It has been a good rally since the intraday low last Friday.
Yep, not a great rally, less than 3% but still grinding higher, typical OPEX week action, momentum stalling upwards, but
the bulls have managed to keep it going, for another day.
I still remain UNCONVINCED this rally can go much further but... follow the market....
I tried but could not get a decent fill on additional QQQ JUN puts, finally gave up about 1pm yesterday. But, good NQ trades, mainly long.
This from the GMM chap:
Thank You, Mr. Gundlach
In our Monday post, we stated,
Absolutely stunning to see such large budget deficits as far as the eye can see with the actual and projected unemployment rate under 5 percent. What kind of budget deficit beast will we run if we have a recession? Will demand for Treasury securities be there to finance, say, a $2 trillion deficit? – GMM
Jeff Gundlach illustrates our concern in a chart from his presentation today, Highway To Hell
What Does Ray Dalio Think?
Wow, more than $2 trillion in new Treasury issuance hitting the market during the next recession. No wonder Fed Chair Jay Powell looked a little pale on 60 Minutes on Sunday night,
We are not so sure the markets can absorb that forcing the Fed to finance a yuuge portion as they did indirectly during the first few rounds of QE. The question is how will a new round of effective monetization of potentially $2 trillion-plus annual deficits impact confidence in/and the demand for the dollar?
Hedge fund great, Ray Dalio has an idea,
Billionaire hedge fund manager Ray Dalio predicted the U.S. economy is about two years from a downturn, which will see the dollar plunge as the government prints money to fund a swelling deficit…
“We have to sell a lot of Treasury bonds, and we as Americans will not be able to buy all those treasury bonds,” he said. “The Federal Reserve will have to print more money to make up for the deficit, will have to monetize more, and that’ll cause a depreciation in the value of the dollar.” – Ray Dalio, Bloomberg, Sept 2018
That is Game Over, folks. No one cares. That is why you should worry even more.