The pain is real now. The bulls are going for blood. The moves are getting insane, not just in the stock indices, but especially in individual stocks, the crappiest of the bunch, bankruptcies like HTZ, frauds like LK, and scammy pump and dumps like GNUS. The speculation is about as intense as I've seen since 2000. It must be all the newly minted daytraders who are unemployed and receiving all those unemployment checks.Since a lot of casinos are closed, the stock market has served as the biggest online casino ever created. And this casino actually has decent odds, compared to the real brick and mortar one.
The Fed has created another monster, and all it knows to do is just print and print some more. Powell is a coward, just like Bernanke. The whole institution of the Fed has abused their power to enrich their buddies and to keep pumping to keep the Ponzi scheme going. It is short term thinking that has pervaded all parts of the government, the White House, Congress, and the Fed. They see markets go up when they spend trillions of dollars and spew money everywhere, with very little inflation to show for it, and think that they're doing God's work.
The U.S. is on its way to becoming a giant banana republic. They massively outspent every other country during this coronavirus event as a percentage of GDP, and its not even close. A fair amount of this money is flowing into the stock market.
The speculation has been rampant, just like you saw earlier this year in stocks like TSLA and SPCE. Here is a chart of TSLA compared with the SPX. Obviously, TSLA's moves are huge compared to the SPX, but when TSLA went parabolic and topped out, the SPX soon followed to the downside.
The bullish enthusiasm is spreading to not only junky speculative names in the US, but also leading to some steep up moves in the beaten up European banks. The speculators are reaching out to the riskiest parts of the market to get more beta and hoping for greater fools to buy their shares higher.
The volume in Nasdaq stocks was through the roof yesterday, according to Stockcharts.com data. As you can see, usually the volume spikes are on down days, as volume was heavy in March. Volume spikes on flat to up days is unusual, and speaks to the amount of speculation going on, not liquidation, like it is on down days.
Along with the stocks surge this week, you had bonds get crushed. As I've mentioned before a few times, a weakening bond market is one of the first signs of a stock rally about to end. Along with the low put call ratios and rampant speculation, you are seeing an overall picture of a market that is in a topping phase. This week had all the hallmarks of a blowoff top. We just need to see the selling on the other side to confirm. It always looks scariest to short at the top.
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16 comments:
You should consider being a long trader from here on. Or at least employ it much more in your arsenal.
I think it's clear we are headed to 4000 spx and QQQ going to 300 next year.
Why do I say this? You learned to trade in the late 90s before they had the algorithms. When reversal trading worked really well.
Have you looked at a reddit board nowadays. Most traders nowadays are millenials. And this demographic looks to the stock market to finance a lot of their hopes and dreams. I believe they are much more actively involved in the stock market than our generation.
And there's way more of them then us. They don't know reversal trading as much as they follow trends and pile on. And there's so many of them that they are bidding up all the trash stocks.
I guarantee their trading style has influenced this market and will dominate the market in the years to come. I see so many people who see a stock up 100 200% and expect it to go up another 100 200%. Mind you many of this same generation are also running big institutional books as well.
Shorting is a dangerous game until the economy is flatly broken. It's clear to me that the central banks are all QEing together. If all the big CB's do this then there is no relative devaluation of currency. Things just get more expensive but there is more money. Stocks also get more expensive.
Shorting is going to be a loser's game. It's all about fiat money, instant gratification, and the excesses of human behavior just gets crazier and crazier.
Shorting based on economics, on fundamentals, although good for textbooks, will not be as realistic in this kind of world going forward.
On this dip, and I pray there will be at least a 5% pullback from here, you should buy and get long. BTFD rather than STFR. I missed out so much expecting a pullback and eroded my account shorting and reshorting.
So many small caps are still nowhere close to 50% of their highs. The money to be made going long will be far more plentiful than getting short. You should learn to change your mindset and adapt with the times and the traders that exist in this market.
Do it for your kids man. I guarantee you if you just went long on the next dip and just hold you will make way more money than trying to short every top.
This shit is really starting to worry me that these stocks have come up so much but aren't pulling back. I see relatively larger cap stocks like Avis that just went up 300% and it looks like they are just resting to go up more. This is insane man.
This squeeze is intense. After all of that rallying, another 2.5% up day like its nothing. What a bubble.
I think we gonna get sub 220 on QQQ by end of this month. There will be a mass exit. But when we get there im getting long iwm calls and i fully expect ath on iwm and spx to be breached before election. You should get long after this. You first got short at 2800. We at 3200 now. 400 points man. 400.
Mkt goes up when unemployment goes up because more people will then be making more money collecting unemployment than in their jobs. When unemployment goes down than mkt goes up because there is proof of an economic recovery. See what stimulus does. It kills bears dead. Lolπ
When are you gonna take your loss on the QQQ puts? If it keeps going up or mkt just stabilizes here, its going to zero.
Im in too deep now. Have to lay and pray. Darkest before dawn. I see at most 10000 on nasdaq 100. Another 2 percent. We will pull back not on fears of a weak economy but from profit taking now.
Were at the stage now as if the corona didnt happen. See how the media controls the perception of things. No more commercials about front line workers. No more we will make it through this. Its the summer of protest now and change. The rhetoric has changed. I think economic depression is out of the cards now.
Should get a technical pullback next week, the angle of ascent is too sharp, its going to back and fill the SPX 3050-3200 area. We probably chop between 3020 and 3200 for the next few weeks. This is a brutal market for faders, straight up the last 2 weeks.
Dont worry man over the weekend gs and big hedge fund names will all come out saying the market valuations arent justified. Fed is buying a lot of puts right now. We will get a crash this month.
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Easy come Easy go.
What's this guy saying over here? What's a hymen minsky? LOL
Something about a right shoulder? So he's saying the run up we're having right now off the March lows is the right shoulder?
No, he’s saying the next down leg will form the right shoulder of the Hymen Mynsky moment to be, and after a little consolidation, another big down move.
γ γ OL DAWG, Owl's translation is correct.
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μ΅μ’ μ μΌλ‘λ μ°λ¦¬κ° μκ³ μλ μΈμλ νμ€μΈκ³μ λμ κ°μΉκ° μ¬λΌμ§κ³ , κ·Έ κ²°μ μ μΈ μμΈμ μ μ©μ΄ λΆκ΄΄λκΈ° λλ¬Έμ λλ€.
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κ·Έκ²μ [μ£½μ Death] μ λλ€.
μ μ©μ΄λ , λμ΄λ ,κΈμ΅ μμ€ν μ΄λ λλ κ°μ, μΌλ¨ μ΄μμμ΄μΌ μλν©λλ€.
κ·Έλ°λ°, μ§κΈ μ€μ λ‘ μ¬λμ΄ μ£½κ³ μμ΅λλ€.
λͺ¨λ λΆμκ°λ€κ³Ό νΈλ μ΄λλ€μ μμ μ λͺ©μ¨μ΄ μ£½λλ€λ κ°μ μ μ ν νκ³ μμ§ μμμ± νΈλ μ΄λ©μ νκ³ μμ΄μ.
κ²°κ΅ μ£½μ΄μ κ³ κΈ°λ©μ΄λ¦¬κ° λλ΄μΌ μ μ μ 차리λ 건λ°,κ±°μ λλΆλΆμ μΈλ₯μκ² κ·Έλ¬ν κ΄μ μ λ리기μ μ΄λ―Έ λ¦μμ΅λλ€.
So comparing the market to 1930s and 1820ss. Something something about credit. But credit markets haven't factored in death. But people are dying right now? (coronavirus?)
I guess the right shoulder can be created later. So I'm guessing we're forming the head right now? If that's the case, definitely wouldn't want to be short right now.
I think I fucked up by shorting here. And I think too many people confused the V for a W. Plain and simple. Recovery is here. Revenue for many mid size companies were down about 20% for April but are already at even level to May of 2019 for 2020.
It was a major set up. A hoax. Using a severe flu that affects about 1% of all people who get it to actually show symptoms and become hospitalized. It was a con job orchestrated in large part by the media or at least very very good at spreading the panic. Even Floyd was found to have the coronavirus during the autopsy.
Trump bit the bait, and he countered with a huge ass stimulus. He used a nuke to fight a small battle that the media made out to be a war.
It was all bullshit. The drop was on a bullshit fabricated artificial self inflicted wound and now things are back but with a shot of heroin and pcp.
New highs in the SPX before the election. And don't even bother trying to time the next top. Not worth it.
You should stay with longs. Some traders are natural bulls and some are natural bears. You seem to be a natural bull. I started as a pure short seller so that’s where my roots are. So I don’t have conviction to ride bubbles.
What I am seeing is typical of investor behavior after a 11 year bull market, similar to what happened from 1990 to 2000. But this time, its not a dotcome tech bubble, but a central bank belief bubble. Will write a post on that sometime.
The zeitgeist for this bubble is the full faith and belief in the Fed put, and that central banks will prevent stocks from staying down. If they go down, they will always print more money and markets will always go higher. All dips are to be bought. BTFD. I am not drinking that kool aid, no matter how enticing it is to believe.
It was not the Fed that bought all those stocks from 2009 to 2020, it was corporations making huge profits. Those profits will be under attack as Democrats will in November and raise corporate taxes to pay for some of their increased spending, Less reliance on China trade will also hurt profits. Aging population and less immigration will reduce overall consumption, reducing profits.
And let’s remember that valuations are historically high, even without the coronavirus hit to earnings. Its a disaster waiting to happen again.
Since the rally has been so strong, its going to take a few months to change the trend back to down, but I expect a consolidation to lead to another big down move, not an up move.
So you expect that it could takes some times to change trend to going down?
Not upcoming weeks or in June as you said before?
I was talking about the big move lower, back down to SPX 2200. I still expect a down move to happen this month, probably starts next week and accelerates after June 19. Probably a little rally off the drop in June in July and then down big later this year.
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