OT: OUCH DOW has all time 1 day loss...

[VirginiaCat]

Down 1190 points.

Looks like I'm working a few more years than planned...

[KeithKSR]

It’ll bounce back. Coronavirus fears are driving the drop.

[Catfan73]

Thanks Obama.

[bigsky]

That's not anywhere close to the all time on day loss. In 1987 the Dow lost about 22.6% in one day.

[StuBleedsBlue2]

It’ll bounce back. Coronavirus fears are driving the drop.

As a former derivatives trader for 15+ years, I get a laugh when the media associates pull backs with current events. This is a classic pullback from an overbought, extended rally. If there was real fear in the market, technical patterns would not hold. This decline (and most all declines) is purely from a lack of institutional buying, followed by profit taking and some fearful selling by ordinary investors. Even the VIX is trading within an applicable range for such a move, but it did break out to the upside today. Usually when you see such a breakout on market close, combined with other technical indicators, it signals an immediate reversal.

Institutions will step in soon, as soon as certain retracement levels have been reached, for which the Dow reached one today. We'll want to see the SPX, NDX, and RUT follow suit. If they don't, losses will be extended to the next level, but so far so good. With the VIX spike and retracements reached, I expect a bounce maybe as soon as tomorrow. If the institutional buying doesn't follow, then it will be a short lived bounce before downside resumes.

When the market is predominantly driven by stock buy backs from the tax cuts, this is expected. The Coronavirus is used as an excuse to add fear to the markets to drive prices back to a point where the real money steps back in.

[blueboss]

Met with the money guy last week. He pretty much echoed^^^^


Sent from my iPhone using Tapatalk

[CitizenBBN]

Lemmings are cuter when they don't wear suits and work on Wall Street, but they're still lemmings.

[westtncat]

It's all fear. It's amazing that no one is talking about the Flu which has already killed 8200 Americans this year.

[CitizenBBN]

It's all fear. It's amazing that no one is talking about the Flu which has already killed 8200 Americans this year.

16,000 from the figures I saw for the 19-20 season so far.

It's psychology. With all respect to Stu, this is yes in part a correction, but this is also a bunch of lemmings and coronavirus is absolutely part of this selloff.

I can write a long post about how stocks are basically no different than tulip bulbs, but the truth is the psychology of this is a bunch of people who think they are very smart who are absolutely unaware of the fact they are in a group delusion.

We're so tied to the Asian economies that it absolutely will have an economic impact even if it doesn't hit hard here, and we are due a correction, but this is also just panic selling by people who are far more influenced by psychology than they would ever admit.

[JPScott]

It's all fear. It's amazing that no one is talking about the Flu which has already killed 8200 Americans this year.

Why would that be amazing?

Per the CDC website annual deaths in the US from influenza range as follows:

2011-12 37,000 died
2012-13 12K
2012-13 43K
2013-14 38K
2014-15 51K
2015-16 23K
2016-17 38K
2017-18 61K
2018-19 34K

Overall that comes to an average of 37,000 people dying every year.

Based on a current population in the US of 331 million, that corresponds to a mortality rate of 0.011%, or one person dying out of nearly 9,000 people.

Compare to the coronavirus which seems to have a mortality rate closer to 2% and seems to have a significantly higher rate of transmission (especially troubling since the definite means of transmission still haven’t been established).

If a third of the US population contracted coronavirus (110 million) with a 2% mortality rate that’s 2.2 million people dead in the US alone! Scary stuff.

[CitizenBBN]

But that 2% rate is probably astronomically higher than what we would see in the US. That's in China, where the government literally shoots people who are not worth trying to save.

The problem is we don't really know the death rate in china. It will take getting data from a more reliable nation, like S. Korea or Japan, before we really know.

BTW the flu death rate in Japan is more than double the rate in the US per 100,000.

US: 14.91
Japan: 34.54
S. Korea: 19.84
China: 14.96 (but again very unreliable)

It's very disconcerting no doubt, b/c as you said if transmission rates are way higher than flu (about 29 million this season in the US got it) and mortality rates are that high, it's a lot of people.

The US hospitalization rate for flu is about 1%, but the mortality rate is only 0.05%. That tells me our medical care is dang good at saving their lives even if hospitalized.

If the Wuhan flu is even 5x more transmitted and mortality is 5x more fatal, that's still 362,500 people. That's a lot of people, but heart disease kills about 650,000 per year in the US.

It could be bad, but then again we are obviously going to be a lot more vigilant about not spreading it when compared to the flu, where I've had to send sick people home who were showing up for work with it.

We'll get through it just fine in the end. The problem will be the panic and economic overreaction, and that will take a toll.

[CitizenBBN]

Goldman Sachs of Cash even released a statement saying they expected this to wipe out profits, thus the selloff.

And that's hard to argue. How much is unclear, but with our dependence on China I'd say it's going to be a chunk of it.

[JPScott]

But that 2% rate is probably astronomically higher than what we would see in the US. That's in China, where the government literally shoots people who are not worth trying to save.

The problem is we don't really know the death rate in china. It will take getting data from a more reliable nation, like S. Korea or Japan, before we really know.

To date people have been trying to suggest that China is underreporting the number of people with the virus. Now they're overreporting?

I agree it's too early to know what the mortality rate actually is, but I think at this point we can't discount that it could be 2% or even higher, just because the numbers are coming out of China.

The thing that bothers me the most is that there are so many reported cases of people who have contracted it, but the number who have actually recovered is still lagging. This suggests that the time for recovery is very long and/or there's going to be a spike in deaths associated with the earlier spikes in people contracting the virus.

As far as how it might spread in the US and what the death rate may be, again it's way too early to say with any certainty. Worst case scenario is if the incubation period is one to two weeks and it can be transmitted during this time, then you're going to have a lot of people walking around infecting many others before they've shown any symptoms and thus before they even know they have it. Under that scenario, much of the country could have contracted it before they knew how bad the situation was.

Until we get better data on the mortality rate (along with knowing how long the incubation period is, how long it takes to recover etc.) and more importantly until we get a better handle on how this is transmitted and thus what precautions might be effective, it's a guessing game how this might impact different countries.

China is a very densely populated country but the government can and has restricted movement to try to contain their outbreaks. Western countries have some advantages in terms of less dense populations and usually better healthcare systems etc. however their mobility and freedom of movement may make things worse than China.

Hopefully soon we'll gain a better understanding on how to slow transmission enough that effective treatments and vaccines can be developed in the meantime.

To bring this discussion back full circle, I personally don't expect to see the stock market settle down and mount a sustained recovery until people and insitutions are able to understand the full scope of the situation and can start to plan for the future, even if it's altered dramatically from what they assumed even a few weeks ago. But again, it's just too early to say IMO. I don't want to sound like an alarmist but those who are downplaying the seriousness of this issue are doing a disservice as well.

[CitizenBBN]

I'm not suggesting it's over reported, just that the data is so inaccurate it's hard to know and make comparisons, same as what you are saying.

One thing we do need to do is continue a rolling restriction on travel to countries having outbreaks.

I'm hoping warmer weather will help. Honestly that's our best defense against the flu.

[JPScott]

I'm not suggesting it's over reported, just that the data is so inaccurate it's hard to know and make comparisons, same as what you are saying.

One thing we do need to do is continue a rolling restriction on travel to countries having outbreaks.

I'm hoping warmer weather will help. Honestly that's our best defense against the flu.

Agree that travel bans are prudent at this time.

As for warmer weather solving the issue or at least blunting the spread, hopefully you’re right but even that at this point may be wishful thinking rather than established science. This virus has shown a tendency to spread in Singapore & other places which are already warm.

Again there’s not enough known about this virus to say one way or the other IMO.

[CitizenBBN]

Since the Chinese may have developed it, maybe they can enlighten us all. lol.

[ukpumacat]

To bring this discussion back full circle, I personally don't expect to see the stock market settle down and mount a sustained recovery until people and insitutions are able to understand the full scope of the situation and can start to plan for the future, even if it's altered dramatically from what they assumed even a few weeks ago. But again, it's just too early to say IMO. I don't want to sound like an alarmist but those who are downplaying the seriousness of this issue are doing a disservice as well.

Very well said.