Obviously the market is somewhat disassociated with the actual economy. Plus it is pretty obvious to me that we have just printed several trillion $ and money is way too cheap. Plus we are basically overdue to a general crash, and I don't think the Covid thing was it. Blip on the radar. What do you guys think? Will 2021 be the new 1929? The vaccine progress is already baked in to prices by now. Once everybody is getting their shots, what next? I am thinking first quarter will be great and second quarter will be time to start going short on the indexes. Any opinions?
I don't know if the market will ever crash again since we are in a meltup but there is a massive credit contraction happening/starting e ght now. You can tell by banks beeing long on bonds while short on gold. (COT/Fed data). There are institutions beeing short of liquidity, we will only know next year who it is mainly. On the surface several bubbles, from real estate to bonds and consumer credits nd so on must be on the edge right now. 2021 will be disasterous for sure.
The FED is the market. Zero interest rates until 2024 and trillions in liquidity at the first sign of a downtick in the markets. Why fight it?
That is all we need to think about. But boy what a rush ... to exit it will be once the day finally comes.
And what happened after the rush to exits feb-April? Not one person on the face of the earth could have even in their wildest dreams seen 3700 8 months later.
Add to it oil at -37. This is one of the most unprecedented years. next year we could be at 1700 or at 5700. Nothing makes sense anymore based on historical precedents. We just need to trade it.
One day in the future, the Great Asset Inflation will come to a halt and certain classes/sectors will suffer a crash / de-rating, which lasts years or decades rather than a few weeks. But that day could itself be years off and a long way up from current levels. Trade accordingly...
Who knows, but whats evident is.... the more prices crash upwards, the more of a liklihood of prices crashing down even more vicious. Look at most of the volatile crashes.. prices literally were sky rocketing prior to the crash.
And not only that, but small caps at all time highs. Maybe we can get the Chinese to cause a global pandemic every year.