Head fake with an early pop, and the markets faded all day to lows of 1878. Risk to the downside continues with weak closes.
OPEC nations calling for an emergency meeting. Buy the rumor until it doesn’t work.
Markets have decoupled from China.
Long ES, short ZBs
Another strong intraday reversal to near highs of the day.
Crude oil may have bottom with a few ticks under $30.
Long ES, short ZBs.
The US market exhibited strength into the close while ignoring the fact that China closed down 5%.
Earnings season goes into the full swing this week. The earnings numbers can’t be ignored even if there is fear and uncertainty in the markets, it will help stabilize the downtrend if participants realize that the markets have been oversold.
Long ES, short ZBs.
- Rising US interest rates – companies with debt in dollars could struggle. Leading to payment defaults by companies that could infect banks and states
- Economic slowdown in China
More QE into an already weak economy helps fuel additional speculation. In February 26th, GTC and STOP LOSS order are completely removed from NYSE. Then the rug can be pulled from the retail investors.
A new working lower class is instantly created from the middle class investors who manage to go broke from having the rug pulled from them while they are speculating heavily. This is genius of the elite policy makers.
It is not a question of whether Janet Yellen will or will not raise rates. While she will definitely raise rates, she is most likely to pull a Draghi, and not go all the way with an extreme. Going this route gives her an out, in that she did what she had been saying the Fed will do, at the same time not destroying the equity markets. Further, if the markets don’t respond well, then she can cut the same rates she just raised.
The rate hike will be under delivered, and likely to spike prices of the markets back to the levels of where it started in the beginning of the year.
Crazy as it is, markets don’t care very much for the Fed rate hike. Bull market continues as the risk free rate is coming to an end.
Yellen and the Fed has lost all credibility, and received the middle finger from the market bulls because no one believes the rate hike is happening.
Market expectations were for a rally after Black Friday, instead Monday faced a market pullback from 2095 highs to 2079 lows.
China’s investigation into short sellers and derivative products spooked the China markets with an aim to end speculation.
If no one is allowed to speculate in China, does that mean its markets will contract 50% before reflecting real value?
What if the same thing happens in the US? Is AMZN’s 900 P/E ratio sustainable? It could probably destroy the US markets if the US took similar measures.