NQ at the daily.
It's been a while since I looked at the NQ chart. I cannot believe those trend lines are still working. Currently NQ is in an ascending wedge. However, NQ had many ascending wedges before. There are 9 supports before 11,000 can be touched. So a March 2020 crash is very much unlikely. Besides, if there is one lesson that I've learned in 2020, lockdowns tend to be bullish for tech stocks.
I've noticed that permabears keep repeating 1929. There is a huge difference between 1929 and today. That's the benefit of history. In 1929, the Federal Reserve didn't know what to do as it was only 16 years old at the time. In 1929, there was a great liquidity crisis. Meaning, there was a great lack of money supply. Available cash is the lifeblood of the stock market. Without it, the market tends to seize up. In October 2008, the Federal Reserve tried to inject liquidity into the markets, but it was already too late. Today, the Federal Reserve has the benefit of history. The Fed knows that liquidity needs to be injected early enough where the markets can recover. That's what happened in late March of 2020.
It worked. Since I come from the 2008 era, I didn't think it would work. Guess who feels stupid now? Me.
Nowadays, the Federal Reserve's repo operations have halted since July 2020. Treasury security operations have been reduced to near pre-March levels. Basically, since July 2020, the market has been largely on its own. After all, if you were part of the Federal Reserve, why would you waste your ammo when the markets are above the previous highs? It would probably make more sense if the market crashed more than 20% from the highs that the Fed would legitimately intervene.
What does this mean? It means that the rallies were not the Fed alone. In June 2020, there were over 600,000 new trading accounts for Q2. That's record-breaking actually. How many more accounts do you think opened since June? How many people do you think are waiting below at major supports?
I'm asking these questions because there is more to the market than the Federal Reserve.
It's been a while since I looked at the NQ chart. I cannot believe those trend lines are still working. Currently NQ is in an ascending wedge. However, NQ had many ascending wedges before. There are 9 supports before 11,000 can be touched. So a March 2020 crash is very much unlikely. Besides, if there is one lesson that I've learned in 2020, lockdowns tend to be bullish for tech stocks.
I've noticed that permabears keep repeating 1929. There is a huge difference between 1929 and today. That's the benefit of history. In 1929, the Federal Reserve didn't know what to do as it was only 16 years old at the time. In 1929, there was a great liquidity crisis. Meaning, there was a great lack of money supply. Available cash is the lifeblood of the stock market. Without it, the market tends to seize up. In October 2008, the Federal Reserve tried to inject liquidity into the markets, but it was already too late. Today, the Federal Reserve has the benefit of history. The Fed knows that liquidity needs to be injected early enough where the markets can recover. That's what happened in late March of 2020.
It worked. Since I come from the 2008 era, I didn't think it would work. Guess who feels stupid now? Me.
Nowadays, the Federal Reserve's repo operations have halted since July 2020. Treasury security operations have been reduced to near pre-March levels. Basically, since July 2020, the market has been largely on its own. After all, if you were part of the Federal Reserve, why would you waste your ammo when the markets are above the previous highs? It would probably make more sense if the market crashed more than 20% from the highs that the Fed would legitimately intervene.
What does this mean? It means that the rallies were not the Fed alone. In June 2020, there were over 600,000 new trading accounts for Q2. That's record-breaking actually. How many more accounts do you think opened since June? How many people do you think are waiting below at major supports?
I'm asking these questions because there is more to the market than the Federal Reserve.