Black Week (Mar 5 - 9)
- Thread starter mg_mg
- Start date
If there's truth to a slowing economy and imminent recession, then the support levels you point to will be transformed into resistance levels in the next 6 months. Obviously, it depends on whether recent market activity is a mere correction, or if we're witnessing the beginnings of a bear market.
To be sure, "common man" sentiment must be taken into account. Those who purchased homes in the past few years have since suffered a severe loss of equity and are in no mood to lose more in the market. In other words, if the decline continues, many will pull out altogether to save what little money they have left thus perpetuating market declines -- a domino effect of sorts.
Moreover, the tech bust a few years back remains at the forefront of people's imaginations, and fear of a repeat -- whether rational or not -- continues to occupy their thoughts.
While I too am looking at support levels for the broader indices, I am not currently attempting to forecast a bottom. Instead, I see present market conditions as ideal for traders, whereas investors, who rarely short the market, will likely lose the profits they've made over the past couple of years.
To be sure, "common man" sentiment must be taken into account. Those who purchased homes in the past few years have since suffered a severe loss of equity and are in no mood to lose more in the market. In other words, if the decline continues, many will pull out altogether to save what little money they have left thus perpetuating market declines -- a domino effect of sorts.
Moreover, the tech bust a few years back remains at the forefront of people's imaginations, and fear of a repeat -- whether rational or not -- continues to occupy their thoughts.
While I too am looking at support levels for the broader indices, I am not currently attempting to forecast a bottom. Instead, I see present market conditions as ideal for traders, whereas investors, who rarely short the market, will likely lose the profits they've made over the past couple of years.
equities exist more in a bull phase most of the time then in a bear phase. So probabilities dictate that when a bear phase is in process, the force of it will surpass any knife catchers. But these phases are fleeting. And another constuctive phase starts when significant support levels start. During the constructive phase probabilities are in your favor when you chose to play the long side.
To prevent stops from being hit, you can only play at outliers like daily lows.
During a bear phase you can only play it close to daily highs. For shorts.
To prevent stops from being hit, you can only play at outliers like daily lows.
During a bear phase you can only play it close to daily highs. For shorts.
I'm probably alone in this view, but I think the markets are fearful of credible central bank policy (yeah, crazy, I know). When I look at gold, it was hit quite hard this week. I heard the same story all week that traders were selling gold to raise money to fend off margin calls. Everyone repeated this same story over and over again. No independent thinking goin on.
The only thing which will kill the gold rally is credible central bank policy (primarily from the Fed). We've seen money pouring into the most speculative markets and now it's coming out. Gold is no exception. The marginal demand for gold is investment demand which stems from people's lack of confidence in paper money.
Anyways, long story made short, ignoring all the talking heads and strategists, i think we can sum up this week's action quite easily: speculative markets go up quickly and come down quickly. Pretty simple. No complex explanations needed.
Oh yeah, if I hear the word LIQUIDITY one more time from some fucking quack who doesn't know shit, i'm going to scream. People are tossing around this word and they don't have a clue what it means. Engage in a little original thought instead of just repeating what the last guy said.
if fed fails to raise rates, market forces themselves will raise rates.
Gold when you think about it is extremely useless, I have some gold bullion, all it does is gather dust. There is no utility to it. Atleast paper money is easily convertible and can be exchanged for goods and services.
We had a winter storm a few months back, and the region lost power. ATM's were down, the most useful thing was cash. Credit cards didnt even work.
Gold when you think about it is extremely useless, I have some gold bullion, all it does is gather dust. There is no utility to it. Atleast paper money is easily convertible and can be exchanged for goods and services.
We had a winter storm a few months back, and the region lost power. ATM's were down, the most useful thing was cash. Credit cards didnt even work.
For Black Week, I'd just like to say that I greatly admire Rosa Parks, although her contribution was later outshone by Nipsey Russell.
IMO the recent politicalization by the left of global Central Bank activity is macro bearish for credit markets and thus stocks but bullish for gold.
I got PASTED during Bernanke's testimony on Capital Hill. Silly me for thinking the formally cynical Treasury market would rebel at a less than hawkish message from the Chairman. And then there's the BOJ having to labor getting rates up to a whopping half a percent. Gee, the death of carry, lol.
I presume the future is stagflation. Talk about do. Back in the 70's rates took longer to react than stocks. Let's face it, when stocks are breaking investors will certainly choose a crappy fixed ROR before opting for a negative return.
As far as liquidity. It abounds. When you have a 4.75 long Bond, a 1.70 JGB with $650 gold, $60 oil, $4 Corn and a 1380 SPX somebody's spending somebody elses money.....
I got PASTED during Bernanke's testimony on Capital Hill. Silly me for thinking the formally cynical Treasury market would rebel at a less than hawkish message from the Chairman. And then there's the BOJ having to labor getting rates up to a whopping half a percent. Gee, the death of carry, lol.
I presume the future is stagflation. Talk about do. Back in the 70's rates took longer to react than stocks. Let's face it, when stocks are breaking investors will certainly choose a crappy fixed ROR before opting for a negative return.
As far as liquidity. It abounds. When you have a 4.75 long Bond, a 1.70 JGB with $650 gold, $60 oil, $4 Corn and a 1380 SPX somebody's spending somebody elses money.....
Ben just came out with a very hawkish inflation statement. He said the fed is very concerned with inflation. Check Bloomberg.
The guy is an asshole. Sorry, but there are no two ways about it.
He goes and babbles about receding inflation concerns on Wednesday, rallies the market, then states this.
uncle ben's hands are tied.. so the game plan is confusion... raise rates - make matters worse. cut rates and the dollar index is going to break 80 which could be realy ugly. the point nobody is talking about is that nobody is buyinb u.s. treasuries. i see this as a problem greater than any being discussed in popular media ie - chinas stock market? i forsee rates having to go up (which will be marketed as an inflationary curb) to attract investment... cant print every dollar..
i dont see a way out. i still like prospects for gold and this panic/pain in the market over past week didnt cause any flight to the dollar as we have seen in the past which is bullish for gold imo.
i dont see a way out. i still like prospects for gold and this panic/pain in the market over past week didnt cause any flight to the dollar as we have seen in the past which is bullish for gold imo.
Bernanke's thesis from MIT
http://dspace.mit.edu/bitstream/1721.1/29839/1/05915220.pdf
http://www.post-gazette.com/pg/05341/618606.stm
his grandmother and the Great Depression.
http://dspace.mit.edu/bitstream/1721.1/29839/1/05915220.pdf
http://www.post-gazette.com/pg/05341/618606.stm
his grandmother and the Great Depression.