Do Not Short A Bubble - NQ 2/10/2021
NQ at the 4 hour view.
I know it's been a while since I last posted. I've been absolutely swamped at work with 12-14 hour days, but I'm finally seeing the light at the end of this tunnel.
Well, we are here. We are near 14000 for NQ. We probably won't get there in one shot, but it's pretty inevitable at this point. Ever wondered why I was being bullish for several months at a time? It's because of 3 simple answers.
1. TINA (There Is No Alternative). Bonds are only about 1-2% yield. Savings and CD are almost 0%. Cash is being dragged down because of inflation. Where would people park their cash? Stonks and crypto. Why keep a depreciating asset (cash) when you can keep appreciating assets (stocks and cryptocurrencies)?
2. By 2016, the top 10% of incomes in the world own over 84% of the stock market according to Edward Wolff. It's been like that for years and it will continue for more years. The true question always has been, "what will cause the top 10% wealthiest people to sell?" It's never been about normal people (or smooth brained apes like me).
3. The stock market is not the real economy. Fundamental analysis died a decade ago. Any analysis that is based on fundamentals should be ignored as they are almost always wrong.
I've been seeing a lot of permabears on multiple forums who are calling a top. Do not short a bubble. Bubbles will last longer and go higher than anyone's imagination. That's why they are remembered in history. Shorting bubbles is equivalent to a gamble and it's derived from ego. I call them "pride trades." Those trades are known to be hard and the goal is to say "I told you so." Over 90% of pride trades end in empty accounts.
You want to know what happens when shorts pile up and bears think every pullback would be the big crash? Look at what happened to Melvin Capital during the Gamestop event. Look at what happened to the biotech sector. XBI is over 95% shorted and it just kept piling up the bodies of bears. Look at what happened to TSLA.
Any bear who calls a top and claims that they have the "data" should always be met with heavy skepticism. For example, I've heard the same exact rhetoric that Bitcoin would never be a big deal back in 2015. I've heard that same rhetoric (e.g. Harry Dent) that the market will crash in 2013-2014. Though, I am now being very cautious. I just saw that Lindsay Lohan and Amanda Cerny are now traders.
That said, do not short a bubble. Do not take pride trades. If you have kids, do not gamble your kids' futures due to pride trades.
I know it's been a while since I last posted. I've been absolutely swamped at work with 12-14 hour days, but I'm finally seeing the light at the end of this tunnel.
Well, we are here. We are near 14000 for NQ. We probably won't get there in one shot, but it's pretty inevitable at this point. Ever wondered why I was being bullish for several months at a time? It's because of 3 simple answers.
1. TINA (There Is No Alternative). Bonds are only about 1-2% yield. Savings and CD are almost 0%. Cash is being dragged down because of inflation. Where would people park their cash? Stonks and crypto. Why keep a depreciating asset (cash) when you can keep appreciating assets (stocks and cryptocurrencies)?
2. By 2016, the top 10% of incomes in the world own over 84% of the stock market according to Edward Wolff. It's been like that for years and it will continue for more years. The true question always has been, "what will cause the top 10% wealthiest people to sell?" It's never been about normal people (or smooth brained apes like me).
3. The stock market is not the real economy. Fundamental analysis died a decade ago. Any analysis that is based on fundamentals should be ignored as they are almost always wrong.
I've been seeing a lot of permabears on multiple forums who are calling a top. Do not short a bubble. Bubbles will last longer and go higher than anyone's imagination. That's why they are remembered in history. Shorting bubbles is equivalent to a gamble and it's derived from ego. I call them "pride trades." Those trades are known to be hard and the goal is to say "I told you so." Over 90% of pride trades end in empty accounts.
You want to know what happens when shorts pile up and bears think every pullback would be the big crash? Look at what happened to Melvin Capital during the Gamestop event. Look at what happened to the biotech sector. XBI is over 95% shorted and it just kept piling up the bodies of bears. Look at what happened to TSLA.
Any bear who calls a top and claims that they have the "data" should always be met with heavy skepticism. For example, I've heard the same exact rhetoric that Bitcoin would never be a big deal back in 2015. I've heard that same rhetoric (e.g. Harry Dent) that the market will crash in 2013-2014. Though, I am now being very cautious. I just saw that Lindsay Lohan and Amanda Cerny are now traders.
That said, do not short a bubble. Do not take pride trades. If you have kids, do not gamble your kids' futures due to pride trades.