I can't predict the future, unlike many of my fellow traders. However, I know a bad weather setup when I see one. Have a look/listen.
I don't like what I see. I see storm clouds gathering. I see delusional pumping of a market. I see a deep disconnect between reality and sentiment. I see momentum falling off.
But make no mistake - I do not underestimate the power of the FED to pump! The FED's so-called 'balance sheet' has gone wild and is set to go orbital, in a do-or-die attempt to save the economy. They have the power to print - and oh boy, they're gonna print! The balance sheet can easily head upward of $50 Trillion. This means the market could do a 100% retracement, from 23 March 2020.
Along the way people are gonna wake up to "What's the value of money?". This could send Gold into orbit as well - but if the market crashes don't expect too much of Gold.
What's keeping this market up? FED cheap money for sure - and the FAANG stocks. That's about it.
Fundamentals are about reality. Sentiment and technical analysis are the fantasy (which we normally exploit). What happens when reality catches up with fantasy? PAIN!
Disclaimers: This is not advice or encouragement to trade securities. No predictions and no guarantees supplied or implied. Heavy losses can be expected. Any previous advantageous performance shown in other scenarios, is not indicative of future performance. If you make decisions based on opinion expressed here or on my profile and you lose your money, kindly sue yourself.
Thanks for the details. Fed can’t have infinite balance sheet. There is disconnect in the market.
Captain_Walker
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@bmallava82, I don't know that anything stops them. They have legal authority to print as necessary - and they have shown that they will. In fact Jay Powell referred to what is well known as QE infinity, in many reputable financial sites.