Turmoil. On Monday the global stock markets crashed. At the open, the Dow briefly fell as much as 1100 pts.
The futures before market open fell so far as to get locked limit-down.
The futures before market open fell so far as to get locked limit-down.
The move was so violent, the move was so fast. The crash was viscous, both ways. Volatility up & down.
Over-trading in this environment is a sure-fire way to get yourself killed.
Just as fast as it dropped, it rallied as panic-buying set-in. The Bulls still in Denial. Just as I predicted on this dead-cat bounce you see a staggering amount of traders vehemently believing that we are out-of-the-woods. Many people fully expect a V-Shaped bounce to new highs.
Little do these fools know, this is just the beginning. The chickens have come home to roost. The crash, foreshadowing the carnage that is to come. The Bull Market was built upon a jet-stream of ZIRP/QE cheap money. The $ was too easy on the upside, with no notable corrections or shake-outs to keep speculators honest.
Easy $ goes just as quickly as it comes, if not faster....
A Bull market in a Global-Depression. You've got to hand it to the central planners for ingenuity. However, their efforts are misguided and have only delayed the inevitable. The system is just as convoluted, just as fragile, just as intertwined, just as fake, just as flawed as it was in 2008 before the last financial crises knocked the world to it's knees....
There are Market-Forces, there are Natural Cycles that are too powerful to be delayed forever.
Boom & Bust: The Business Cycle cannot be broken.
Home prices, rent, tuition, asset prices, the levels have reached unsustainable extremes. A Deflation is coming, a return to reason. Supply & Demand is a real thing. Right now we have a massive over-abundance of supply thanks to the ZIRP/QE money binge. There is too much money, too little interest rates, as a result much of the money was malinvested. It chased High-Yield Bonds, it chased the Fracking Industry, it chased stocks (many with no earnings to speak of) The Central Banker Bubble, perhaps the most obvious bubble in history is also the most dangerous and least sustainable.
The Bear Market will be Ferocious. The smart money has been positioned short for quite some time. Money has been leaving the market at a record clip this year.
Over-trading in this environment is a sure-fire way to get yourself killed.
Just as fast as it dropped, it rallied as panic-buying set-in. The Bulls still in Denial. Just as I predicted on this dead-cat bounce you see a staggering amount of traders vehemently believing that we are out-of-the-woods. Many people fully expect a V-Shaped bounce to new highs.
Little do these fools know, this is just the beginning. The chickens have come home to roost. The crash, foreshadowing the carnage that is to come. The Bull Market was built upon a jet-stream of ZIRP/QE cheap money. The $ was too easy on the upside, with no notable corrections or shake-outs to keep speculators honest.
Easy $ goes just as quickly as it comes, if not faster....
A Bull market in a Global-Depression. You've got to hand it to the central planners for ingenuity. However, their efforts are misguided and have only delayed the inevitable. The system is just as convoluted, just as fragile, just as intertwined, just as fake, just as flawed as it was in 2008 before the last financial crises knocked the world to it's knees....
There are Market-Forces, there are Natural Cycles that are too powerful to be delayed forever.
Boom & Bust: The Business Cycle cannot be broken.
Home prices, rent, tuition, asset prices, the levels have reached unsustainable extremes. A Deflation is coming, a return to reason. Supply & Demand is a real thing. Right now we have a massive over-abundance of supply thanks to the ZIRP/QE money binge. There is too much money, too little interest rates, as a result much of the money was malinvested. It chased High-Yield Bonds, it chased the Fracking Industry, it chased stocks (many with no earnings to speak of) The Central Banker Bubble, perhaps the most obvious bubble in history is also the most dangerous and least sustainable.
The Bear Market will be Ferocious. The smart money has been positioned short for quite some time. Money has been leaving the market at a record clip this year.
The most recent COT report shows commercial hedgers going massively short. The only people long this market right now are small speculators... Classic dumping on retail at the top.
I want to make one thing clear. There will be bounces, there will be ferocious, spirited rallies along the way. However, these rallies are false. We have seen a paradigm shift from climbing the 'Wall-of-Worry' to now sliding down the 'Slope-of-Hope' These rallies are to be Sold!
Just this week after the crash on Monday we witnessed a massive spree of panic buying into the end of the week some how miraculously closing the week marginally positive. However, closer inspection of Rydex funds suggests that the move was purely mechanical. There was no surge of money going towards bullish funds. This mechanical rebound is what's known as a 'Dead-Cat-Bounce'
Just this week after the crash on Monday we witnessed a massive spree of panic buying into the end of the week some how miraculously closing the week marginally positive. However, closer inspection of Rydex funds suggests that the move was purely mechanical. There was no surge of money going towards bullish funds. This mechanical rebound is what's known as a 'Dead-Cat-Bounce'
Still in Denial. The Dead-Cat-Bounce is the classic 'Return to 'normal'' Phase of the market cycle. Many investors are in disbelief that this 7 year One Way Bull Market can ever end. In 2013-2014 many people actually believed that 'this time is different' 'the fed has our back' and 'the market cannot go down'
The BDI continues it's epic decline. You cannot print Global Trade.
Every day of the Dead-Cat-Bounce was on declining volume. This Reflex Rally presents a great opportunity to sell before things once again turn violent to the Downside...
Momentum is now Decisively Negative. A huge level was taken out and now will likely be converted into overhead supply.
We are not out-of-the-woods yet. Far from it. The American Stock Market is simply playing catch-down to the rest of the world. There has been much bifurcation, many bearish divergences that I have highlighted for quite some time....
Global Stock Markets are much further along in the Bear-Market Cycle...
Don't be scared for this is a great opportunity to make money but you must be willing to abandon the 'Buy-the-Dip' mentality. We have entered a new paridgm where the profitable trading strategy has been flipped upside down to 'Sell-the-Rip' This is a new era in markets, it is the Bears time to reign.
Just don't be a fool and fall for the many sucker rallies along the way for they are simply a Dead-Cat-Bounce!
Just don't be a fool and fall for the many sucker rallies along the way for they are simply a Dead-Cat-Bounce!
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