The Daily counted the decline from 4/26 as a completed 5-wave in the futures. Their wave counts looked more orderly than the cash market. This is wave 1 of many waves of the great bear market. The market retraced 40% of this decline with the rally near the close. So, the minimum has been satisfied in price. Currently 10% short using SDS.
The Nasdaq only counts 3 down from 2/26.
With I1 down through Monday we can assume at least a re-test of the lows before then.
The Nasdaq has identified the period when the erroneous trade(s) played hob. 2:40 is when the system could no longer handle the imbalance.
The 1929 crash caused errors in the back office after hours as trade matchup occurred. The volume overwhelmed the staff causing pretty crazy things to occur. I can assume that volume broke the bank, so to speak.
Steve
ReplyDeleteThe (1) wave of the Great Bear. It’s pretty historical. I think it is the most frighting time of my life. To see what’s happening and to know its coming this way. How far will it go? Could it look like Grease in a couple years, here? They inflated these markets up so much with debt there's only one possible ending to it all. Unless stimulus 2 comes along, da ta da. Are market could look like Japan (what is it 3 or 4 stimulus packages so far) UP, Down, Up, Down. That would change everything and just like the last one (secular Bull) I would not want to fight that either. They just keep delaying things and each time they do, it only makes things worse. Stimulus 2, they were talking about it before stimulus 1 was hardly going and then it kind of just faded away. I see it coming, the US government does not have the stomach for what’s coming and they will do what they always do, pass it on to the next guy to deal with. We will get at least one more new secular bull after this (finger on the trigger, be ready to change directions when or ifff it happens).
Jack, it is historic. I have got to get the gumption up to hold short for long periods. I have changed my mind about yesterday. It was not a mistake, it was reality at that moment. It will happen again but without the snappy comeback. The U.S. government is a slave to the American expectation. Our society has changed to a "fix it now" rabble. What is coming is beyond the government's control. They cannot spend money the way that they have and the money that they have spent does not shore up our economy, much less the world. The Republicans are coming back in November. Not the poster children for fiscal restraint, but endless trillion+ deficits are not on their agenda. In the "New Abnormal" past debt is debt due. The more debt you have the tougher it will be to find buyers in a world that's running scared.
ReplyDeleteThe world funding problem impacts us and inhibits our government revenue in the face of a weak economy. Feedback into the world economy will also impact China. They slow, everybody stops.
Steve
ReplyDeleteWell put
I read your commentary this morning, till 6/8 it is.