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Is the Stock Bubble Bursting?
Houston we have a problem…
For most of the “recovery,” the inflation trade was relatively correlated with high yield credit and stocks moving alongside economically sensitive commodities such as Oil and Copper.
This all fell apart in early 2013. From that point onwards, according to Oil, Copper, and credit, the economy flat-lined. In contrast, stocks kept chugging along, oblivious.
Today, the divergence is absolutely absurd. And stocks are on the cusp of breaking below their two-year trendline:
The failed bounce in particular is not pretty. Usually when stocks have bounced off their trendline, they rocket to new highs.
Not this time:
At the end of the day, stocks are absurdly overstretched from their bull market trendline:
The Fed had no real reason to engage in QE 3 or QE 4. All it did was push stocks into a massive bubble that could very well be bursting right now.
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The trend is your friend. Until it is not.
The Earth is circling the Sun, UNTIL IT IS NOT.
Government is corrupt, UNTIL IT IS NOT.
The Kingdom of Heaven is within, UNTIL IT IS NOT.
Following the trend requires discipline. Following the trend means getting in AFTER an investment turns up, and getting out AFTER the investment turns down, with some system one has set up and is following. The intention is to protect oneself one from losing everything if the investment crashes.
One alternative is fundamental analysis, which is work for geniuses and/or those with inside knowledge.
Another alternative is attempting to pick bottoms, but that exposes one to precipitous losses if the investment crashes.
DO YOU HAVE ANOTHER ALTERNATIVE? I am always hopeful to learn.
The trend is your friend.
Once it touches or breaks that trend line, they will trot out as many FED SOB's as necessary to prop it back up.
HY sitting on the edge of a cliff.
always enjoy your posts
The 5 minute genius is back with another captain obvious maga-stupendous analysis! Bravo Graham! Even though you've been wrong for many years I cannot get enough of it!
Truly this is premium zerohedge content!
The fiat money men move the money between different classes now faster than ever. If stocks start falling know the ponzi men are already in the next bubble you see they control the bubbles.
The best thing for people is draw down cash pull it out and do not put it back. Draw down 1 trillion USD in the USA watch the SHTF as deflation kicks in. They can only inflate if you leave it in the ponzi through leverage and interest.
IF EVERY FUCKER PULLED THEIR SPARE CASH THE SYSTEM IS IN A WHOLE LOAD OF HURT AND YOU STILL GOT THE CASH. THE DEFLATIONARY POINT UNDER SUCH A POILICY MEANS THE MONEY IN YOUR POCKET STARTS ACCRUING VALUE. THEN TAKE THE CENTRAL BANKS TO COURT FOR FRAUDULENT MONEY CREATION.
A win scenario for ordinary folks but you are so brainwashed by the MSM.
Couple things to consider about that trendline: One there wasn't that much volume today. Two if it goes down tomorrow it should be right on the trendline and he next day is Fabulous Friday.
I wouldn't bet on it either way but odds say bounce.
rsnoble , volume has been 100% algo for years , no retail in the mix at all,, when it gets fugly there will be no deley in pushing the red button...
Is GS advising the muppets to buy? I know that douche Cramer is ...
IF you have unlimited bubble creation ability then you can make anything any price you want. Then as every fool jumps in on the dead cert win they pull the plug.
Thats the new normal guide to the FIAT paper game.
The pool of fools is certainly quit large as well.
January 6, 2015
Can I get a witness?
Go look at the Kitco charts. Palladium crashed. Pt is the same price as Au.
Something is weird.
TPTB may suspect Russia is selling Pd and knocked down the price??
It seems weird to draw a straight trend line considering money itself is exponential. If something grows 10% per year for 10 years, the equation is Y = (1 + 0.1)^10. A moving average makes a lot more sense.
More bullshit 'Technical Analysis' for the masses. Price moves up, price moves down. Weird? It's retarded.
This ain't nuthin, Dow still within Bollinger bands, has not exceeded normal volatility, Janet has not stepped in. This is new restraint for the Fed, but it's a good thing, their elimination of volatlity last year was a foolish mistake.
OTOH I'm just not so sure about the low interest rates, that was not in the plan, but I'm suspecting the plan has recently been changed to allow it, as from the Fed's point of view it's a good thing ... though what it means for the market in the future, if and when it unwinds, is another matter. Well, let tomorrow take care of itself, hey?
Illinois corrupt politician, supported by Fermi Lab in Illinois is trying to ram a new law down our unwilling throats.
They wish to define, by law, 100mSV as low dose.
The bill defines a low radiation dose as an exposure of less than 100 millisieverts. For comparison, a person living in the United States receives an average annual dose of about 6 millisieverts, half of which comes from natural background sources. A chest x-ray contributes a dose of about 0.1 millisieverts, and a full-body CT scan about 10 millisieverts.
They also trot out the lie that 6mSv is averaage US dose, the debunk to that lie is here
http://nukeprofessional.blogspot.com/p/baseline-is-just-one-of-lies.html
here is the "story"
http://news.sciencemag.org/health/2015/01/u-s-lawmakers-looking-intensify-doe-s-low-dose-radiation-research
Ergo, the more shit that blows in from Fukushima, the healthier you'll become! Here's to radiant health in 2015.
http://enenews.com/huge-radiation-spike-detected-fukushima-plant-record-...
This sounds really bad to me. But I wanted to remind everyone that way more than half the damage caused by ionizing radiation is caused by the trails of chemical soup left behind in the collisions with fluids and tissue. If you must be exposed, please up your doses of powerful anti-oxidants and drink lots of fluids to help clear out this poison ASAP. I am shocked that my local hosptal does not offer any nutritional preparation or advice in preparation and after CT Scans.
Doing my part, I drink at least a six-pack a night.
...for my health.
You ain't seen nuttin yet.
Most folks...probably over 90% if not more...have actually lost money during this entire rally.
This is why liquidity EVERYWHERE AND ALWAYS MATTERS.
There are STUPENDOUS LOSSES that the shorts and hedgies are sitting on right now. A lot of these losses are INSTITUTIONAL in nature and once realized will show the lack of CONSERVATISM in the bulk if not TOTALITY of money management. (Certainly true of the active folks.)
The fact remains that money was flooding out of the market as the market soared....and now as the money flooding in....
THE MARKET IS ROLLING OVER.
The so-called lost money was never real in the first place for most investors. Most of the people I know in the market are sitting on huge paper gains since DOW 10,000 and have never sold so they are not real gains. If the market retraces back to 10,000, and then they panic sell, technically, they never lost anything except time (and the time value of money). Also, they all think they are investment geniuses when a monkey throwing darts would have done just as good or better.
Funny how most people think they are losing money when the markets go down but don't sell until it's already down huge. Knowing when to sell is key.
The denial is still strong on the street but the sheep are starting to look up from their grazing. I figure when the market hits down 10% the real Chinese fire drill will start and we'll see the market start to stair step down. It took two and a half years after 1929 to bottom out.
I figure a lot of 401kers are like my daughter. When stocks were down 9% in October she freaked out. Another down day and she was going to reallocate everything to her monetmarket option.
It won't take much to really create a stampede.
"Althenia, we are broke."
"What do you mean, Charles?"
"The market crashed. I was ..overleveraged."
"What about the House in the Hamptons?"
"It's already gone, my dear. Oh, let me introduce Rico. He has some work for you."
"What?"
"You still look hot, Althenia. Rico runs a sort of service. He guarantees me you can make 500$ a day."
Algos were a lot slower in 1929.