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
21,906 Blog Posts

An Epic Oversold Rally Looms

The biggest gains will be found in SAAS and biotech, the hardest hit rising fastest. The shit stocks hammered to dust might not reflex right away due to weak shareholder based forced to liquidate. However, due to the pressure in the markets you should not expect a V shaped recovery and instead a series of pops and drops that might grind people worse than just a mere rout.

The first mistake was being long at the wrong time. The bigger error would be to short into the hole and get caught in a squeeze and then either double down on those shorts into an even further squeeze based upon recency bias. The back and forth of a bear is what makes it worst.

I’ll try to max gains into the squeeze and then keep longs and shorts and sell them fast, playing for small ball. I will, however, accumulate into any further weakness and will not sell because the next big move, in my opinion, is up.

Nothing more I can say but good luck. Futures are up 100, which means nothing. We’ll get better clarity when Europe opens for trade.

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10 comments

  1. awanka

    I might be overextended here, Mr. Fly. I’m scared, and I love it.

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  2. emersonlakepalmer
    emersonlakepalmer

    I’m having a snicker bar

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  3. tradercaddy

    I know what Fly will be doing at 3 AM.
    Just don’t wake Mrs. Fly or the Wolf.

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  4. purdy

    What can the big names announcing this week say to anyone who does math, sees inflation …and remembers what yield/earnings yield means in such an environment. But perhaps oil coming in a bit would help the pop thesis.

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    • Mr. Cain Thaler

      The big hope that will spark the relief rally is that inflation is topping out. To support this thesis, they will cite the NY Empire State Manufacturing Index along with other manufacturing surveys.

      Tyler Durden has been mentioning this change pretty regularly in his “the Fed will bail them out” thesis.

      However, I believe they are making a serious misjudgment. Normally, demand and supply are roughly in equilibrium. When the manufacturing indexes contract driven by cancelled orders it is because demand has declined which then leaves excess supply. This is the process by which pricing declines.

      That is not what is happening right now. What is happening is the supply chain is exhibiting chaotic systematic collapse behavior. Lead times have just noticeably increased again and contractors are getting quotes – now, in winter – that will not show up until almost the middle or even end of summer. And frequently at prices far beyond what is feasible for projects. In the areas of engineering that have supplier contracts, like auto, prices are more stable…for now…but in areas like civil engineering where bids are conducted on a more case by case basis cost overruns are regularly approaching in excess of 50% above normal cost estimates.

      Projects are being canceled not because demand has declined but because those projects simply have no hope of being completed.

      The supply chain is dragging the manufacturing indexes down. This is highly atypical – a friend at one Michigan engineering firm told me he has never seen conditions like this in his life – and contrary to norm I believe this will not result in the price crash that Zerohedge and others are expecting.

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      • bob smith

        Tyler Durden has been wrong so much over the past 2 years that I don’t waste my time reading anymore. Too much political BS has infected the minds of posters and readers, leaving objective market analysis in the dust.

        Rates are going up, maybe slowly, maybe quickly. Either way, the market will decline, maybe slowly, maybe quickly. The trend is down. There will be bounces that the action junkies will play and that will crucify short sellers but I’m sitting on the sidelines, watching the carnage as a spectator.

        I’m waiting for the near-perfect pitch before I swing. It’s coming and I probably won’t hit the best pitch but we’re not even close at present. Most current market players have never experienced a bear market and have no idea what’s in store or how to profit from it.

        The main idea is to buy when there is fear and blood in the streets and we’re not even close at present. FWIW, I believe we’re entering a long-term bear market where profits should be harvested before they disappear. It’s probably too late for the crypto crowd in this regard.

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  5. Mr. Cain Thaler

    Nothing makes me feel better about shrugging off all the hate and shade thrown at American gun owners like watching Belgians getting caned around by riot police enforcing COVID curfew.

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  6. tjnyt

    I’m 300%long, first, we go up 4-5% and then drop to a lower low. Make a LOWER double bottom and THEN decide bear or bull. GLT.

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  7. iflyjetzzz

    No rally on Margin Call Monday.
    Maybe Tuesday.
    If not Tuesday, then Wednesday.
    But not Margin Call Monday.

    The crypto crash is going to trigger more margin calls on Monday. Bitcoin fell something like $3K between market close on Friday and now (overnight Sunday/Monday AM)

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