Loading ...If the Dow cannot find support at or near the 200 DMA, it will enter a bear market.
This would not be unusual for a bull market that has lasted nine years or longer. The TV pundits have been talking about the strong economy, but this might be more about government, personal, and corporate debt that will eventually catch up to the “strong economy” through higher interest rates that will make the debt more burdensome. Today DOW fell through the previous lows and the 200 DMA is the next support, only a couple of thousand points below.
Good call on the reversal at the 50dma North. In my mind the jury’s still out on how long and how severe this correction will be, but I think the impact of blowing up the short volatility market’s going to be bigger than the market has been acknowledging so far.
Thanks, PT. It is going to be interesting to watch. I find it strange that they rarely talk about the debt on TV, yet it is a common topic on various websites and YouTube channels. I believe that Rick Santelli did say the debt was the “elephant in the room.” I agree with you on the impact of the volatility market waking up.
Yeah, everybody’s given up on the debt ever being an issue again. Just like short vol was the trade that never fails LOL. Short vol funds, up 141% over a few years, then down 100% in one day. Modern finance…
Agree—Excellent call. Where are you Fully? 😉
Right here Sgt Schultz
I suppose you think I was wrong or something. Happy to oblige and say when I’m wrong but you missed my post
I bought turn around Tuesday near the lows and sold at the 50% retrace for the best trade I have made in a long time ( Via HGU…and HQU….Canadian Bulls 2Xers)
I actually agreed with North that there would be another leg down and here we are.
I’ll likely give the long side another shot if we get follow thru tomorrow.
So before you do any Fully the bully bashing re read these posts please
https://goldtadise.com/?p=423638
https://goldtadise.com/?p=423693
One way or another John Q is going to have government paper forced on them. Amazing how the money is funneled exactly where the CB’s want it. Paper didn’t look so attractive 2 weeks ago anybody read the headlines. It was everywhere lol. Even China was turning their nose up at paper. Now the SM’s have been dumped on it’s ear and Crypto and PM’s put in their place. Did anybody listen to the speech last week another 1.5T of worthless paper coming off the press as well as QT of about twice that amount in addition to whatever the ECB has saved up. IMO the CB’s may have a new priority?
“Whatever it takes” quote is timeless.
Agree 100%, and the quotes from central banker dudley today were quite humorous given the market backdrop. He said the selloff so far is ‘peanuts’ and the fed will hike 4x this year, doesnt care about the market.
I realize when you get selloffs of this magnitude you need to take a step back & zoom out on the charts. Pull up MONTHLY charts and start looking for support. Still 1,000 points to go until the 13 month moving average on the monthly chart. That is quite incredible and highlights how out of hand this market got. Sure, earnings are still good, the economy is doing great. But interest rates have ALWAYS been a part of risk/valuation models. If asset managers were pricing in 2.6% rates 3 weeks ago, that justifies one earnings multiple. Now if they price in 3% 10Ys (or who knows, 3.2%), that takes the justifiable multiple down considerably. So that’s what I think we’re seeing.
I’m thinking the markets were dumped so the CB’s didn’t have to raise rates? IMO the CB’s are behind this maybe got there finger on the GREEN & RED buttons both ways until John Q is full up with this freshly printed paper. The exchange rates are deathly calm? Really? The SM’s puking and exchange rates are flat as ever?
“If the Dow cannot find support at or near the 200 DMA, it will enter a bear market.
This would not be unusual for a bull market that has lasted nine years or longer. The TV pundits have been talking about the strong economy, but this might be more about government, personal, and corporate debt that will eventually catch up to the “strong economy” through higher interest rates that will make the debt more burdensome. ”
Totally agree. About a third of the EW folks I follow have called it a top. One more indicated he was leaning that way today.
I would get VERY nervous, if the 200dma also fails to provide ANY support, as it was with the 50dma.
There are VLT counts out there suggesting that the term “bear market” may not do justice to what we have in store for us. That will depend on whether the bond market has also, indeed, entered a bear market. THAT is the market that most should be concerned about. And economic weakness (which negative wealth effects from ANXIETY alone over the speed of this decline) will have feedback effects that put EVEN MORE pressure on public sector finances. Armstrong has warned that rates could accelerate higher. Welcome to feedback loops 101!
Armstrong has also said the time is NOW for a shift from Public Assets ( Bonds) to private ( Stocks)…at lest that’s the last I heard from him
A lot of people are expecting a move back up to 29,000 and then a drop. I am not sure if this thing is going to return to a new high before it collapses.