Plays I kept posting? You probably thought I was crazy. Now you see the results for yourself. Strong markets don’t make these kind of stupid PSYCH! moves. They might Psych once, but then turn and rip higher. Which is why I have said in the past, I am pulling everything from the markets buy some long dated out of the money puts and get my popcorn.
I have also posted on several occasions the $TNX and $SPX comparison chart. It wasn’t jiving like it has, in the past. I made a specific post how you should keep this chart in your back pocket.
We talked about, how increased deficits were great, but that was offset by Oil CAPEX. Recent article I posted stated $1 trillion worth of projects Worldwide were either stopped or postponed. I had underestimated and quoted $100 Billion plus lost form the US. Either the Saudi is over stating or I am understating but the end result is, it does have a meaningful impact worthy of noting.
We talked about the mechanics of trading, how BREXIT shorts squeezed the market higher and took stops out. Did we continue higher like we should have if all was well? No. Another sign things are not good. Which is why I kept saying the deficit is too small to start a new meaningful uptrend. Earnings growth, suck! Buy backs or no buy backs they suck!
As you noticed in my mini portfolio (that I proudly blew out like a well respected schiffbot buying Gold) I wasn’t buying SPX and stuck to Forex. Not because I don’t like stocks, I didn’t like what I saw in stocks. I didn’t have an urge to run out and buy them at those levels. Now in my personal account I had stocks I bought, BUT!!!! 2 years or ago with excellent entries. Would I have bought them in the last 6 months? Hell no! Too rich for my blood. Simple names, The SPY, GOOG, AAPL, AMZN, NFLX, FB, CMG (no need to get fancy they work!) Other less flashy names MO, AMED, DDD, DSX, TNP, CBI. last 4 I am down. Shorts IBB, EEM, JBLU, CPA, from 2 years ago, GLD from 3 years ago, OIL 2 years ago. and a few I Traded around with in between. The reason I say this, is because some of you think I am only a FOREX trader. Not true. When the time comes and I see something I like, I will post it. But it will not be week or month or two trade. It will be a long term trade. YEARS! Kinda like GBP. Not fun initially, only fun when you sell it!! 😉
Conclusion, I am not saying we are going to crash, nor am I saying w cannot turn and make new highs. I remain in the sideways camp, in a wide range. Deficit this year was increasing and we took 15% drop in stocks, no problem. We eventually went up again. Great! But we will have more of the same as things stand now. Sideways. Now as you can see in the chart below, we broke the trend line that started when we were down 15% back in early Feb. If we do not bounce today, it could get very ugly fast. (Flash Crashes are fashionable these days. :P) Why? Because there is a lot of pressure build up since Feb 2015 going sideways and people not getting paid! Investors are frustrates, Shorts have given up, remember the freckledick video I posted recently “UNSHORTABLE MARKET” guy? Where Tim Seymour said “schitt this makes me want to go out and short everything!” Hedge funds blowing up all over the place, cutting staff etc… See what I mean? It is very likely people say fuck this and sell all at once. Hence making the BREXIT high a failed move resulting in a fast over in the opposite direction.
I want to end with this. The 3% decline I have market is also the pre BREXIT highs we broke out from. It also happens to break the Trend line. Very meaningful that it is a double support area we just broke from a technicians point of view. Which we must be aware. That’s it for now, I hope this helped and made some sense to you all. At least help you understand how I think and why. CYA!
Author Jim Boukis