January 13th - First Covid case outside China in Thailand. It took almost 2 months for the Health organization to declare it a pandemic. It took a week after that to start the slide. That's over 2 months from time it was known to the world.
SVB run on March 10th. This should NOT be much longer than the Pandemic timeline. May 10th on we should start the big slide IMO. In between we have quarterly earnings and Regional banks start on April 14 thru 20th with the biggest UBS bank delaying till the 25th. Maybe a FIVE DAY DELAY after their announcement like the Pandemic? May 2nd on?
Marjorie Taylor Green and George Santos two peas in a pod at NY courthouse with a whopping 300 demonstrators. Trumps first of many indictments. This as Trump widens lead for presidential race. I suppose if he isn't already in jail he would be having REPUKS rally for his cause. The cause is dictatorial control and abolishing all collective equal rights gains since the 30's. Lock all of "them" up! What a world. The stock market is also in extrema denial hoping against hope that the banking crisis resolved before it got started, one trillion taken from tax payers to shore up the elites minor mistake, and no recession and no inflation. They demand disinflation because it worked so well for them.
Everyone giddy that this market is surely on a long bull path despite so many obstacles in the way. heck the die hard GOP curses the name TRUMP in private but gets out the cheerleading pompoms when in public. The already exposed political characters just pretend they were never caught being a two faces opportunist because the people also pretend they are genuine because BOTH seem to benefit form this charade.
End of week FIVE is April 14th. Five weeks for run on SVB. Same amount of time the Pandemic took to see a drop. Apropos is the start of Regional Bank earnings announcements from the 14th thru the 20th. USB, the biggest regional has already delayed their release till the 25th. Never happened before. End of April should bring in a really bad MAY! Just a guess but based on events unfolding a good bet.
A joke right. I pay myself. I analyze and bet on my own assessment. I still can't get over the fact that for weeks i lost money on a PANDEMIC. I kept at it and made a lot of money but it proved one thing for sure, the street is as stupid and delusional as the average investor. Lets recap shall we: had a Pandemic 100 years ago and the stock market charts were there for all to see. We knew the where, WHEN, and how. FIVE WEEKS and everyone was BULLISH!
So I can see where we are headed and I called the financial debacle not 2 weeks before the SVB run. Disinflation for 40 years and we are addicted to it. We can't go thru withdrawal since it is likely to kill us. I also called the transitory a joke. now we have CHINA and I would be very surprised if they alone don't spike inflation up and soon.
As for the banking crises, what crisis. Only over a trillion dollars and we flip the bill. You see it is IMPOSSIBLE not to see the next crash coming. Like being shocked over a pandemic causing damage after we assessed it was just fine.
I am talking a generational drop. One that should be as deep or not deeper than the Great Depression and last as long if not longer.
BTW the BANKS Q! report starting the 14th of this month. the regional banks and they are in deep trouble. Watch USB which already announced delay of a week. I guess this pandemic came and went without a scratch. Like Trumps innocence. We see what we want and discard the rest. Most popular Repuk by far and the Grand Jury in Georgia stated it is MASSIVE and another juror stated If the rest of the world saw what we did there would be no conflict. Neive right.
Who's paying you to post? I'm curious.
** Future Path, and focused obsessive need to return back to disinflation **
As long as inflation pressure eases the sky is the limit. Manufacturing has been a weak component for us but frankly it isn't much of our economy.
No one accepts this bullish move but i am the first to state that if inflation and rates drop from here we are back in the old 40 year pattern. It is obvious that only disinflation would allow for the party to continue. I personally think China will be a party crasher. There is no indication our jobs market is weakening.
The market is obsessed with only one thing, lowering inflation. The rally off an historic bank crisis is proof of that. Street is convinced the banking problem did for the economy what the FED has been trying to do to lower inflation. The move was unanimous, no ambiguity there. The stock market is unified on this one theme. that makes it easier to determine the future path. I am looking closely at CHINA. It is obvious that China has for some time now switched from a exporting country to building up internally. Their aggressive nature in stealing innovation from other nations has taken its toll. I suspect they already anticipated this. They are at the point where we were POST industrial revolution. They will grow internally as they look for cheaper labor overseas to manufacture.
Watch the analysts scratch their heads as more data from China indicate a much stringer recovery. China government has total control of their direction. I suspect they put out a weak GDP growth forecast on purpose.
My themes were Pandemic is coming to Inflation is coming to China is coming. They (China) alone have the ability to squash any hopes for disinflation to continue. I was right on the first two themes and now it is crystal clear our economy can not survive in an inflationary environment. WE thrive on debt, easy money, blowing up all asset valuations due to a constant drop in rates and reduced borrowing costs. We are the 40 year addict that can't break the habit.
10 year note: By end of April we should see 4.2%. Dollar should rise to 106 plus. Talk of disinflation to a whisper. Quarterly earnings lowered and projections also lowered. Stock market perhaps as high as 4250 on SPX. Assumption of zero rate hike split down the middle.
Political front: Georgia indictment should be announced. Increased rhetoric by the GOP and FOX to the point of multiple demonstrations leading into violence. The desperation by Trump will assure he caused more deaths this time around than January 6th event. I suspect a gag order will be placed on TRUMP on charges of inciting violence. he will violate that order. Bank crisis creeps back into the news worldwide.
Seems only tangible evidence of a dire future will cause the stock market to start to crumble. I DO NOT know what or when that happens. Historians will have a field day trying to convince the future public it actually happened. We are in the most insane numbed immoral corrupt period of our democratic existence as the forces of dictatorial control gain traction and win elections! When the next depression hits there will be a huge backlash against the weakest groups and laws and rules will be so draconian it would be unrecognizable we ever were part of the 250 year experiment.
These are NOT speculation but obvious paths based on the last 8 years of economic and political movements.
Trump and his lawyers have managed to delay the arraignment for 5 days and in that time is attacking the prosecution with everything they have. The GOP in all political circles is condemning the action. Congressman are inciting violence and promoting demonstrations. DeSantis a man that hates Trump is pretending to declare he will not honor any extradition from his state. On and on the circus is coming to your town. But make no mistake for they know what they are doing and it is hoping for violence turning toward death. They remember well January 6th and their own insignificant lives that were at stake. if you think this is going too far wait till actual violence and death take place.
At the same time we learned that all analysts following SVB just 48 hours before the run on the bank were enthusiastically about owning the stock.
Wait till Georgia with the MASSIVE amounts of evidence and crimes gets to indict Trump. NY is the smaller test run.
The ability for everyone to remain in a state of denial, actually running head long into the maelstrom makes it next to impossible to determine what and when the crash will occur. What I have learned so far is that all catastrophes will only happen AFTER THE FACT. What constitutes after the fact on realization that the stock market valuation is drastically going to be cut???? End of April with earnings season? Multiple months showing inflation not going away and actually rising again?
The market has ignored any and all results that it does not want to hear and focuses only on the favorable slant. The NY indictment on Hush money is a prelude to the Georgia indictment. As one juror stated It is going to be MASSIVE. We are in the trail run and depending on how the public reacts the odds favor an already disbanded Grand Jury in Georgia to see the DA indict trump within weeks from now.
I suspect like everything else the Stock Market hears it will just ignore it completely. Even though the Georgia indictments will be MASSIVE with so many charges all of which will result in a multi-year jail time. The evidence is so clear cut and MASSIVE the odds of Trump seeing the light of day after convicted will be slim to none.
Both the Georgia and Mar-a-Lago case will absolutely put Trump away for the rest of his life. Then we have the biggest case of them all, January 6th.
And YET the GOP and their voters are enthusiastically planning for him to be their candidate. Like the Stock market the ability to drown out reality is simply astonishing.
Investing.com-- Chinese manufacturing activity slowed slightly less than expected in March, data showed on Friday, amid some resilience in local demand and continued momentum from the lifting of anti-COVID measures earlier this year.
But service sector activity blew past estimates to reach its highest level in nearly 12 years, as the sector continued to benefit from pent-up demand and government measures to increase domestic spending. This also helped overall business activity expand during the month, keeping up the momentum from a post-COVID boom.
Here we go..... MY PREDICTION and NO ONE ELSE saw it coming? Duh. A 2 year lockdown and no one saw INFALTION PRESSURES BUILD in CHINA! Commodities will spike and so too will inflation here. It has no involvement with our banking mess. NONE!
MY second wild assumption came true. First was a financial debacle from mindset of 40 years of disinflation. my LAST ONE calls for inflation to stay a BIG problem and this market can not survive in an inflation environment for much longer.
Trump indicted on a case that his own Federal Justice Department convicted his personal lawyer of. Sweet justice indeed.
Now the fun begins. Will TRUMP go against his lawyer advice and call for violence. Will they add more charges because of that. When will the Georgia case be announced and indictment pending. When will the secret document case be announced.
This happened after the biggest bank run in 100 years, the GOP turned gestapo, The STupreme Court pass ruling that were clearly not based on law. What a crazy scary world.
Fed governor reiterated TODAY that more rate hikes are needed and 25 basis points seems a done deal. Not according to the street however.
Will the FED raise when the street is adamant not to. We already have a 60% assumption of zero rate hikes. What does the FED see that the street refuses to.
Let the data do the talking.
I have absolute confidence every investor and brokerage firm is happy as crap that a banking crisis will force inflation down and then we can get back to driving rates back to ZERO! The market is down right giddy about it because it feared more rate hikes and was about to throw in the white towel till the timely crisis happened.
Like the Pandemic, common sense, reality and half asses analysis on what happened previously went out the window and only happy thoughts were allowed to seep in. Imagine telling yourself that a deadly virus with nom means to stop it, like 100 years ago, was completely ignored by everyone. i saw no article, no predictions of dire results. What i did see is how a human mind can make death seem pleasurable. The excuses for 5 weeks why the market was flat to up was simply astonishing.
We don't have death and destruction to watch for so what will be the mass awaking to create that panic moment? Most probably something to do with INFLATION and more banking debacles. For this reason i think we go higher longer than the Pandemic hiatus. HELP! need some suggestions what and when the panic will set in.
*** My Crystal ball Prediction on how the next crash occurs ***
The ONLY two thing i see as a wild card to stop the last rally from taking flight is, one another disturbing banking problem that is in the billions, and two a negative response to trumps next indictment. The news is already expected but will trump go all out and explicitly declare war? Will people follow? Seems logical that both these can happen any day or not at all.
Seems this move today will stick by end of day setting up for more calming moves higher and a market willing and able to forget all the problems left behind. I also expect all the lower prices as a result of the banking crisis to start to rev up. Each and every one. OIL, Dollar, Yields.
If the current banking debacle wasn't orchestrated it sure was timely. How else could Wall Street accept lower rates given the inflation data? A perfect scenario almost as if the FED "knew" about the problem and purposely decided to let it implode. the fastest easiest way to tighten economic conditions without squeezing the consumer with higher rates. No matter if my paranoia made this up or part of it was true the end result is a delay and even higher stronger more tightly wound buildup for the next crash. The NEXT drop will be with everyone aboard. It will guarantee no orderly controlled drop but rather a cascading one like water approaching a waterfall and gaining momentum fast as it plunges' down the ravine.
THIS SCENAIO IS ONE I HAVE BEEN WAITING TO DEFINE. It will take no more than FOUR trading days to plunge 20 percent.
When the Stock Market rises immediately after a Trillion Dollar debacle and justifies it as a net positive alarm bells should be going off in all investors head. instead they quickly dismiss the nagging concern and accept the optimistic version. Bitcoin which relies on a weak dollar and calamity did take advantage with an upward thrust. it also continued that thrust AFTER Wall Street determined it was also good for stocks.
This would be the first time in History the Largest Banking Debacle resulted in a yawn. Just using the known banks that are in trouble or folded it will be the Largest ever. The largest bailout and the ONLY way the stock market could continue higher. Perverse logic but true. Disinflation seems a distant memory that Wall Street and economists love to bring back to life. The strange logic is that the FED was helpless to stop inflation without raising rates much higher. The Banks did it for him without raising rates AND with a likely drop in rates as well.
A WIN WIN!
If YOU want to know the fate of the stock market and our economy look no further than the popularity of TRUMP!
After 4 years in office, 2 impeachments, hundreds of embarrassing moments of extortion, treasonous behavior, immoral and corrupt actions and intent and now 4 slam dunk investigations that will resolve in indictments the PEOPLE are as STRONGLY united to his Presidential bid as they ever was. if anything they are even MORE determined. While these large number of loyalist ignore or cheer Trumps implosion on DeSantis and physical threats to the NY DA and put out a rumor that the DA was being charged himself with some mysterious crime we have Peck, the National Inquirer owner that is giving testimony TODAY to the NY Grand Jury. And yet they all see TRUMP as the victim. Like Al Capone?
As irrational and extreme as this is in our political world the economic world is just as crazy. Trump should be hung by his BALLS for what he has already done to this nation. Instead we would KILL for him! The market cheers trillions of speculative bank money, Mr. and Ms.Q Publics money, vanishing overnight from the elites hubris and knowledge that they can do no wrong. Just Like TRUMP! Trillions bet and lost and the FED and world government bail out so fast that we don't even know the extent of the damage yet. no matter
For YEARS I was called EMOTIONAL and extreme on my pessimism with no validity to it. Even today not only is my notion of DOOM and GLOOM nonsense this debacle has actually made the stock market more profitable and secure.
Like a fanatical religious leader. We must prey and great things will come of it. no longer do we have to be moral, or prove our worth with good deeds. just wish it away and rely on GOD the all encompassing savior.
Seems this time around this Pandemic has some powerful attributes to keep the market happy. The crisis results in weeks of upside since it's first announcement. Lowered the competition, dollar, bond yields, showed no matter how much greed and defaults the consumer is covered. There no longer is any consequences to speculative gambling of your money. The number of debacles over the last 40 years is unprecedented and so too is the ability of governments to cover them up as if it never happened. Even a natural disaster like the pandemic has been a boon to so many.
We truly do live in a new paradigm. AT least for now.
It looks like BITCOIN is consolidating here and might go higher. That should set the stage for the SPX to also go higher. No sign of cracks in Crypto here. I can assume once again both indices run up together.
Hope truly does spring eternal. I hope we have a calm but steady upside move to make it easy to forget about any crisis or inflation problems. The longer we hold up here the more dramatic the next drop will be. Also the shorter the window to find a bottom. Assuming there is another drop.
Everyone in agreement that a recession is likely and consumer contraction causing inflation to recede. They use the crisis as the main reason for the final push. Today 72% of analysts believe the FED halt rate hikes in MAY. I am not sure nor convinced any consumer weakness will translate into lower inflation. In any event how does this market reconcile where it is based on projections. based on assumed economic path.
The notion that we can still have a decent 2023 is fading fast. Now the question remains just how bad?
I am fascinated how human intelligence gets so easily withdrawn when emotional bias takes over. The Pandemic, the same people that gave such illogical explanations why to ignore it are once again being told to ignore this crisis and any implication going forward. And they have the EXACT same Audience. Seems no one cares how good or bad you are in your assessment as long as you CONTINUE to give them what they want to hear.
Imagine following someone's advice on the Pandemic and either losing a lot of money or never taking advantage of such a drop and NOW well they forgive and forget. they do more than that, they follow the same person again and again. When confronted with these glaring discrepancies there is total silence and internal justification. They go so far as to BAN me because i insist on an answer.
I was just told that the FED has taken over all bad loans and bank investments and will somehow someway recoup that in a later date. I read One trillion of troubled investments was due this year and next. ONE TRILLION! That is just here in the USA. So it stands to reason the street should take a sigh of relief that it no longer matters if rates and inflation is still too high. But they do and this notion that our all encompassing savior will prevent all bad bets, all greed, all hubris from being a future problem is so ridiculous. how so? Well just look at the last 4 decades of outrageous speculative gambles with NO consequence and tell me this one is any different? The pattern is the same, FED to the rescue. The problem is that NOW we have a thing called INFLATION that we never had before. NOW the FED has to IGNORE inflation in order to bail the world out once again with get this ZERO consequences? What a world. Time to hit the casinos.
"We do expect the Fed to go on hold post this week’s 25 basis point hike & expect inflation to decline markedly in the next few months...given easy year-on-year comps while falling shelter prices should sustain declining inflation in the second half of the year," Jay Pelosky, TPW Advisory Founder and Principal said in a note.
I guess they think that banks on a tightening mission will immediately cool the consumers appetite for "things"? We are about to find out.
Death and Destruction - Trump actually used an image of him with a baseball bat along side the Black DA (animal and gestapo). But hey, this is as acceptable as a market about to fall apart because the FED dared to attempt to reign in the START of inflation. The President of USA is demanding violence and rioting to protect his kingdom. No amount of BS and deflection can come close to the most abhorrent 3rd world inhuman disgrace we live thru today. Accepting his dictatorial powers even with the whole GOP behind him. This is NO LONGER AMERICA and if you dare to challenge this statement be ready for a barrage of illegal, radical law and rules that put us back before the turn of this century.
TRUMP has let out a barrage of attacks using racist and playing the victim demanding violence's in the name of justice. This is the new normal that everyone accepts and even rallies for. The GOP is now an extension of Trump and sits by ready to defend him with all means possible even breaking the law. Just like the addiction on disinflation and bailouts we now see everything as just normal business as usual. II took the Germans 12 years to get used to watching Jews being treated as vermin. It became NORMAL.
Just as the banking crisis is a symptom of our economy and warped addiction for ever lower rates the political arena is even more stark and frightening.
BOTH are about to play out as close to each other as never before. An apex, a trigger is about to test whether we spike even higher and quicker to an ending scenario or it stays simmering. With TRUMP and his 4 pending indictments the first one will trigger if we spike higher or simmer. Inflation and external Banking events will also determine if a Trigger is about to spike higher or simmer for longer.
I am amazed how these seemingly unrelated events always seem to converge at generation moment like this. I am convinced NOTHING said, done, or promised will change the set course. I am equally sure my very long standing notion that a super mega bear cycle is upon us. It makes no sense to conclude otherwise. Like expecting to see the river we row on end in rapids and a waterfall and now that the rapids are here ever increasing in intensity to suddenly change your assumptions all along. IT MAKES NO SENSE!
2023 will see such a drop that the latter half of the year should be all down on a weekly and monthly basis. 40 to 50% drop from it's highs seems about right.
MAYDAY MAYDAY - possible distress signal May 3rd. All things are converging exactly on schedule, 2023!
the sobering reality that 40 years of disinflation and government bailouts with free money has created a society built on greed, complacency and hubris.
Catch-22 a likely scenario for the FED Funds decision going forward. Inflation is not a banking problem, not a Federal Funds rate problem. It has it's own supply/demand dynamics. if we don't see a shift in inflation in next 5 weeks the FED will become a useless entity. Prices eventually revert to the economic condition not the temporary fears and Fed Funds mistakes. They can cut tomorrow and a crash will soon result regardless. WHY? because to fuel inflation will KILL this addicted economy on disinflation.
Trump has also been leading up to a final solution with multiple indictment imminent. Rape case, Hush money, secret documents withheld, January 6th, Georgia extortion. His ability to incite riots will also increase as he is cornered. His followers will blindly obey like fevered religions fanatics. Next week will be the first test of his ability to cause violence on the streets when he demands loyalist to attack the police and prosecutors. IF he fails to incite riots than we have till May 3rd as the earlies date for everything to fall apart.
I am fascinated with all the correct long term reversals I voiced. ALL of them resulted in anger. None of them, even cumulative after many correct calls, they still get ANGRY with me. In my world if i can find a system or institution or individual that can correctly call major reversals I would thank them and keep quiet on the rest. On my betting well that's another matter. it SUCKS! I can't distinguish between knowing with certainty something is going to happen and timing that call. I can't find anything that lets me know the mass market is signaling a major turn.
I am trying to discover the mechanism where irrational behavior by the masses gets switched around. My ultimate one is 2023 outcome. Trumps all others in startling dramatic deep move. I am excited NOW because i can see the path and the reasons why it will occur THIS YEAR!
When i point out my reasoning and it actually comes true i get yelled out to SHUT UP! Is that a common sense rational response? perhaps it is but not in my small universe. Like constantly having to point out the horrendous disgusting corrupt nature of one man and no matter how strong the facts, how many there are to reinforce the facts we humans can shut out common sense, analytical thinking, all because we refuse to admit our own selfish reasons for believing in the first place. We as a species would rather perish than be forced to accept truths. I guess that's why we are such a violent species. I await multiple trials and convictions (possibly) before the next election as Trump is the preeminent leader of his party. like Hitler being exposed for exterminating millions and wins the next election.
FED did exactly as i suggested. We should see 5 more weeks of this rally. how high? No idea. DOW needs to desperately LEAD the move and attempt to reach the 11/28 highs. Housing data for February should continue to come in hotter than expected and be ignored!
Nice steady, normal, bull run till May. Hopefully.
03/22/2024 – A date that will encapsulate the start of the end of a generational period of prosperity. We have a speech by the FED threading the needle on giving all what they want to hear even if they are opposing views. A transitory inflation with minimal consequences such as billions of loses worldwide, run on banks, defaults and government takeovers. A stock market that finds excuses to stay in a Bullish Stance. A Fed Funds rate of 4.6% that historically would be laughed at for causing any problems. A political circus just as entertaining and matches the corruption greed and destruction of our Republic. A government so desperate to calm the public is willing to guarantee all bad behavior at all costs, as they cover all banks with unlimited insurance for unlimited failures. Then we have civil case against Trump on rape where the judge granted trail with past performances and witnesses from the infamous Pussy Magnet tape to a dozen woman testifying to their own attempted rape by trump. As the NY prosecutors will indict Trump for his Porn Star payments to cover up his leaked affair. As Georgia Grand Jury about to call for an indictment over trumps extortion attempts with THREE recorded telephone conversations with THREE different government officials demanding they throw the election. Let’s not forget the biggest treasonous behavior and indictments also in the wings. January 6th hang Pence and lying over hiding secret documents on is possession.
If TRUMP today is by far the leader of the party and most popular presidential candidate with all the PROVEN corrupt behavior easily winnable in a court of law YOU can see why I am a bit skeptical that the Wall Street behavior is just as suspect. In fact the bizarre irrational behavior over the political situation matches exactly the state of our economic strength. All bluster with no substance. So much so that a Satire like Being There, Dr. Strangelove is being played out in real time but the audience is gullibly accepting it as fact. Wall Street which already lowered forecast for earnings before the banking crisis is downright giddy for their prospects of higher earnings. WHY? Because really bad news means the FED will forget about inflation and save the world from its own hand build monster. The elephant will be ignored as we hire more dung scoopers.
I can present just facts in the most mechanical financially boring manner with the same conclusion. We are in deep shit! If in the next 2 weeks we don’t swoon from the banking crisis and its implied conclusions we have managed to once again ignore a Pandemic. This behavior is so startlingly shocking that not a single analyst or TV personality sees it. Like a Pandemic. No one talked about the obvious destruction.
I look at the charts, see the irrational spike in all things both traditional and speculative and the ability to spin a very negative economic crisis into a bonus. We are so so so close to a major dramatic drop. I can see and accept a timeline that has another full month to go but what I can't do is see a continued rally. I suspect we have many drops and reversals to keep crawling back to the 3900 area in SPX. I DO NOT see 4200 ever again.
In fact the underlying structure is so fractured it is only a matter of timing the drop and collapse.
As a very analytical person that developed compute systems the foundation of this current move is as insane as driving higher during a Pandemic.
We are finding reasons to rally and they are just silly. Because of a banking crisis it relieves the world of higher rates? Relieves the stress on banking? no. Relieves the inflation pressure? no Changes the earnings path for a more favorable outcome? no. What it does do is reward bad behavior and ensure our underlying problem gets much worse.
The NO CONSEQUECE era. That little theory about to be tested soon.
As expected home sales reversing up again much higher than anticipated. Inflation hasn't even seen it's peak yet. We demand the FED make everyone whole again. bad speculative mistakes are now the fault of the FED for not doing everything they can to appease Wall Street. Largest bank crisis ever has come and gone like a tornado without leaving any devastation in its wake.
The inflation data is going to be so stark that the FED will wake up to a massive problem and most likely refuse to do anything about it for fear of the Stock markets wrath. But the market itself will crash despite the FEDs inaction or perhaps because of it. You see no matter how symbiotic the relationship is reality will step in and Punish all. Earnings productivity and JOBS will soo take a nasty turn for the worse. Perhaps no more than 2 months should do it.
Short sighted investors. I suspect when it starts collapsing it will keep collapsing. Seems only the actual devastation itself has to be already here for the market to respond.
The frustration i currently have is similar to the start of a Pandemic. I looked at all angles, all charts, all historical data and concluded the market behavior is INSANE! here we have a very similar market behavior against the worlds biggest banking debacle at relatively tame inflation. While the Pandemic had a direct path and timeline to prove its destruction this one does not. What will make the street realize just how bad things are and just how impossible it is for the FED to correct it? The calm slow moving market reminds me of the good old day of boring undramatic external news. the same old! Well if this is the same old i do not what to see what will actually shake this market up.
As expected this move Monday is boring and up with no sense of struggle. We have absorbed in record time a banking debacle as if the problem has been solved before it even started. Everyone waiting for the savior to wave his arms and bless this nation with good fortune. We repeat the insane responses and then shake our heads when a crash happens seemingly from nowhere.
I have gone over the possible scenarios for the immediate future and every one except one is diasterous. ONLY an immediate continued signal that inflation has stalled and is reversing could possibly save this market. BUT it not only has to show this but it has to do so very soon, within the next few weeks.
The biggest bank crisis perhaps ever as it spreads worldwide and just as fast the solutions. No longer is there anything too big or devastating that the world markets will get upset about. Just the fact that we are shrugging this off (for now) is as logical as dancing in the radiation aftermath of a nuclear explosion. I know how this will turn out. What i do not know is just how foolish and naïve investors have become. When will the aftermath of this tsunami be felt? In the past something like this spread of banking contagion would have devastating affects immediately. Now in an age of so many irrational, horrendous behavior there seems to be a national numbness with a past conditioning that all things are acceptable and solvable in an instant.
Like a pandemic and the known affects and consequences i scream, pound the table, shout like a crazy person absolutely sure what will come to pass. I mean not a doubt in my mind. And crisis after crisis the world relies on a savior with complete confidence till the fear and doubt materialize into devastation. So today i try to TIME the moment when that comes. What will be the EVENT, the process to get us there.
I am amazed that Sunday Night the powers that be can actually form a positive market response. I would have expected a bad one turning into a rout by the end of Monday. Regardless on how we actually start the day just by having such a calm market over the weekend amazes me.
SVB bank in UK gave millions in bonuses the day of default. Trump will be indicted on Tuesday with ONE of FOUR likely indictments. Trump reinstated this week on Facebook and YouTube (coincidence?). Trump declared war on law enforcement and will rev up the explicit demands. FED Rate Hike expected to be either 25 or zero.
Easy Money is GONE GOODBYE!
Powell in a catch-22. Stock market is currently where it was 2 weeks AFTER the announcement of a Pandemic in China! All is good.
Frankly today you would have to be a blithering idiot or a fanatical believer to even conceive of a flat stock market this year. A higher market is so beyond the imagination of even the die hard zombie's all they can do is pretend it will be a flat year. Me, I'll stick with my repetitive year long announcement, 40 to 50% haircut in 2023.
WE should have the next TWO DAYS decidedly down but like the start of a Pandemic who knows for sure. Powell to the rescue? maybe for a short time.
Everything is coming together and FAST! I find it fascination how random but horrific events come to a head all at once. From an imploding Wall Street to and Imploding political system. Trump about to be indicted on Stormy Daniels charges, then Georgia extortion and finally the stashing of secret documents. the really big one, January 6th will be the last to show its hand.
How Fast? next week is likely number one and I suspect number two is only a week or so after.
Stock market in same final stages IMO.
I can easily state that this current market is NOT the start of a Bull Cycle. In fact we should start the next cycle DOWN within weeks.
The greed and easy money on Wall Street has allowed the very wealthy CEO's to gamble like they are hedge funds. we are talking Banks. Now try t wrap your head on the following, any inflation data that proves stubbornly high from here on out will have to be ignored or face an immediate backlash from the Bank problems. The long term one if they do nothing is worse but taking your medicine now as opposed to later is usually a latter result.
Bank contagion hitting the world. Strange how all these institutions with billions of dollars were under the radar till one bank in California set off the alarm. Combine that with a plunge in PPI and drop in Retail Sales. Now it seems unlikely the FED raises rates at all. Is this the start of the crash?
Can't factor in external news into a chart pattern. Like ignoring a Pandemic because it wasn't seen in the charts. How long will this problem be on Wall Streets mind?
MOODYS to the rescue! Like having Fire Trucks come after the house is burnt down. Useless. But the street will quickly get over this as they did the Pandemic. Woops i guess that one bit them in the ass. Oh well, moving on.
How i see the rest of week. best guess is a not too complimentary reading on the PPI and inline weakness in retail sales. Should either eek out a gain or start a slide but also not too deep. After all the PPT needs to hold out till the rescue by the FEDS with a 25 basis point move. There is a possibility we get the final leg down to 3700 area but i still gve that small odds.
this market move is determined to show we are still in the BULL Trend and in order to do so can not drop to or below the recent lows. I am hoping for more drama to pick my moments for a huge rally, for one is coming. Pent up demand for a long time. need a good excuse. ONLY see the 22nd for now as a possible target date.
Market now has a nice cushion if the PPI comes in HOT. I suspect it will and give up gains made today and then some BUT not a rout. Bigger question mark is how much did the consumer spend last month? That for me might be the more important question since we need the consumer to continue to spend without going into a recession. Spending beyond means is OK with Wall Street. I still believe we play out this drop like the lat, front end was fast and steep, back end filling in the bottom process.
A long shot would be a dramatic drop between here and the 22nd. See little upside extending this move out unless the PPI is really very weak.
*** Just noticed another possible immediate pattern and path. Had a 5 day slide followed by a 1 day rally (today). if that holds we could drop another 5 days and end up at the lows on 3/21. Now even if we do drop till then not sure how steep. could duplicate the 200 SPX slide in next 5 days or have a more orderly slip/slide till 3/21. ***
I am leaning towards a milder drop from here. BUT here is the really reverse strangeness of this market behavior. Greed last longer and is always stronger than fear until despair kicks in. Markets generally want to rally. IF we do the worse case scenario and drop another 200 SPX points there should be an even bigger dead cat bounce assuming the FED only raises by 25 points. That rally from say 3700 could go to 4100 in a heart beat!
Keeping this in mind for end of day today and start of trading tomorrow.
Current excuse for a rally is based on the premise things are so bad the FED has to wait to do anything about inflation. Now that's a sustaining reason for a long and strong bull market? Out of this dilemma there is only two possibilities going forward. One, the actual environment will draw down inflation and the need for further rate hikes becomes moot. Two, inflation will persist and the FED will eventually have to deal with it in earnest.
Using these two premises and marrying it with todays environment TWO is the preemptive winner. Now add the fact that things are already bad as the result of Fed Rate Hikes. We already have a run on Banks and fear of higher rates and deeper problems.
Using all these factors and an already high Market multiple would you accept a long term bullish cycle to start here? I know this is subjective and there are other factors at play but overall the general sense of where we are is correct.
Would YOU fade any rally here?
BTW BITCOIN on F-I-R-E! approaching what i consider the absolute top of possible tops, 27K. it is rallying BECAUSE of the BANK run. Seems everyone finds ways to be optimistic even at completely opposite views at the same time. it's called BIAS! We see what we want and discard the rest. bad news good for stocks and great for Bitcoin.
The current rally is based on the same premise that a Pandemic is known and the street has already determined it's affect will not be the same as the one 100 years ago. Most remained BULLISH! Now we have the Bank run and assumption that the FED would never raise rates in this environment. Forget the fact that INFLTION is alive and well. Forget that common sense should permanently be discarded. Imagine, as i have, that at todays fed fuds rate Banks are in trouble. Now add the fact that this process is like the roaring 20's where rules were discarded for greed. Lets add the Crypto (Tulip Mania) phase where a billion dollar industry had no rules or regulations thanks to the greased palms of politicians. Using a home application to control billions of financial transactions with no oversight and easily pilfered money.
NOW we have a surge in this one days market move over a relief the CPI was inline with already high expectations for inflation. Common Sense would tell you if the FED actually adds only 25 basis point move it will solve everything and the BULL market will stay strong and long.
All I know is that the run of banks can have the same affect on the run in stock market and this time it is likely to be a blow off top! Human nature trumps reality at the most extreme situations. Pandemic? Who cares. Run on banks over small move in Fed Funds Rate? Just don't raise rates and everything is fine. I HOPE the irrational move is extreme for the next move will be a CRASH! An easy call in a very hard to call market.
Seems the PPT tried to make investors forget the longer term ramifications. Not working now.
How low today? We could be going into 3700 then 3500 for the final lows of this immediate cycle.
Today we hold firm or break completely.
One Bank, 16th largest, defaulted. They needed to raise enough cash to cover the big withdrawals by selling their BONDS that we already under water. Many start-up companies were their clients. Not since 2008, mortgage debacle have we seen this. I predicted this scenario weeks ago. Just the start as rates continue to rise and the disinflation generation will scratch their heads wondering what went wrong.
3850 was my support zone (if) we have any chance of reestablishing the Bull Cycle. if we don't find footing over next 5 days in the 3800 area the next phase of the drop is HERE! if we do find footing and on the 22nd the FED raises by ONLY 25 basis points a big fast but short rally should ensue.
regardless i do NOT see this as a bottom for the longer term bull move. Maybe 30% chance?