My perception is we are on the knife’s edge economically. A perfect storm of demographics, civil unrest, and geopolitical issues. Fortunately, the Fed knows this. No way to avoid pain, but we may have a choice on what kind of pain it will be. At least for a while. Central Banks around the world are being accomodative as inflation is an issue that is easier to deal with than job market destroying and negative feedback loop creating deflation. If the Central Banks can’t keep things together, I’ll take a 40% haircut as a nice, warm Sunday walk in the park. Try a 70 to 90% haircut on for size. If they are able to hold things together, I believe this bull market has years to go before a meaningful bear market, say over 20% down, takes hold. The name of the game for the nest few years will be managing ones “Net monetary position” and keeping ahead of inflation, in my opinion. But having debt in a deflationary environment will undo many when it does hit. Metrics to follow that would be suggestive of retail overextension might be accelerated credit card debt growth as the issuers have been adding a easier and lower cost way of borrowing off of one’s credit lines. We will likely get a similar positive feedback loop that happened after the 9-11 attacks with consumers using home equity lines of credits on their appreciating homes to buy stuff with, which caused further economic growth. Then, of course, 2008 to 2009 happened. Meanwhile, option and futures volumes are at record levels. Nasdaq stocks are well spoken for by retail traders. Lots of froth there suggests a continued correction is probable, but with vicious short covering rallys on Fed jawboning stimulus ideas. As you said, this is a trader’s market, so hopefully most of us here will carry on nicely. Knifes edge. Embrace it, baby!
Nicely said Beautiful.....and just look at the NQ price action after 3:15 pm today. Every dip has been bought. The Robinhood tech traders just won't give up....they're buying stock, they're buying calls...none of them are selling. I don't even know if they can pull off a short sale. Are they even permitted to short stock ?
In memory of all those who were taken before their time. https://obits.mlive.com/obituaries/annarbor/obituary.aspx?n=james-robert-paul&pid=103354 https://www.goodreads.com/book/show/1334384.What_I_Learned_Losing_a_Million_Dollars
I'd post pics but they'd likely violate elitetrader's tos as well as my non-disclosure with the ladies.
That explains why I woke up with 21 women in my bed this morning after wearing my elitetrader.com tee shirt to the bar last night.