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BUFFET buff: ‘La la land?’ market insanely disconnected, due for a ‘reckoning'


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#1 dTraderB

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Posted 20 June 2020 - 01:26 PM

TRUTH: as long as FED let it flow then market goes up

 

REALITY: it cannot continue forever and there will be a "reckoning" 

 

"Those betting against this “absurdly overvalued” stock market are about to get paid, if Kevin Smith, Crescat Capital’s chief investment officer, has it right in his gloomy assessment.

“Speculation is rampant and being championed by a bold new breed of millennial day traders,” he said. “The mania is based on a widespread hope in Fed money printing. The catalysts for reckoning are numerous as a major cyclical economic downturn has only just begun.”

Smith, who recently talked about learning the ropes from a stack of Berkshire Hathaway BRK.A, -0.51% BRK.B, -0.55% shareholders letters his dad gave him long ago, said, in a very un–Warren Buffett fashion, that shorting stocks “is worthy of a significant allocation today.”

Smith used this chart of plunging S&P 500 SPX, -0.56% profit margins to show “how insanely disconnected equity prices are from their underlying fundamentals.” He warned that buy-the-dip investors are “not paying attention and have simply been too eager to call the bottom.”

MW-II854_June2_20200618120202_NS.png?uui

Smith reiterated his “macro trade of the century” call that there’s never been a better set-up for rotating out of overvalued stocks and into undervalued precious metals.

 

“Markets driven by euphoria never end well,” he explained in a note to clients this week. “The U.S. stock market today is in la-la land. It is discounting a new expansion phase of the economy at the same time as a major recession has only just begun.”

https://www.marketwa...tors-2020-06-18

 

 



#2 dTraderB

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Posted 20 June 2020 - 01:29 PM

I must admit that I believe markets do not crash when there are so many doom & gloom naysayers. But, it is over-extended so expect a pullback that may have begun on Friday afternoon

 

Stock-market legend who called 3 financial bubbles says this one is the ‘Real McCoy,’ this is ‘crazy stuff’

 

Published: June 20, 2020 at 8:33 a.m. ET

#3 dTraderB

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Posted 20 June 2020 - 01:30 PM

These are really savvy investors so one should heed the warning but you decide how to trade....

 

The rise of mom-and-pop investors in the stock market will ‘end in tears,’ warns billionaire Cooperman
https://www.marketwa...=article_inline

#4 dTraderB

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Posted 20 June 2020 - 01:34 PM

Yes, I still believe there is more than a 75% probability markets will trade below SPX 2000 sometime before the end of 2021, most likely in 2020, and if  pressed I will tell you the low will be in October-November 2020, That does not prevent me from making tons of $$ trading NQ long! 

 

 

Wall Street’s rally threatened by shroud of uncertainty as fresh coronavirus threats to economic recovery emerge

https://www.marketwa...0?mod=home-page



#5 dTraderB

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Posted 20 June 2020 - 01:37 PM


"Have a great weekend! Last weeks engulfing candle saw no follow through-just a backtest of Mays breakout to put in an inside week. Decision week now. My plan: 3060 is battleground. Bullish above, and 3130 is gate to 3200+. For bears: Fail to recapture 3060 opens 2920 where Id buy"
https://t.co/p6zdn8E2CS
https://twitter.com/...0235329536?s=09

#6 dTraderB

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Posted 20 June 2020 - 01:39 PM

3050-60 seems to be a favorite pivot: this from TIC TOC:

Trade plan for week of 6/22:

1. Look 👀 only fo longs above 3056, targets 3300

2. Shorts for me below 3056, targets 2905

Friday close 3057

#7 dTraderB

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Posted 20 June 2020 - 03:30 PM

Many are very bullish.... 

 

"...As long as this market remains above 3k support, the larger Covid rebound remains alive and well. Even a dip and test of this level isn’t a reason to abandon ship. But if prices fall under this level and the selling accelerates, as nimble traders, it is our responsibility to get out and reassess. Until then, continue giving this rebound the benefit of doubt.

Next week is an important make-or-break week for the market. If the breakdown doesn’t happen next week, it isn’t going to happen. Keep your stops near 3k and let the market tell us what it wants to do next. Until the price action tells us otherwise, ignore all the cynicism and second-guessing...."

Screen-Shot-2020-06-19-at-4.39.12-PM.pngF

https://cracked.mark...-what-it-means/



#8 dTraderB

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Posted 21 June 2020 - 07:56 AM

$SPX is projected to report its largest Y/Y revenue decline in Q2 2020 (-11.2%) since Q3 2009 (-11.5%). https://t.co/iAgRf2YgJfhttps://t.co/9EmBiHMqng

#9 dTraderB

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Posted 21 June 2020 - 07:57 AM

$SPX is projected to report its largest Y/Y decline in earnings in Q2 2020 (-43.8%) since Q4 2008 (-69.1%). https://t.co/iAgRf2YgJf

#10 dTraderB

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Posted 21 June 2020 - 07:58 AM

ANOTHER REASON FOR NEW SPX RECORD HIGHS!

$SPX EPS for Q2 has decreased by 36.2% while $SPX price has increased by 20.5% since March 31. https://t.co/iAgRf2YgJf