: 224
Joined: Sun Mar 01, 2015 10:44 am

S & P broke major technical/psychological number

Post by prettybogle » Sat Sep 16, 2017 10:32 am

S & P broke and also closed above the key psychological number 2500. Pretty happy as this is very bullish and we may see 3000 in a year or so :D . Only regret is we still have 30k sitting in the sidelines waiting for a correction :( . This technical development may convert more bears into the bulls camp.

livesoft
Posts: 57302
Joined: Thu Mar 01, 2007 8:00 pm

Re: S & P broke major technical/psychological number

Post by livesoft » Sat Sep 16, 2017 10:49 am

Yeah, baby, let's talk technical analysis and market timing!

My question for you is what is going to happen with international stocks? They are up 20% to 30% for US investors so far this year and just had a great couple of weeks. What do your charts tell you?

Also, is it time to sell foreign index funds and buy US small-cap value index funds?
This signature message sponsored by sscritic: Learn to fish.

jebmke
Posts: 7017
Joined: Thu Apr 05, 2007 2:44 pm

Re: S & P broke major technical/psychological number

Post by jebmke » Sat Sep 16, 2017 10:50 am

The blue line has done well this year.
When you discover that you are riding a dead horse, the best strategy is to dismount.

ResearchMed
Posts: 5496
Joined: Fri Dec 26, 2008 11:25 pm

Re: S & P broke major technical/psychological number

Post by ResearchMed » Sat Sep 16, 2017 10:52 am

jebmke wrote:
Sat Sep 16, 2017 10:50 am
The blue line has done well this year.
Thanks for the update. I've been so worried, not knowing!!
:twisted:

RM
This signature is a placebo. You are in the control group.

User avatar
arcticpineapplecorp.
Posts: 2363
Joined: Tue Mar 06, 2012 9:22 pm

Re: S & P broke major technical/psychological number

Post by arcticpineapplecorp. » Sat Sep 16, 2017 10:53 am

prettybogle wrote:
Sat Sep 16, 2017 10:32 am
S & P broke and also closed above the key psychological number 2500. Pretty happy as this is very bullish and we may see 3000 in a year or so :D . Only regret is we still have 30k sitting in the sidelines waiting for a correction :( . This technical development may convert more bears into the bulls camp.
These two statements are in opposition. If you believe the S&P500 will rise then why would you be still sitting on the sidelines? Isn't it better to invest at S&P500 at 2500 than 3000?

Also, not sure what "key psychological number" is supposed to mean. Don't remember Freud writing about that in my college textbooks. If 2500 is a "key psychological number" than is 3000 an even more "key psychological number"? You see how silly this is?

The numbers don't matter, percentages do. If the S&P500 goes from 2500 to 3000 that's a 20% rise. If the DOW is at 22,000 but rises 20% it's a 4400 point rise. Who cares? It's both the same percentage rise. And do you think the S&P500 will "only" rise 20% more (from 2500 to 3000) and not continue to grow over time? At some point in the future, you'll be saying "Do you remember when the S&P500 was "only" at 2500?"

Back when the Great Recession was on the largest POINT decline was 777.68 (9/29/08) but that "only" represented a 6.98% loss. The loss in 1987 was far worse 22.61% but "only" a 508 POINT loss. Do you see how the number (point) of the index is related to the percentage gains/losses? Without looking at percentages there's no context. Saying the Dow is up 500 points means something when the Dow was at 1000 (50% increase) but less so when the Dow is at 10,000 (only a 5% increase). It's context that matters. Never forget that.

So the POINT move of the S&P500 or whatever doesn't mean as much as the percentage move. Don't worry about where the S&P500 is. Invest for your future.

I know it's the Dow and not the S&P500 but still...see here:
https://en.wikipedia.org/wiki/List_of_l ... al_Average
Last edited by arcticpineapplecorp. on Sat Sep 16, 2017 10:56 am, edited 3 times in total.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

livesoft
Posts: 57302
Joined: Thu Mar 01, 2007 8:00 pm

Re: S & P broke major technical/psychological number

Post by livesoft » Sat Sep 16, 2017 10:53 am

The red, green, yellow, black, and pink lines have done well, too.
This signature message sponsored by sscritic: Learn to fish.

User avatar
vitaflo
Posts: 818
Joined: Sat Sep 03, 2011 3:02 pm

Re: S & P broke major technical/psychological number

Post by vitaflo » Sat Sep 16, 2017 11:02 am

arcticpineapplecorp. wrote:
Sat Sep 16, 2017 10:53 am

Also, not sure what "key psychological number" is supposed to mean. Don't remember Freud writing about that in my college textbooks. If 2500 is a "key psychological number" than is 3000 an even more "key psychological number"?
People put auto-sells at round numbers. It's pretty common. 2500 is a nice round number. Since the market ended above 2500, the theory goes that all those people who auto-sold at 2500 are already out of the market. IE, you've gotten rid of the pessimists, which is why it's a "psychological number".

Whether this is actionable or meaningful for an index is another story entirely.

User avatar
triceratop
Moderator
Posts: 3797
Joined: Tue Aug 04, 2015 8:20 pm
Location: la la land

Re: S & P broke major technical/psychological number

Post by triceratop » Sat Sep 16, 2017 1:31 pm

livesoft wrote:
Sat Sep 16, 2017 10:49 am
Yeah, baby, let's talk technical analysis and market timing!

My question for you is what is going to happen with international stocks? They are up 20% to 30% for US investors so far this year and just had a great couple of weeks. What do your charts tell you?

Also, is it time to sell foreign index funds and buy US small-cap value index funds?
You heard it here: it's time to buy both international and US small cap value. Investors still underappreciate foreign stocks, and US SCV has gone nowhere this year.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

livesoft
Posts: 57302
Joined: Thu Mar 01, 2007 8:00 pm

Re: S & P broke major technical/psychological number

Post by livesoft » Sat Sep 16, 2017 1:44 pm

I'm gonna wait for confirmation on that from grap0013. :twisted:
This signature message sponsored by sscritic: Learn to fish.

User avatar
Pajamas
Posts: 2838
Joined: Sun Jun 03, 2012 6:32 pm

Re: S & P broke major technical/psychological number

Post by Pajamas » Sat Sep 16, 2017 1:46 pm

Looks like it's time to buy that expensive house you were looking at! :beer

livesoft
Posts: 57302
Joined: Thu Mar 01, 2007 8:00 pm

Re: S & P broke major technical/psychological number

Post by livesoft » Sat Sep 16, 2017 2:22 pm

I want some credit for the thread hijack and making this thread both actionable and interesting.
This signature message sponsored by sscritic: Learn to fish.

User avatar
triceratop
Moderator
Posts: 3797
Joined: Tue Aug 04, 2015 8:20 pm
Location: la la land

Re: S & P broke major technical/psychological number

Post by triceratop » Sat Sep 16, 2017 2:24 pm

I think it was clear I wasn't suggesting actual market timing, nor that my joking guess as to technical analysis could be mistaken for serious portfolio advice. And yes livesoft and I made the only two actionable posts :)

However I am impressed you know that I am "Wrong". Prescient!
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

prettybogle
Posts: 224
Joined: Sun Mar 01, 2015 10:44 am

Re: S & P broke major technical/psychological number

Post by prettybogle » Sat Sep 16, 2017 2:49 pm

arcticpineapplecorp. wrote:
Sat Sep 16, 2017 10:53 am
These two statements are in opposition. If you believe the S&P500 will rise then why would you be still sitting on the sidelines? Isn't it better to invest at S&P500 at 2500 than 3000
Because at any time, we only invest a fixed percentage in the stock market. this will let us sleep well at night.

User avatar
arcticpineapplecorp.
Posts: 2363
Joined: Tue Mar 06, 2012 9:22 pm

Re: S & P broke major technical/psychological number

Post by arcticpineapplecorp. » Sat Sep 16, 2017 3:21 pm

prettybogle wrote:
Sat Sep 16, 2017 2:49 pm
arcticpineapplecorp. wrote:
Sat Sep 16, 2017 10:53 am
These two statements are in opposition. If you believe the S&P500 will rise then why would you be still sitting on the sidelines? Isn't it better to invest at S&P500 at 2500 than 3000
Because at any time, we only invest a fixed percentage in the stock market. this will let us sleep well at night.
But then there's still an opposition...you say you sleep well at night (because of the money "sitting on the sidelines") but then also say you have regrets (because of the money "sitting on the sidelines"). So, why have regrets if you've predetermined this money has no business being invested because it's your sleep well at night money? You should have no regrets because you're following your plan.

Also in opposition...you say this is not invested in the market because it lets you sleep well at night...but you also said originally, "Only regret is we still have 30k sitting in the sidelines waiting for a correction." So which is it? It doesn't really sound like your sleep well at night money because you plan to invest it at some point (hopefully when the market falls).

Do you see the points I'm making? It doesn't seem like you're clear on the $30,000 sitting on the sidelines. If you plan to invest it, do it. If not, don't. You're planning on investing it (after the market goes down). Be clear with your intentions. And realize that's called "market timing". And I seriously wonder whether you'll be able to invest the money after the market goes down 20% or 30% or whatever. Many people are so shell-shocked at seeing what they DO/DID have invested suddenly much lower that they can't bring themselves to "throw good money after bad". Do you really know how you'll react after a market decline that you're hoping for?
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

garlandwhizzer
Posts: 1671
Joined: Fri Aug 06, 2010 3:42 pm

Re: S & P broke major technical/psychological number

Post by garlandwhizzer » Sun Sep 17, 2017 1:09 pm

Personally I place no faith in technical analysis or in threshold psychological numbers as predictors of future market action. This news does not change my outlook in any way.

Garland Whizzer

User avatar
nedsaid
Posts: 8851
Joined: Fri Nov 23, 2012 12:33 pm

Re: S & P broke major technical/psychological number

Post by nedsaid » Sun Sep 17, 2017 3:29 pm

prettybogle wrote:
Sat Sep 16, 2017 10:32 am
S & P broke and also closed above the key psychological number 2500. Pretty happy as this is very bullish and we may see 3000 in a year or so :D . Only regret is we still have 30k sitting in the sidelines waiting for a correction :( . This technical development may convert more bears into the bulls camp.
My understanding is that the Hindenburg Omen indicator flashed recently. Oh the humanity! The time before when it flashed, the market went up. I have very little faith in technical analysis. Burton Malkiel pretty thoroughly skewered it in his famous book.
A fool and his money are good for business.

User avatar
Toons
Posts: 12104
Joined: Fri Nov 21, 2008 10:20 am
Location: Hills of Tennessee

Re: S & P broke major technical/psychological number

Post by Toons » Sun Sep 17, 2017 5:03 pm

Waiting for a correction?
The clock is ticking.
Compounding never sleeps,
Put the sideline money to work.
Time,
Not Timing :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

harvestbook
Posts: 334
Joined: Sat Mar 18, 2017 7:12 pm

Re: S & P broke major technical/psychological number

Post by harvestbook » Sun Sep 17, 2017 5:06 pm

Sweet, time to sell out and nab me some Bitcoins!
I'm not smart enough to know, and I can't afford to guess.

Nicolas
Posts: 792
Joined: Wed Aug 22, 2012 7:41 am

Re: S & P broke major technical/psychological number

Post by Nicolas » Sun Sep 17, 2017 5:34 pm

The psychological effect could be short-lived. See the clippings below about the first breach of 1000 by the DJIA.

https://www.cnbc.com/id/18274839/

November 1972 – The Dow breaks 1000 for the first time.

Shortly after the re-election of Richard Nixon, the blue-chip index closes at 1003.16. Within months, the worst bear market in half a century will begin, with the Dow losing 40% of its value at one point.

November 1980 – The Dow finally regains the 1000 following the presidential election of Ronald Reagan.

http://www.nytimes.com/learning/general ... /1114.html

New York Times November 15, 1972

Dow Jones Finishes Above 1,000

Special to THE NEW YORK TIMES

The Dow Jones industrial average closed above the 1,000 mark yesterday for the first time in history.

It finished at 1,003.16 for a gain of 6.09 points in what many Wall Streeters consider the equivalent of the initial breaking of the four-minute mile.

This thing has an obvious psychological effect," declared one brokerage-house partner. "It's a hell of a news item. As for the perminence of it -- well, I just don't know."

Last Friday, the Dow surpassed 1,000 during the course of a day's trading, but it fell back below the landmark figure by the end of the session.

But yesterday the marker was not to be denied. The Dow finally put it all together, the peace rally, the re-election of President Nixon, the surging economy, booming corporate profits and lessening fears about inflation and taxes and controls and other uncertainties of 1973.

EddyB
Posts: 359
Joined: Fri May 24, 2013 3:43 pm

Re: S & P broke major technical/psychological number

Post by EddyB » Sun Sep 17, 2017 5:42 pm

I'm waiting for it to break a major physiological number before I get excited.

SirRunsabit
Posts: 32
Joined: Tue Jul 18, 2017 6:21 am
Location: Earth

Re: S & P broke major technical/psychological number

Post by SirRunsabit » Sun Sep 17, 2017 10:36 pm

Who doesn't like a good round number? For me there's one number that counts, and I have yet to reach it. Invest on!
Hi!

OkieIndexer
Posts: 318
Joined: Sun Aug 23, 2009 1:10 pm

Re: S & P broke major technical/psychological number

Post by OkieIndexer » Tue Sep 19, 2017 1:39 am

I'm sure breaking above 1500 was also seen as a "major technical/psychological number" for the S&P 500 in March 2000, too, but that marked a 7 year top rather than an omen of more good returns ahead.

Post Reply