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Megaphone

What a Bitcoin correction could look like short term!I drew up this simple projection chart to help myself understand where we are in the holiday move for Bitcoin. Fibonacci retracements for the leveling, and some fancy art work to calm the soul :D I am however concerned we are forming a head and shoulders pattern here on the 15min chart, leading me to believe we may have a short term forcast to the 1, and the 78 fib That would give us support down toward 37,200 as we come into the longer up trend . I feel like we may touch the 1 fibonacci, but that could be perhaps where we initially bounce up If we develop a head and shoulders id expect another leg down Bitcoin to 41,937, and ultimately 61k Perhaps we hang out a bit above 35k first. We may have double topped on the 40k resistance. Which is healthy and expected initially.
COINBASE:BTCUSD
by TradingNomadic
1
Airplane ModeStocks are irrationally exuberant again this morning after soaring in the overnight session as tensions at the Capitol subside, and Biden is (finally) declared the victor of the election. Is anyone surprised to see another gap up this morning? I'm certainly not, but I do suspect that as we approach the top of the white channel around 378, which is an arms length away from the ATH, we'll see some heavy selling from smart money, who have not participated in the market rally since November. Don't forget that much of the rally coincided with a stark rise in M1, which rolled over into December's price action. Now that the very last few dollars of American's savings have been invested/spent, the only buyers left are corporations and the central banks. I'm not sure if you guys follow the global bond market, but approx. $13 Trillion is about to mature, which could lead to a cascade of defaults across bond markets. We're already seeing a spike in the risk free rate above 1% for the first time since March, which is only going to exacerbate the issue as CTA's begin to sell, and they may even potentially go short if yields continue to rise. According to a recent report by Morgan Stanley, if the 10Y yield rises another 1%, (from 1% to 2%), this could have a direct impact on market valuations (up to a 22% drop in multiples {PE} on the Nasdaq in particular). In other words, the 10Y yield could be signaling to investors, that an imminent market crash is coming. Having said that, we all have to be prepared for the fact that the FED might step in, like they always do, and change the rules of the game. In the jobs market, we saw another 790k American's file for unemployment benefits for the first time last week, while continuing claims remain above 5MM. The moral of this story will be that misallocated capital does not fuel productivity in the real economy. It debases the currency, and hence the purchasing power of the working class, while only the asset owning class benefits from the induced inflation-like consequences. Interestingly, the velocity of money is little affected by the current monetary debasement regime. If we were to focus on debt levels, for example, we'll immediately free up productive capital, and increase the velocity of money, leading to (actual) inflation, by the FED's metrics. But hey, what do I know, I'm just a trader. Thanks for your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
56
Bear Flag or Channel Continuation?Stocks are being panic bid here at the open, so it's another win for central banks and hence the billionaire class. Blue wave, red wave, green wave, or purple wave, it means nothing folks. The way I see it, both the dems and the republicans want the FED to keep crushing the dollar through persistent easing of monetary policy, which primarily increases the wealth gap, while encouraging the working class to go even deeper into debt. It's a mean trick, and for some reason everyone keeps begging for it. On the fiscal side, dems want more stimulus (debt), and higher taxes (why the headfake about taxing when the status quo is that they will continue to print?), while the republicans want less stimulus and lower taxes, (in other words, FED please keep increasing the wealth gap, but don't you dare raise taxes at all to spend our existing money). Either way it's a lose/lose for the working class/90% of us. On the technical side, we're seeing either a bear flag/liquidity grab from the bears, or a reversal of the bearish sentiment/downtrend we observed at the beginning of the week. The 10Y yield is rallying hard today and for the first time since March 2020, we just crossed the 1% mark. Let's see how the roughly 15 Trillion in global negative yielding debt fears when they see that the US risk free rate is paying more than some corporate bonds. What if the bond market was about to crash, sparking a cascade of defaults across the corporate bond spectrum, where the majority of ratings sit at BBB-. Where would all that cash go? Probably not stocks, as they're mostly insanely overvalued, so maybe the best trade, notwithstanding the insane rally in crypto to date, is crypto itself. The sad thing is, Bitcoin is often used as a barometer of sentiment, and a hedge against inflation. So, if we saw a glimpse of deflation in markets, bitcoin would be down 50% similar to the crashes we saw at various times in the recent past. I've said it before and I'll say it again, sometimes the only way to win is to not participate. It's time to start increasing that income, which must keep up with the inflation we're seeing in every corner of capital markets. Let's see how the day progresses, and best of luck out there! Thanks for your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
31
The Truman ShowSo yesterday turned out to be the worst start to a year since 2016 for markets. However, this morning's sentiment is quite bullish, as investors panic bid the majors at the open. SPY is back at the 50 period MA on the hourly (370.57), which also happens to be converging with the 21 period EMA (370.30). If 370.57 holds up as resistance, we could see a sharp rejection back to the 21 day EMA (368.25). If the 21 day EMA breaks, we'll revisit the white channel around 365, and potentially break through this time, paving the way to the top of the megaphone around 360. If we see increased bullish behaviour as the morning progresses, I suspect we may potentially revisit yesterday's opening levels around 375. Highly unlikely imo, but don't forget there's also a possibility we revisit the top of the channel which would set a new all-time high near 377. Personally, I'm positioned for the bottom of the white channel to fall out, and for a comeback of the almighty megaphone. Imo you have to ask yourself, what does it matter to markets how the Georgia elections turn out, or who the President is for that matter, when both the dems and republicans are cheering on MMT, while the real economy crumbles? All I hear these days in politics is "Print! Print! Print!" The narratives that explain price action each day, are the equivalent of the story of Santa Claus coming down billions of chimneys in one night to deliver secret gifts to your children while you sleep. They're just stories folks, often with no connection to price action whatsoever. Take eveything you hear and read with a pinch of salt as we must not confuse narratives with truth. The game is all about reading between the lines, and I'd like to leave you guys with a recent quote from legendary investor, Carl Icahn, "In my day I've seen a lot of wild rallies with a lot of mispriced stocks, but there is one thing they all have in common. Eventually they hit a wall and go into a major painful correction. Nobody can predict when it will happen, but when that does happen, look out below.” Thanks for your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
16
Stocks Gone WildHappy New Year guys! I hope everyone had a relaxing and enjoyable holiday season. Let's get right into today's analysis: Stocks have gone wild! We're seeing essentially every risk asset on the planet melt up as the dollar continues it's slow, and incredibly painful demise. The money supply continues to rise as investors raid their savings accounts, and banks lend their excess reserves in search of more attractive returns than 0.10%, which is the current IOER rate. Based on M1, we can see that investors are clearly raiding what little savings they have left (70% have less than $1,000), as the concept of downside risk becomes folklore, and inflation begins to rear it's ugly head. I think it goes without saying that the line between fantasy and reality has become completely blurred, and so with our hard earned money at risk, we must take this into account, and trade accordingly. The S&P hit a new all-time high in the overnight session, kissing 3,773.38 before giving back some gains this morning. European and Asian markets are solidly in the green, apparently off the back of the media's favorite 2 suspects; hope, and optimism (around a vaccine). Nothing to do with central banks relentless obsession with parabolic debt levels, and perpetual dollar debasement, only to achieve ever-diminishing (real) returns. It now takes over $7 of debt to achieve just $1 of GDP growth, and the divergence is growing exponentially. Is this greed, fraud, stupidity, or all of the above? Mean while, Crypto, and Bitcoin in particular, are skyrocketing higher as the dollar, and fiat in general, looks increasingly like toilet paper. Touching on SPY technicals, which we'll discuss further in today's live analysis, the bulls successfully broke us above the megaphone pattern, solidifying it's role as a key technical support going forward. This was a surprise to me, as I expected the bears to show up with a monthly rejection in the final days of December. However, instead we saw no quarter end rebalancing, no profit taking, no selling, and next to no flows into risk protection. It goes without saying, but I'll say it anyway, there's simply no fear in risk today. Looking ahead this week, we'll be keeping an eye on the Georgia run-off elections, FOMC minutes on Wednesday (for more bedtime stories from Powell's Printer), Thursday's initial claims print, and Friday's payrolls print. As always, I appreciate your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
29
NZD_USD DOUBLE-TOP|WILL FALL TO SUPPORT|SHORT| NZD_USD is in the strong uptrend However, the pair is trading in a megaphone pattern And has recently hit its resistance line Which implies a coming move downwards Should we assume that the pair continues to move in this pattern Double top with the lower high is also a bearish signal All signals summed up make me bearish on NZD_USD And I expect it to go DOWN To retest the horizontal key level SHORT! SL ABOVE D-T HIGH! Like and subscribe to never miss a new idea!
Short
by ProSignalsFx
6
Breaking: Money's Growing on TreesSocialist US President, Donald Trump, is begging congress to hand out $2,000 to every man, woman, and child in the country. This is an extraordinary thing to witness from a so-called Republican President, who, by core party value, should be both socially, and fiscally conservative. The question I keep asking myself is this: If $2,000 is going to be better than $600, then why not make it $1 Million? Why not pass a $25 Trillion stimulus proposal, then there's no need to worry about GDP next year, right? Why tax anyone ever again? Why should anyone look for a job? Why should any money flow back to the government if it grows on trees? *Pulls out a chunk of hair* This morning's data was mixed with personal spending, and personal income coming in weaker than expected, while jobless claims beat expectations, but remains elevated at over 800k. We still have over 20 Million Americans on some form of unemployment. Continuing claims stand at 5.34MM, and later on this morning, we'll see new home sales, consumer sentiment, and crude and NG inventory prints. As we discussed yesterday, there was a strong possibility (you know with all the fraud and ponzi behavior by centrals banks and governments alike), that we might gap up this morning. So said, so done. They gapped us up to the key 368 level, where the 50MA on the hourly is sitting, possibly to induce a last minute 'Santa Rally.' At the moment, it appears the bulls are getting yet another rejection at this resistance level. We'll see how the day progresses - I assume investors are feeling great about how much Trump loves them. Mean while, his properties all over the globe are doubling in value, along with all the rest of his assets, and all he has to do is perpetually dilute your hard earned cash. I appreciate your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
63
Preparing for the Greatest DepressionAccording to James Knightley, Chief Economist at ING, "The agreed fiscal relief package will undoubtedly help mitigate some of the negatives but unfortunately, it won’t be able to fully offset the effects of people staying at home as many businesses face tighter restrictions or are even forced to close." Obviously $900B, 4% (2 weeks) of GDP, can't offset the effects of lockdowns/catastrophic debt levels. With winter around the corner, and lockdowns littering the globe, I suspect this is only the beginning of what may turn out to be the greatest depression in our history. I believe global markets are about to crash, the likes of which we've never seen, and here's what my wife and I are doing to prepare: - As some of you may know, my wife and recently moved. At our new place, we're saving $400 per month on rent. - We've just sold our car, which was costing us about $800 per month between payments, insurance, and gas. With the cost of alternative transportation included, that's already $900 per month savings. - In just a few short months, we've successfully reduced our monthly spending by about 30%. - We don't socialize at restaurants or bars anymore, for many reasons, but mainly because we know we'd be blamed for killing grandma by the community. - We don't shop as often, because we've chosen to pay off debt instead, and increase savings (Gold, Silver, Platinum, Tips, Cash). - Our Christmas spending this year was down about 50%, notwithstanding the rising cost of goods and services. - This is our new norm, and all the extra cash flow and lower debt levels, feels absolutely incredible guys. I don't know what anyone else is doing, but I imagine many other households are becoming more lean, and are paying off debt/saving money instead of spending. If we see even a fraction of households in the US cut costs, like my wife and I did, GDP (the real economy), is going to get smacked even harder. Having said that, I do suspect many households will continue to trust in the FED, and their seemingly reliable governments, and won't pay down debt, won't save, or stop shopping on credit. This is really unfortunate, and is only going to exacerbate the problem, leading to mass insolvencies when rates eventually do rise. Global Market Update: - US majors are mixed at the open - Vix is getting hammered after a strong rally to 31.50 yesterday - European markets are in the green, with DAX and Euro Stoxx 50 lagging behind - Asian markets are solidly in the red - USD is holding onto a 90 handle - Gold is down marginally to $1,871 - Q3 GDP up 33.4% vs exp. 33.1% - GDP deflator 3.6% vs exp. 3.6% - At 10AM we get Consumer confidence & Existing home sales numbers (exp 6.8MM) Thanks for your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
35
Well, That Escalated Quickly!Hey guys, so as we discussed on Friday, the short-term bearish harmonic has now broken, and we're seeing some aggressive selling this morning off the back of the new stimulus deal, mutated covid-19 strains in the UK, and mass global lockdowns. For the few bears left standing, the megaphone is now back in play at 359. Today's supports are 363.30, 362, then finally, the almighty megaphone baby. We've been waiting patiently for this shift in sentinent to come in the form of a sell the news event, and so I know many of you are excited to finally see a notable correction. The monthly candle has always looked like an anomoly to me, and price action in November and December felt almost like an injustice. If today's selling persists, and we lose 359, the bulls are in serious trouble. I appreciate your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
14
Coming Soon: Price DiscoveryA gap down on Quad-Witch? The FED must be panicking. After hitting all-time high's yesterday (once again), SPY is seeing some heavy selling pressure here in the first 30 minutes of Quad-Witch, along with the rest of the US majors, which are down about .3%. The intraday bearish harmonic appears to have broken, and we're now back to a 369 handle, just north of the 50 period MA on the hourly. On the daily, our first major support is around 366, then the 21 day EMA at 364.93, and the recent low/bottom of the ascending channel from Nov 9-10th, around 362. I'm expecting to see some fireworks today during power hour in particular, and potentially see the Vix break above 25 into the close. This could pave a short path to 32. I'll be watching the Put/Call ratio closely for signs of a breakout, and a clear shift in sentiment (back to reality). The megaphone is still in play on the monthly, and if an outside reversal candle does emerge by EOY, the bulls are in serious trouble. I appreciate your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
29
Possible Bearish Harmonic (15m)Possible bearish harmonic XABCD pattern showing potential upside to 373 in the interm. 373 is the top of the recent ascending channel formed from the Nov 9th high, and Nov 10th low (in white). The top of the channel also happens to converge with the longer-term ascending trendline from the April lows (in green). Let's see if we finally get that monthly (outside reversal candle) rejection we've been waiting on, to take us back below the megaphone trendline. Homebuilder sentiment is shifting to the downside, and alongside a notably weak retails sales print this morning (-1.1%), we're definitely starting to see growing weakness in the real economy. Apparently congress is close to a stimulus deal, and it sounds like they're serious this time. Let's see if the culmination of stimulus news, vaccine rollout news, Biden winning the electoral vote news, and the real economy breaking down news, is enough resolution bring about a sell-the-news event this week. It's time to prick a hole in the largest credit, and rate driven bubble in history. I appreciate your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
6
Buy the Close, Sell the OpenIn a recent report by Bespoke Investment Group, it was revealed that one of the most profitable trades on Wall Street, since 1993, was to simply buy the S&P close, and sell the open. If you did just that alone, you would have seen a whopping 800% return to date, vs. doing the opposite, which resulted in a shocking 10% loss over the same period. According to Zero Hedge, this simple but effective strategy has seen the S&P rise 660 points since May, while doing the opposite has shown essentially no change. On the year, the buy the close, sell the open strategy is up 9.2%, vs the buy the open, sell the close, which is up just 2.6%. I think it goes whithout saying that markets are being manipulated from every angle imaginable, and it's clearly nothing new. We've all observed the seemingly relentless gap up's, like the one we're seeing again this morning, persistently distorting valuations, and acting as a money printer of sorts. It's frustrating when these types of schemes appear, because you know it's no accident, and market participants are willfully tarnishing the integrity of markets, and along with it, the mechanism of price discovery. Personally, I'm sleeping great now that I have zero long exposure. Alternatively, with little if any upside left in markets, based on my own technical and fundamental analysis, I'm positioned for a repeat of the March crash. I think the megaphone will hold on the monthly, and we'll see a 10% correction in Dec/Jan, at the very least. I appreciate your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
12
Stocks Soar on Vaccine RolloutIt's Vaccine Day, Yay! Maybe now, Mr. Market, we can see a sell-the-news event? Don't hold your breath, folks. After a strong gap up overnight, the US Majors are being panic-bid here at the open. Vix is crashing down to a 22 handle, erasing all of yesterday's gains. The Put/Call ratio shows the incredible shift in sentiment over the weekend, going from a 50 handle on Friday, down to a 34 handle on the open. Holy sh*t. The 10Y yield is still hovering just above the 50 period MA on the weekly (.867). The dollar is down to a 90 handle. Asian markets are all in the green, while Eurpean markets are trading mixed. Let's see how the morning session shapes up as we approach the all-time high's, once again. Stay tuned for live updates throughout the day, and thanks for your time today guys! If you enjoyed our analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. - Hedge.
AMEX:SPYShort
by Hedge_Of_The_World
12
Do Not Disturb, Drunk on a YachtBoy do I wish that were true. Instead I'm waking up to a freezing cold winter in the North Pole (Canada), and a world on lockdown. It is Friday, though, so I'm in a particularly good mood, and if I must say, watching global markets in the red (for a change), just puts a smile on my face. Yesterday we discussed the potential for further downside, off the back of overbought conditions across multiple timeframes. Overnight, the S&P tested the 100 period MA on the hourly (3644.30), after hitting a session low of 3628.38, just above the gap from Dec 1st. It feels unusual discussing a gap down, as it's been so long since the market has shown any real weakness. I almost forgot what it felt like to see red numbers on the screen on a Friday, but the majors are all down around half a percent, and Vix is up 6% to a 24 handle as we approach the open. According to the financial media, today's sell-off is brought to you by, "Stimulus doubts," and "Disruptive Brexit talks." Nothing to do with the historic valuations, debt, lockdowns, or the crumbling economy I guess. Today we'll be watching the 21 day EMA around 361.80 for initial support, and if sentiment is actually shifting negative, the top of the megaphone at 358.50 is most definitely in play. We could see buy the dippers panic bid markets on the open, but I have a feeling the tank is beginning to run on fumes. The Vix, Rates, the Dollar, and the Put/Call ratio are all showing strength today, so let's see what happens next... As always, I appreciate your time today guys. If you enjoyed today's analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
6
The Good, the Bad and the UglyAfter trading essentially sideways overnight, futures are seeing some pressure this morning on a weak Jobless Claims print. Initial Claims came in at 853k vs 720k exp. (the largest weekly rise since March), with Continuing Claims rising for the first time since the crash, to 5.76MM vs a prior print of 5.53MM. CPI came in hotter than expected at 0.2% vs 0.1% exp. no big surprise there. The silver lining in the jobs print was the total number of Americans on some form of unemployment is now sitting below 20 Million. That's something I guess? This print isn't reflecting some of the latest lockdowns, so things are going to get worse into year end. The FDA Panel is voting on Pfizer's new Vaccine, so I suspect a well timed headline may show up to save markets. But, absent a stimulus deal, and an improvement in the real economy, stocks could continue to face downward pressure as we approach EOY. A vaccine approval could also serve as a sell-the-news event, along with any "solution" to the heap of systemic problems facing markets. Clearly every rumour has already been bought, so imo markets are priced to perfection, and can only go down from here. SPY appears poised to gap down to a 364 handle on the open, with the 100 period MA in play around 363.75. I'm keeping an eye on the gap fill from Dec 1st around 362 (just above the 21 day EMA), and the top of the megaphone around 358.50 for signs of support. Absent support at these levels, the bulls could be in real trouble, with a half a dozen gaps waiting to be filled from November's risk binge, and overnight gap parade, sitting just below us. Stay tuned for live updates throughout the day, and thanks for your time today guys! If you enjoyed today's analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
19
Of Course I Talk to MyselfHey guys, I hope everyone's having a great week! Let's get right into it today. So the majors saw new all-time high's overnight (again), but appear to be experiencing some weakness as we approach the afternoon session. At the moment, SPY is trading comfortably above the megpahone pattern (and longterm resistance trendline) on the monthly, for the first time in over 9 years. We'll soon find out whether or not this is an outside reversal candle. If it is, I'll be praying for the bulls, because the correction will be epic. But, if it's not, and we continue to melt higher (on persistent dollar debasement), then we'll need to either work our position by hedgeing on the long side with minimal leverage and tight stops, or seek out value through a deep analysis of emerging markets. I would also consider holding off risk all together, and parking some cash in gold and crypto. Personally, crypto carries a bit to much beta for my palate, but I'm always comfortable holding gold or silver. First we would need confirmation that the top of the megaphone has been defeated, and is now acting as support on the monthly. Only then would we adjust our strategy. When you take a look at the SPY on the 3 month timeframe, you'll notice the rsi is in a well defined descending channel, and we're sitting right at the top, where we could see a notable rejection. SPY is at, or nearing overbought levels across every timeframe, which could translate into lower returns in the near term. Mean while, the CAPE ratio is also at all-time high's, confirming limited returns over the next 10 years. Therefore, the justification for taking the risk would need to fall back on the shoulders of the "hope and optimism/recovery," narrative, with the real underlying mechanism driving prices higher, being dollar debasement (inflation). Jobless claims are out tomorrow, so it's going to be very interesting to see how markets react, considering we rallied last week after a colossal miss, and an ugly print. We all know markets rally on bad news, good news, and no news. Trade accordingly. Stay tuned for live updates throughout the day, and thanks for your time today guys! If you enjoyed our analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
44
Gone in 60 SecondsHappy Friday, my friends! Let's get right into it today. So stocks and bonds alike are experiencing some weakness this morning, after November payrolls came in (much) weaker than expected. After a strong September and October with 711k, and 610k jobs added respectively, Novembers print was a massive disappointment (and miss), with just 245k jobs added vs exptations of 450k. This was the lowest print since we rebounded from the crash back in May. The sectors most affected were government with a loss of 86k jobs (as Census employees were rolled off), and also retail which saw 35k jobs lost. It's clear that businesses are already starting to cut costs as we head into what may be a brutal winter season. Unemployment dropped slightly from 6.9% to 6.7%. Let's see how markets react in the cash open, as traders and investors digest increasing labour market weakness. Maybe for a change, bad news will be bad news. Bond yields are spiking, and the 10Y yield appears to be making a run for 1%. We're currently sitting at .96, after a session low of .90 this morning. The majors are up about quarter of a percentage point, but seeing some notable weakness as we approach the cash open. SPY is still moonwalking at all-time high's, and above the megaphone trendine. But, we lost the ascending trendline yesterday at the close, so it's possible the bears finally show up today, and try to recapture the megaphone. I'm expecting December to be an outside reversal candle, with heavy selling as we approach Jan 1. Remember, many of the FED's lending programs expire by EOY, so this could put pressure on risk assets across the classes. Also, many payroll protection programs/unemployement aid, expire in December also, so this could be a bit of a sh*t storm for risk heading into year end. Trade accordingly. As always, stay tuned for live updates throughout the day, and thank you for your time guys! If you enjoyed today's analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
47
Goodwill HuntingI read recently that over 80% of all the S&P500's assets are now intangible. It's remarkable the impact that sentiment can have on valuations. I don't think anyone can imagine a scenario where stocks crash 84%. But, if history has taught us anything, it's that sentiment, alone, can accomplish this seemingly impossible feat. The perpetual sense of "hope," delivered to market participants through optimistic narratives, on a daily basis, is certainly helping the cause. In a recent report, Jared Woodard, at Bank of America, mentioned that value investing is dead. At the moment, I have to agree with him. But, only as long rates stay low, and sentiment stays high. Based on my own personal experience, it appears that sentiment injections are slowly losing their potency, and effectiveness. The law of diminishing returns is beginning to rear it's ugly head, and when sentiment eventually shifts to the downside, we all know what happens next. Jobless claims came in better than expected at 712k vs. expectations of 775k, with continuing claims at just over 5.5MM. Pandemic emergency claims continue to rise, and hit an all-time high last week with a print of 4.57MM. The total number of Americans still on some form of unemployment is hovering around 20 million. You won't see that on the news, though. ISM Non-Manufacturing index came in worse than expected at 55.9%, the lowest print since May. LA has just imposed new lock downs, and I'm getting a sense that California may try to take this state-wide at any moment. Most of Europe is on strict curfews and lock downs, but don't tell that to their stock markets, which are barely changed since the news broke. France is a perfect example; the CAC40 was up the day France imposed new lock downs. Simply astonishing. The majors were up marginally on the open, after a stalemate in overnight trading. But, the SPY is currently making another all-time high, as we speak, and is sitting around 368 an hour into the morning session. Hourly RSI is sitting just below 70, showing overbought conditions, and the daily RSI is approaching overbought levels, also, with a 66 handle this morning. Clearly the jobless claims print won't be a catalyst for weakness in risk assets today, but November payrolls are out tomorrow and I'm keen on seeing how the "recovery" progressed in November. Stay tuned for live updates throughout the day, and thanks for your time today guys! If you enjoyed today's analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
44
The Bear Sips His WhiskeyAfter a day of trading, the bear sips his whiskey, then decides he's just way too stressed to get friskey. He watches his charts over and over again, and then he shakes his head, before he brushes his teeth and get's ready for bed. His paws are sweaty, and his thoughts are heavy, he knows he's probably gonna dream of that chevy, that he can't afford, because his account looks like a honda accord. He wakes up frantic, and his bed is soaking wet, but not cause he peed, but because of the sweat. He's anxious, he's nervous, he thinks this whole thing is coming down, but whether he's short right now or not, his fur will always be brown. He's a bear, yes he is, and his heart is big, but if the FED shows up one more f*cking time, he may have to find a new gig. But he ain't worried, not even for a second bro, cause the tides a'leaving, and stock are in for a reckoning yo. The bulls will be running scared, and the bears roar will be echoing loud, and if not today, or tomorrow, my fellow bears, this once in a lifetime trade will be soon be ours. Sip.
AMEX:SPYShort
by Hedge_Of_The_World
41
Raging BullHey guys! Let's get right into it today. So yesterday the bulls successfully broke through 9 year resistance (well done to the bulls), and as we kick-off the final month of trade in what has turned out to be a year for the history books, the bulls will be looking to take full advantage of the (obvious) death of price discovery, and the bear (RIP). The current Put-to-Call ratio proves bears are extinct, with the lowest print I've ever seen my career (0.34 today). By contrast, the next lowest print was in Oct 2007, when we saw 0.42. Seemingly everyone, (except me) has been squeezed out of their shorts, and hedges. Those still holding cash are slowly but surely watching their purchasing power diminish, with the nuclear levels of fiat debasement we're witnessing on a daily basis. Bitcoin and Gold alike show the inflation carnage quite well, as they hover near all-time highs once again. The US majors were up an astonishing 10 - 12% in November alone, (this used to be a solid annual return), and all that off the back of hope, according to the financial media. It's becoming clear that in a market relentlessly beaten beyond recognition, that only the FED and hope matter. Personally, I'm focusing on increasing my income, continuing to utilize excess cash on hand for hedging purposes, and shorting overvalued indexes such as the Nasdaq. I simply refuse to eat the sh*t they keep trying to feed us each day, and if I have to sit on the sidelines until we see proper functioning markets and price discovery again, that's a better solution imo. ISM Manufacturing came in weaker than expected this morning at 57.5% vs 58% exp. Construction spending rose slightly with a print of 1.3% vs expectations of 0.7%. The 10Y yield is still hovering around 0.9%, with the recent breakout smothered by (timely) demand. The Vix continues to get hammered, and we saw a sub 20's print on Friday, for the first time since mid February. Well done to the FED. The message to investors is clear: Don't you dare attempt to manage risk by shorting or hedging. Just sleep... Thanks for your time today guys. If you enjoyed today's analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
10