Archive for the ‘Market Crash’ Category

Massive Short Squeeze

Posted: February 18, 2016 in Market Crash, Uncategorized

Well we have seen a massive short squeeze. Only 2 times since 1990 the US Indexes had three consecutive days of rally.

So is the volatility period finish?

In reality it is quite probable that it is not finished yet. Nor the US Index nor the Australian recovered even the simplest of indicators (Moving Average 50 or 200) – so the rally is welcome, but has very little significance.

On a pure technical analysis basis…it is more a last occasion to sell than anything else.

A typical sign of a short squeeze  is that the Most Shorted Stocks all rallied the hardest (average +5%) .

Also there are too many divergences coming from the mainly institutional markets (volatility/derivatives, credit spaces, Treasury and gold) that indicate an “I do not believe the rally” position.


Paraphrasing the famous sentence of Game of Thrones seems correct this year.

These are difficult times for the markets

If your adviser does not understand it (or if the institution that advises you has a care towards shareholders, not client) you  are a lamb brought to the slaughterhouse.

If instead you understand it…there are really interesting occasions.

Make your choices correct, or ask me if you are in doubt.

As previously written, this year volatility will reign!


Well I wrote of a more volatile 2016 and “do not index” this year…but the start has been worst than expected.

And the there is a old adage in Wall Street (about which I was talking yesterday) which is scary ….so goes January so goes the year.

Also some stock market specialist are quite fixated on the number 7 (this is the 7 year of the post GFC rally). Silly thing, I know…until you see the track record of those gurus.

Yesterday fall has all the hallmarks of  a panic attack – Stock Markets collapsing, AUD falling and gold rising.

Tomorrow (and next week)  is very important …the SP 500 is defending the all important 2,000 level.

A breach of it would signal a confirmation of the 1,820 target*.

*The last low 1,867 has the characteristics of false low as per my December post. I was quite surprised that was not breached to get a confirmation low in the 1820/1840 area.

Apart China, the data for the US also do not look good.

There is the lowest EPS guidance for US Consumer Discretionary in the last five years.

US Manufacturing (December)  looks like contracted the most since 2009.

So it is not the end of the world…but this is a seriously scary year.

Stock Market…Apocalypse Now?

Posted: August 25, 2015 in Fed, Market Crash

Yesterday reminded the last word of Colonel Kurtz in Apocalypse Now…the horror the horror the horror.

This probably was the same words of the Fed Chairman Yellen, the Chinese and  many others.

Still reminded me of the Asian Crisis in 1998 (the SP lost 19% and then recovered everything in 3 months due to the rise of the USD and US interest rates – one major difference is that in 1998 the miracle Asian economies were a fad…now they are real).

But for the market to rip through a support (1970) with such ease is literally Global Financial Crisis.

This is what happen when, from 2011, various market forces do not allow the share market to take a breather…the elastic snap with powerful force.

Now most probably we can forget September hike…December will do. Currency, Oil and Markets are a bit too much of an headache.

So where to look for? The FED of course!

Remember China rout started in June and nobody had a problem with it…suddenly in September (the FED was due to hike the 17th) the market explode.

The real question is

Will the FED admit it cannot hike rates and is ready to start Quantitative Easing number 4 (or Quantitative Easing Infinite).

And will the market react keeping on inflating assets or suddenly understand that the FED is powerless to restart the economy and the markets are just a bubble.

Since the interest at stake (politicians, fund managers, Fed) I would stick with answer number 1 for a QE 4 and rally (from October)