iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
21,264 Blog Posts

CRASH THE CLOSE; MARKETS SAYS DEFLATION LOOMS

While everyone is fixated on the price of lemons at the grocery store, the 10yr is plunging in yield again, suggestive that a flight to quality and price deflation LOOMS just around the bend. I’d say this is a very very precarious tape. As such, I am 75% cash, shed 30bps for the session — only long a few uranium stocks and SPXL for an overnight hold in the event we bounce in the morning.

If we do bounce, SELL THE OPEN.

If we crash the open, buy the open and sell by 10am.

The market is seasonally weak in September and before you know it the Halloween scares will be here, and then it’s smooth sailing into National Festival Day.

While the mood is grim and the pestilence is heavy on the heart, find solace in knowing we will trade great again because we always do and always have. Our jobs from now until then is to trade smart and stay close to gains and avoid, at all costs, blowing up.

If you blow up now in a bad tape, you’ll never be able to profit in the great tapes.

Remember that as you segue into moronic penny stocks with zero prospects other than the next 15 minutes.

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9 comments

  1. soupbone

    Enough money was printed to fuel a massive inflation yet nothing happened for a long while. Now covid-19 triggers ‘transitory’ inflation but it’s like a match struck in a dynamite warehouse. Inflation hits 4% big trouble in stocks if not sooner if not now. Not sure about China but if trade is tied back it will only make matters much worse. ESG will head to the back burner quietly and quickly.

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  2. soupbone

    With longstanding zirp, stock market tolerance of inflation will be lower than the historical average 4% inflation. Might be much lower tolerance.

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  3. emersonlakepalmer

    Inflation – Stocks Good, Bonds Bad

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  4. Mr. Cain Thaler

    What if we are about to get a huge surge of inflation in goods and services but in a way that equities get so thoroughly routed that bond losses are just better by comparison, and this last round of bond buying is more about securing your place on a life raft than long term expectations of prices?

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    • Mr. Cain Thaler

      The problem with bonds is they are at the zero bound while inflation is ramping up.

      The significantly larger problem with equities is they are gambling bonds stay at the zero bound forever to provide support to earnings mutiples on the bottom line (“no other options!”) while inflation and job openings eat their brains at the top line.

      Nobody ever said cash, bonds and equities can’t all be shit at once. One of these will just be food poisoning, another flu, the third terminal cancer.

      Because the thing supporting all 3 was global trade and stupid English majors thought they could flip it on and off like a light switch.

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      • dawg

        Been at this waay longer than you, you’re interesting. STFU and BTFD. Quality stocks! …(NO interest in bonds(maybe a few muni’s or cash)… win and hopefuly you do too….

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  5. Mr. Cain Thaler

    (Chuckles) “listen, busto. I’ve been investing in stocks since 2011…”

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