Bulls VS Bears
Updated
I make most of mistakes when my bias is too bullish or bearish and I miss opportunities on the other side of the trade.
I find it useful to take a step back, clear off my indicators, channels and patterns and look at where we are in the markets with a fresh unbiased opinion.
You'll often find me posting about being bearish while charting bullish patterns and vice versa.
I was convinced spx would hit 5000 before a decline.
But I was charting bearish H&S at the same time.
You know the saying, “Markets can stay irrational longer than you can stay solvent."
To that I say "Hold my Beer"
...........................................
Bull Case
Bull sees a seasonality weak September and equities overbought at the top of potentially a new bull channel.
The Bull is looking for strong Christmas and Employment numbers along with lowering CPI and acceptance of 900B/M of Treasuries.
Smart Bulls realize there is over 2 Trillion in overnight repo and expects it will cover much of the first few months of QT.
Bull wants Fed to slow rate hikes of 50bp or lower and maintain neutral status.
Bull is concerned about event vol on the next upcoming election as tensions rise after the recent political FBI raid. The bull is hopeful there is not a repeat of the last election.
Bull sees a time of consolidation and hedges for short to medium term growth of 3.5-5.5% using a put spread collar around their assets.
The Bull must defend the Tenkan-Sen (Conversion Line) after successfully defending it on Fridays sell.
Failing Tenkan-Sen will quickly see a retest of the 200D EMA.
If Tenkan-Sen and 200D EMA fail, a retest of Ichimoku Cloud would quickly follow by the middle of September indicating a return to bear market.
...........................................
Bear Case
The bear is weak from the past 4 weeks of short squeezes in technology, speculation and meme stocks.
A smart bear realized the significance of the bottom being the same price difference of March 2022 decline and likely joined Bulls in the recent short squeeze rallies.
A bear realizes markets are very leptokurtic and follows volatility, volume and liquidity very closely waiting for signs of a weakening economy to appear.
The bear wants a hawkish Fed hike of 75bp or higher and plans for higher CPI numbers in Sept.
Bear is likely to place heavy bets around upcoming CPI, Fed Meeting and Quad witching.
Finally, the Bear is expecting 900B per month in Treasuries to weaken an already struggling Bond market and deep inversion on yield curves.
In either case... Bulls don’t buy the top and Bears be patient.
I find it useful to take a step back, clear off my indicators, channels and patterns and look at where we are in the markets with a fresh unbiased opinion.
You'll often find me posting about being bearish while charting bullish patterns and vice versa.
I was convinced spx would hit 5000 before a decline.
But I was charting bearish H&S at the same time.
You know the saying, “Markets can stay irrational longer than you can stay solvent."
To that I say "Hold my Beer"
...........................................
Bull Case
Bull sees a seasonality weak September and equities overbought at the top of potentially a new bull channel.
The Bull is looking for strong Christmas and Employment numbers along with lowering CPI and acceptance of 900B/M of Treasuries.
Smart Bulls realize there is over 2 Trillion in overnight repo and expects it will cover much of the first few months of QT.
Bull wants Fed to slow rate hikes of 50bp or lower and maintain neutral status.
Bull is concerned about event vol on the next upcoming election as tensions rise after the recent political FBI raid. The bull is hopeful there is not a repeat of the last election.
Bull sees a time of consolidation and hedges for short to medium term growth of 3.5-5.5% using a put spread collar around their assets.
The Bull must defend the Tenkan-Sen (Conversion Line) after successfully defending it on Fridays sell.
Failing Tenkan-Sen will quickly see a retest of the 200D EMA.
If Tenkan-Sen and 200D EMA fail, a retest of Ichimoku Cloud would quickly follow by the middle of September indicating a return to bear market.
...........................................
Bear Case
The bear is weak from the past 4 weeks of short squeezes in technology, speculation and meme stocks.
A smart bear realized the significance of the bottom being the same price difference of March 2022 decline and likely joined Bulls in the recent short squeeze rallies.
A bear realizes markets are very leptokurtic and follows volatility, volume and liquidity very closely waiting for signs of a weakening economy to appear.
The bear wants a hawkish Fed hike of 75bp or higher and plans for higher CPI numbers in Sept.
Bear is likely to place heavy bets around upcoming CPI, Fed Meeting and Quad witching.
Finally, the Bear is expecting 900B per month in Treasuries to weaken an already struggling Bond market and deep inversion on yield curves.
In either case... Bulls don’t buy the top and Bears be patient.
Note
Correction. It's 90 Billion a month in treasuries. Not 900.
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