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Finally, the POWELL PUT comes, BULLS on the rampage!


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#21 dTraderB

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Posted 06 January 2019 - 05:19 PM

Don't want to burst high hopes but...When this bear ends it is likely to visit near 1000 +-200.      We completed a 5th from the start of the fed near 1920. 

 

W1 1929    

W2 1932

W3 2007

W4 2009

W5 2018       

 

Your chart above shows most of it.  

 

 

Z, a SPX value of under 1500 will imply the US and global economies in a deep recession, even a depression?

Do you see that happening?



#22 dTraderB

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Posted 06 January 2019 - 05:28 PM

Let’s start with the ugly:

The biggest risk for investors: That it’s different this time and not in a good way. Why different? Because we are facing the prospect of a major market top in place and a coming recession, but this time central bankers have a lot less ammunition at their disposal compared to the end of previous economic cycles while debt is higher than ever by far. Here we are 10 years into an expansion and global growth has been slowing dramatically and markets are highly stressed.

The ECB is still on negative interest rates, the BOJ is still printing and the US Fed, instead of taking advantage of the opportunity during the growth recovery, embarked on its slowest rate hike cycle in history. During Janet Yellen’s tenure the Fed tinkered much too cautiously missing their opportunity to build a larger buffer to deal with the next downturn. Only 3 months after confidently projecting a 4 rate hike schedule for 2019 recent market turmoil already caused Fed Chair Jerome Powell to cave and send dovish jawboning signals to markets last Friday, the timing of which is following the historic script I outlined in The Ugly Truth.

In my December warning I outlined 6 specific signs to watch out for, one of which was the bull market trend line. That trend line broke in December along with numerous others I highlighted in Shattered Trends:

The reversal in yields and the breaking of the bull market trend in context of an unemployment cycle reaching its historic cycle limit overtly raises the possibility that this bull market is over and may repeat the cycle of previous market tops.

If this is so and a recession indeed unfolds into 2019/2020 much lower risk ranges must be considered in the months and years ahead:

The 2000 top saw a recession following into 2001 with markets bottoming in 2002. The total retrace from the lows of the 1990 recession to the 2000 top ended at the .618fib. An equivalent technical move now would imply an eventual move back toward the 2000 and 2007 highs with the .618 fib sitting at 1535. For reference: The 2008 financial crisis reversed more than 100% of the advance from the 2002 lows to the 2007 highs. So if anyone thinks such a move is impossible, it indeed is the historic reversal record of the last 2 bubbles.

Except this time central banks have much less ammunition .

And be clear: Wall Street is not publicly forecasting this technical scenario. But let me also point out that Wall Street did not forecast the 2002 and 2009 lows either.

https://northmantrad...market-outlook/



#23 dTraderB

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Posted 06 January 2019 - 05:29 PM

Douglas Kass Retweeted

Taking Away the Experimental Drugs Federal Reserve Balance Sheet

2019: $4.00T

2018: $4.45T

 

Stocks of their Highs China $FXI -27% Emerging Markets $EEM -23% US Financials XLF -19% Russell $IWM -21% Dow $TRAN -20% Nasdaq $CCMP -17% Dow $INDU -13% https://www.thebeartrapsreport.com/blog/2019/01/05/fed-cave-athon-driving-stocks-higher-for-now/ 



#24 dTraderB

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Posted 06 January 2019 - 05:52 PM

 

RALLY FUEL 

 

David Schawel

 

 

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Via Goldman’s HF survey, leverage is at multi year lows & funds may be playing catch-up if the market rallies

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2:47 PM - 4 Jan 2019


#25 cycletimer

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Posted 06 January 2019 - 09:13 PM

Here’s my. Very short term fearless forecast for everyone:

HIGH on Jan 9th (plus or minus 1 day).....near 2640-2645*
LOW on Jan 17th (plus or minus one day)

MAJOR HIGH is Spring ‘19
MAJOR LOW in 2020

#26 zoropb

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Posted 06 January 2019 - 11:29 PM

db 

 

If my count is correct and only a breach of the Sept. high bar will make it invalid, then if we had a depression and a couple ressesions in the 100 years. It would logically follow a worse scenario than those few minor set backs. 

 

A full economic reset will likely come out of the chaos and we will likely break most if not all records in the indicators and sentiment.


Edited by zoropb, 06 January 2019 - 11:31 PM.

Love, be kind to one another, seek the truth, walk the narrow path between the ying and the yang.


#27 dTraderB

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Posted 07 January 2019 - 07:15 AM

BloombergVerified account @business
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Goldman Sachs says China’s economy has “decelerated notably” and chops back near-term metals forecasts

3:00 AM - 7 Jan 2019


#28 dTraderB

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Posted 07 January 2019 - 07:16 AM

This SHUTDOWN must be resolved in the next week or two or else .....

 

Joe Weisenthal @TheStalwart
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This seems like when Trump is really going to face political trouble with the shutdown https://www.bloomberg.com/news/articles/2019-01-07/trump-faces-pressure-from-calendar-as-shutdown-stretches-on?srnd=premium 

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3:14 AM - 7 Jan 2019


#29 dTraderB

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Posted 07 January 2019 - 07:19 AM

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Oops. More doom data from #Germany: German Industrial Order dropped by 1% YoY in Nov (vs -0.1% exp and after +0.2% in Oct) as foreign orders plunged by 3.2%.

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11:21 PM - 6 Jan 2019


#30 dTraderB

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Posted 07 January 2019 - 07:22 AM

EARNINGS EARNINGS EARNINGS! 

Lower than expected, warnings, revisions....lowering Q1 earnings.... THESE are the KEY to the market's direction in January & February

 

The FED issue has been resolved, at least for 2 to 3 months

TRADE war may be finessed with talks lasting months...

SHUTDOWN should be resolved in a week or two 

 

The real important issues are EARNINGS & GLOBAL economy

 

Holger Zschaepitz @Schuldensuehner
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This chart by SG highlights that you better not rely on earnings estimates. Analyst consensus tends to use ~10% as its EPS growth assumption for the year +1. Earnings downgrades follow same pattern every year for the past 10yrs w/2017 was an exception.

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11:37 PM - 6 Jan 2019