UnFunny Money, Believe it or Not, Second Chance Days….with update at 10:40 CST
In thinking about todays blog last night I had difficulty in nailing down a title, so I am just using all three ideas for today, and have a separate section tying into each idea.
This follows the prior major factor from 2010 to 2017, the Bernanke Funny Money QE period. Now we have a period where growth is going to try to be built on what is essentially borrowed money through the Tax Change Bill, money that will grow the deficit and be eventually paid for by the population, not very funny and probably will not really work once the build up is completed.
Believe it or Not
I think all investors have to weigh in on whether they believe the Stock Market has topped or not. I believe it has topped. Basis the S&P and simple Fibonacci retracements measured off the recent decline, 2662 is a 38 % retracement, 2704 is a 50 % retracement, and 2745 is a 62 % retracement. As we mentioned a few days ago, watch gold, so far the action just points to the fact that we are in a staging area, no panic yet.
Second Chance Days
Yesterday was a classic trading day, buy the open and sell the close. I see today and tomorrow as bounce days into the laddered retracement levels. This allows investors who did not sell last week a chance to unload their buy and hold positions. I do not think many investors will as the main question I get is, where to buy. So lets see how this unfolds.
For those who do not agree with me, which is most of you, just wait until you are sure and sell out when we take out Tuesday’s lows.
Watch Tuesday’s lows in Stocks.
Secondly, we are watching the differentials between the S&P and the 30 year T-Bonds, and differentials between S&P and Gold, we are buying Gold and T-Bonds today, to add to the leveraged short Stock positions put on last week. T-Bonds and Gold are fear trades, not an interest rate trade.
We should soon see a break away between the S&P and those two sectors. Short commodities are already tracking with the short S&P.