Clearly my call from 2 weeks ago was premature and wrong. The squeeze has been epic but even more epic than I thought. Additionally, the cyclicals and credit have decided to put on a nice move as well since April 7th. At this point the bear case has become weakened due mostly to improving credit. Credit has improved because Draghi has backstopped it and Janet and Obama have been rumored to talk about backstopping the banks on their energy losses. As a result, the VIX has been crushed and volatility has returned pre-August levels. However there are numerous signs of waning momentum and converging DeMark signals in all different types of assets classes. Could we melt up? Yes the possibility is there. I still believe that this is a head fake but I have been stopped out of many positions and would rather see a turn at this point than commit any more capital. I am still short some financial frauds that continue to bleed.
I have come to realize that the CBs are losing power as it takes more and more candy to prop this up. However, I now also realize that they act before in what they call macro prudential actions before the ball really gets rolling. If it is true that they will back stop the banks then this is unprecedented manipulation and moral hazard. This will result in shallower corrections than we might expect. Trading two ways is recommended at this point. The disconnect in financial assets and fundamentals has never been greater than it has been. We have record valuations with declining earnings. The systemic threat has never been greater to both the financial system and the fabric of society as it is now given the political backdrop. If it is true that losses are being absorbed behind the scenes then the 99% will not be pleased. Just the mere threat of this seems to have gotten the job done for now.
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The only way all these debts can be paid
off is with the devaluation of currency.
With this in mind you need
to own assets of some kind to keep even.
Figure out a company that can survive
most anything.,Wait for institutional or hedge fund selloff
and buy something real cheap.The odds are on your side.
There is nothing stopping the central banks from printing money under the table and buying whatever they think needs to be bought. I have zero doubt this is happening.
In the words of Metallica “Sad, but true ….”
I’ll need to see new highs before abandoning the bear-thesis.
I don’t mean in the Dow, but definitely in the S&P 500 & possibly the NASDAQ Composite. Admittedly I got short a bit too soon but I’m not selling my disaster insurance just yet. In fact, I’ve been layering on short exposure to the QQQ’s.
You’re right about the crossroads. This is Do or Die for both Bears & Bulls right now
Do not attempt to adjust you monitor. China now controls the pm markets.
Outer Limits intro: https://www.youtube.com/watch?v=8CtjhWhw2I8 (1 min)
If I understand this correctly, control of the pricing of precious metals has now moved to China with the opening of the Shanghai Gold Exchange.
The London fix will now have to follow whatever SGE does. If they do not, everyone will simply buy in London & sell in Shanghai.
SGE is a real market. No naked trades.
What is China’s plan?
We’re gonna find out in the weeks ahead.
Interesting but odd interview, wrt conclusins. The fox is guarding the henhouse. It ends when there are no more hens.
“The Grave Dancer” Is Cashing Out
ps I’ve been killing it this yr, up 5% yesterday – pm smallcaps
took off a lot of shorts this Friday. will add more on a potential retest of 2075-ish on the s&p