Here are the charts to Prove it.
Just like with YELP, Just like with Oil, Just like with GTAT, KNDI, & PLUG I know I am right. This market is in the process of topping out and god dammit I'm going to be there to catch the drop. This 7 year Ponzi scheme is coming to an end and while most people are losing their ass in panic, I'll be profiting immensely from the collapse.
Here are the charts to Prove it.
Citadel can run their ramp algos to try to lift it on low volume all they want, at the end of the day: Nature Always Wins. This Bull Market is long in the tooth & it's going down soon!
Another Fed FOMC meet, another inaction. The federal reserve has now gone 54 consecutive meetings without raising interest rates. They keep jawboning, saying that they will raise rates at some indiscriminate point in the future but today the stock market did not believe them and rallied. If they keep crying wolf, soon their ability to manipulate markets with minced words will run out of juice. For the Federal Reserve, in regards to hiking rates, It's time to shit or get off the pot!
Why do we even care about rate hikes? Well, theoretically it has all sorts of implications for the economy, but as this market has made clear traders do not care about the real economy so by proxy neither do I. I just care about making money and if the Fed actually does as they have been threatening for years and actually raises rates that means that there are two blatantly obvious trades that should make us money. The first is to be long the USD. The second is to be short USTreasuries/ long Treasury Note Yields. Let's take a look at the chart for 10yr note yields.
These charts are confirming that the market is giving the Federal Reserve the benefit of the doubt and is indeed currently pricing in higher rates. Using this information we can feel more confident in placing trades that take advantage of Declining Treasury Note Prices/ Increasing Treasury Note Yields and a Stronger USD. However, for these trades to work as anticipated and not potentially suffer some sort of violent unwinding it is critical that the Federal Reserve does as they say they will and actually raise rates, which with their track record is anything but set in stone.....
I've been bearish for a little over a year now. I started getting bearish when I wrote this post The Bull Market Could Be Topping Out. At the time unfortunately, I was still very much an amateur to the business and got too-bearish, too-early. I was foolish in attempting to short-sell against a herd of wildly optimistic Bulls. All you need to do is slowly drive past a cow to see just how incredibly slow a bulls reaction time truly is! Now I am older & wiser. I have made mistakes but have learned from them and have became a much better trader because of it. In this business, you are going to make mistakes that is a given, but as long as you learn from them, don't give up, persevere long enough, your luck can change in an instant. I no longer swing trade stocks. The interim swings/ overnight gaps are too unpredictable and deadly. Of course in hindsight, I wish I would have had a little more stubbornness in my ability to hold for the long run because many of my predictions of individual stocks have ended up coming true YELP, GTAT, KNDI, PLUG, AVP, etc... All of those ended up getting slaughtered. However, the violent short squeezes along the way ended up being too much for me to bear.Now all I do is daytrade futures. All I do is focus on minimizing drawdown. I have a system in place, a set of rules I abide to, a discipline I adhere too. Less discretionary trading, less overthinking: More making $.
Call me a permabear, because despite the repeated thrashings I am now more Bearish than ever. Everything underpinning my macro thesis is slowly playing out. Of course, the crux of my thesis is the USD: Specifically the USD going up. The largest market in the world (forex), is the most powerful & influential. What the dollar (the global reserve currency) does has ramifications that affect every other market on earth. Dollar strength spills over into commodities(oil), equities(earnings), bonds, etc... After a near vertical move, the dollar has consolidated sideways for half a year, but today we are sitting at a pivotal moment in time.
We are at a point in history that despite an atrocious global economy with every nation of the world (including China) economically slowing, the Fed Finally wants to raise rates after keeping them at Zero(unprecedented) for seven years(madness). If the Fed were to raise rates at a time where nearly every other nation on earth is debasing their own respective currencies, the dollar will most certainly resume it's northbound trek into the stratosphere!
Watch those Junk Bonds, watch that collateral, watch those derivatives. The world is now awash in $1.5 Quadrillion of Derviatives according to popular gold bug sources. Who knows the true number of derivatives outstanding but margin debt is at record highs!
It's not like the world financial system is going to collapse. The banks are well padded with currency reserves. However, it is very unwise to ignore schools of thought with generations of proven effectiveness such as Dow Theory. In Dow Theory it is a confirmed top when Both Transports & Industrials are below their 200dma.
Maybe we bounce from here who knows? But in my view, bounces are to be sold into as we could very well be watching this 6month H&S play out.
It is impossible to know for sure what will happen but the market is rapidly weakening underneath the surface. I'm just daytrading futures, but I will continue to trade with a bearish bias as we could very easily be peering over the edge of the cliff into the abyss, or at least some sort of 20% correction, the likes of which has not been seen in years. When it comes, it will be swift. Hold on to your hats & don't get caught flat footed!
The ability to do what you know you should do, whether you feel like it or not.
What I should do:
• Stay Positive.
• Look at every experience as a victory/lesson.
• Use a tight stop & be willing to get out of a situation very quickly if it is not working out.
• Never obsess or get too emotionally involved.
• Retain proper position sizing, never risking more than
three contracts at a time.
• Take the victory & quit while I'm ahead.
Must engage sound risk management techniques at all times
The entire Bull Market has been underpinned by accommodative Federal Reserve Policy. What we find is a shocking correlation between the equity market and Reserve Balances with Federal Reserve Banks.
R. J. Sullivan IV