[Discussion] How Do You Tell When a Market Armageddon Is Coming?
Some say that a market crash is the best opportunity for ordinary people to make money. Most retail investors have small capital and average trading skills, so they rarely make significant profits in normal markets. But a crash is different — after a major plunge or even a 50% wipeout, going all-in can lead to outsized gains.
But how can you tell whether something is truly a market crash? And when should you start bottom-fishing?
For most investors, the biggest question during a downturn is when to buy the dip.
If you buy too early, the volatility will shred your nerves; buy too late, and you miss the bottom — or hesitate to buy during the rebound. Either way, you end up making nothing.
Some say sentiment is the key to judging whether it’s time to bottom-fish and whether the situation qualifies as a crash.
Today, the fear index for the market has already reached 7 — extreme fear. But back in April, extreme fear dropped as low as 4. So does that mean we haven’t bottomed yet?
If we really repeat April, the downside could be much worse. And for now, $NASDAQ(.IXIC)$ is only down about 8% from its high and still up 14% year-to-date, which hardly counts as a crash.
Others say you can judge it by watching your friends or your stock-trading groups.
At the start of a decline, everyone still blames the CEO or curses at the market. But once most investors are deep in losses, out of cash, and too defeated to complain, that’s when the bottom is in.
So some believe you should always keep at least 50% of your funds available — ready for the next real crash.
Although the market is dropping sharply right now, the scale of the decline still doesn’t look like what we saw in April.
So how do you know when a true market crash has begun?
And which indicators can help you pick the bottom?
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I also watch the mood in stock groups. Early in a decline, people still rant and blame CEOs. The real bottom often appears when everyone goes quiet — when losses are deep and no one has energy to complain. That kind of silence is a stronger signal than any index, and we’re not there yet.
So at this point, I don’t think this is a true crash. The drop is sharp but lacks clear signs of capitulation. To find the real bottom, I look for extreme fear, investor silence, forced selling, and irrationally oversold prices. Until those show up, I stay patient.
@Tiger_comments @TigerStars @Tiger_SG
虽然我们的恐惧是有道理的，但历史——那位无情的老师低声讲述了一个不同的故事。它提醒我们，从长远来看，市场总是会上涨的。
我们的目标不是完美地把握市场末日的时机，也不是确定绝对底部。这项任务的徒劳会让任何人心烦意乱。过早购买感觉就像是一记重击。买得太晚意味着错失良机。
好消息是什么？我们不必选择。
智慧不在于时机，而在于过程。我们的使命是专注于我们能控制的事情——我们的情绪和我们的行为。
这就是美元成本平均法安静、一致的力量发挥作用的地方。当阳光再次照耀市场时，我们的耐心和纪律将是我们自豪地回顾的东西。
@Tiger_SG @TigerStars @Tiger_comments @TigerClub @CaptainTiger
Check them in the history - “community distribution“
Key indicators of a market crash include overvaluation, rising debt levels, interest rate hikes, yield curve inversions, extreme investor sentiment, and weakening economic fundamentals, such as slow GDP growth, rising unemployment, and falling corporate earnings
To identify a market bottom, watch for extreme fear, high trading volume signaling capitulation, and signs of recovery in key stocks or indices
The most effective approach is not to try to time the market, but to use these indicators for risk management, recognizing when the warning signs point to a risky top and when bottom indicators suggest capitulation
Tag :
@Huat99
@Snowwhite
Indicators that can help to pick the bottom:
- RSI below 20
- VIX above 30
- Price action shows the trend touching previous resistance level.
Phase 2: Dropping of another few days of -1% to -3% after the 1 st technical rebound..
This time round, it seems like market sentiments have cooled and everyone is slowly following to trend to cash out, and likely some are done in panic to try and catch whatever profit they still have.
It can be a good time to keep buying as the dip happens, speculating it feels silly lest you miss out on a good deal.
第一，情绪是否麻木。不是恐慌，而是“连抱怨的力气都没有”。
第二，是否出现被迫卖出。比如 ETF 折价、融资断头、基金被赎到崩。
第三，优质股是否被无差别砍价。龙头公司跌到估值极端，这通常是末段信号。