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We Haven't Seen Moves Like This Since 2008
Stocks are bouncing this morning. As I noted in a note to private clients on Monday, we were at the 126-DMA, which has served as support many times before.
The bulls will attribute this move to market strength. The reality is that it has everything to do with the US Dollar and nothing to do with fundamentals.
There are over $9 trillion in borrowed US Dollars floating around the financial system and plunked into various asset classes. To put this number into perspective, it is larger than the GDPs of Germany and Japan combined.
As a result, the investment world reacts very strongly to any US Dollar move with US Dollar strength hammering “risk” including commodities (particularly Oil) and Emerging Markets.
The below chart shows an inverse of the US Dollar. So if the US Dollar strengthens, the black line falls. You’ll note how closely the Dollar’s movement is correlated to that of Oil (the red line) and Brazil’s stock market (the blue line).
US stocks simply react to whatever happens in these markets because the trading algorithms that dominate market action are focusing closely on Oil’s movements (for obvious reasons that Oil crashed last year).
With that in mind, the US Dollar is retreating today. But this weakness will not last for long. The US Dollar has broken out against every major currency at a pace not seen since the 2008 Crisis. Below is a chart showing the US Dollar/ Yen, US Dollar/ Euro, US Dollar/ Canadian Dollar, US Dollar/ Australian Dollar pairs.
As you can see, the price spikes that began in mid-2014 were the biggest since the financial system was in a free-fall. The current US Dollar weakness will not last for long. When the next leg up begins, risk in general, particularly stocks will fall HARD.
We believe that this is the beginning of the next Crisis… the Crisis to which 2008 was just the warm-up. Today, most investors are completely unaware of the risks to their wealth… just as they were in 2007.
If you've yet to take action to prepare for this, we offer a FREE investment report called the Financial Crisis "Round Two" Survival Guide that outlines simple, easy to follow strategies you can use to not only protect your portfolio from it, but actually produce profits.
We are making 1,000 copies available for FREE the general public.
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Best Regards
Phoenix Capital Research
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bullish
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I' not interested in giving $7 dollar blow jobs on the NY Subway, sorry rolling Thunder down under.
lol
The USD can strengthen on a relative basis and still be devaluing, which is the mechanism by which the stock market has risen.
This isn't a bounce this is day one of the next leg higher. Yesterday was about as clear and obvious a bottom as you will ever see.
This will be like the thousands of dips before. Smart money already bought it, dumb money is trying to short it and in a week we will be making new highs again.
Hey Phoenix dudes, don't get all burned up about this (heh) but you are wasting your e-breath - one of many awesome Dshort graphs clearly shows that margin debt is at new highs. Unlike your message (which doesn't change) his graph tracks something useful - watch it for further news.
http://www.advisorperspectives.com/dshort/updates/NYSE-Margin-Debt-and-t...
Great link, thanks.
Yes the fraud is never ending and laughable, we all agree. Soon we can expect one of the tribal chiefs to enter the arena with bullshit about higher rates and the day of fraud and deception will be complete.
good they are trying to identify those guys
blah blah blah...
in the absence of true price discovery, what fucking difference does it make?
throw another handle full of rounds
on the pile ...
stacking sucks
piling is where it's at...
Come on. We have seen 50 million blog posts like this since 2008.
"126 day MA" LOL Pure horseshit. This joker competes with Fuc to Market's weekend shill pieces for the bottom of the barrel at ZH.
SINCE LEHMAN!!!!
** ALERT **
Watch out ZeroHedge commenters. The DOJ could be coming for you.
http://motherboard.vice.com/read/the-government-wants-names-of-online-co...
What? You mean I cannot achieve some sense of bravado missing from my life by posting some threats on tte interwebs?
What has life become?
Them crazy bloggers must hit some nerves after all ?
Comment removed by NSA
pending review by DHS
for possible prosecution by DOJ
Most ZH commenters are out of reach in a building in St. Petersburg.
LOL. Don't forget Beijing!
dat one building whey day make d'vacuum tubes?
They don't call them vacuum tubes anymore, or even the more proper term - valves.
Modernly they are called EMP-hardened electronics.