The Burst Bubble, a Trader’s Heaven
Here is a second post for today, a personal comment that I sent to a reader of our blog who had a question about what to do here.
The Bursting Bubble…
With the bursting of the stock market bubble over the past two days a new world has evolved. No longer do we have a trading contingent that has an ace up their sleeve, i.e. the FED. Now we kind of have a level playing field, a real free for all.
Macro Direction is Bearish..
The macro element is decidedly negative, however the fact that no one can push the market around to their hearts content, we have a setting for extreme volatility. Kind of a trading heaven. This environment will not be one where short-term technical indicators will help much. This is a “Gut Feel” trading period and will probably go on until the market becomes convinced as to whether Powell is going to fix the economy or not.
Much lower prices down the road..
I would expect this volatility envelope to broaden with potential for even new highs in next six months, but my 12 month view is much lower prices.