Dr. Copper has a PhD in economics. It is telling that there is a global slowdown, with China leading the way. The real estate bubble in china is bursting. It was a giant bubble. The repercussions should last for the next several months as market participants start getting nervous about China.
The Shanghai Composite is in the middle of vicious bear market. This is a hard landing. There is high inflation, artificially low interest rates, combined with a real estate bubble popping. Absolute the worst of all worlds over there. And it is not priced in. Whatever goes on in Europe will not surprise the market. But a hard landing in China will.
Looking for more weakness this week as Europe bumbles along and the hard realities in China become more recognized.
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Q3 earnings will be bad. Estimates have not come down enough.
It is the guidance that will count and that will a lot depend on how stong the $ gets.
Market Owl, there's been lot of talk that we go higher this week because fund managers must rebalance. Plus it's quarter end. We're already up 70 points since Friday low. What's your thoughts on rest of week? Thanks.
this has nothing to do with rebalancing. it's a classic short squeeze. fund long equity exposure is at 3 year lows sentiment was primed for a squeeze, we are merely congesting before we fall. the range has just gotten wider that's all. funds aren't buying when they don't have cash. redemptions at 3 year highs.
Fund managers aren't total idiots. The fund managers can rebalance every month, what limits them to a particular quarter? And also, what limits them to trade only at the end of months or beginning of months? There has been no hard statistics on what they do, just speculation.
I think we go lower from these levels by the end of the week, but it could be early next week. Harder to time tops than bottoms.
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