The futures before market open fell so far as to get locked limit-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.
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 don't be a fool and fall for the many sucker rallies along the way for they are simply a Dead-Cat-Bounce!