We have a clear six month downtrend here from the start of the year and a clear megaphone structure.
It was always going to be hard for the price to break and hold above the megaphone but it is doubly hard to hold above the megaphone AND above the 6 month downtrend.
The fed is running out of tricks to pull out of the bag. I fear more headlines like this one about American Airlines "The government gets the right to buy more than 50 million of the airline’s shares in exchange for more than $10 billion in aid."
Smaller companies don't have paper, credit facilities or junk bonds for the fed to buy. Those poor souls will fall to the wayside and become the next part of the drag on the economy.
Banks are already sounding alarms about defaults, bankruptcies. I'm sure next is unsecured loans, credit cards. Why pay any of these thinking the government may bail you out by supressing bad credit isues during COVID if dems take over. Pelosi was already looking at making sure credit isn't affected because of COVID. Never let a good crisis go to waste.
Timing is everything. I think this all holds together for a while longer, helped by upcoming stimulus, and extended unemployment benefits. Guessing they might try to negotiate an extra $300 weekly unemployment benefits instead of $600. Dems are pushing UBI. Timetables for objectives have basically been moved forward. More automation and robotics will replace works. Look at the food processing industry where workers cutting meat can be replaced by machines, and robots can cook food.
To date, the fed has NOT said when it will stop purchasing junk assets, if they did, we would all be able to time the market....
ProfitHarvest
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@iaretheanimal, "Republicans abandon the Free Market to nationalize private industry" is a more appropriate headline to that lol. What a brash display of hypocrisy!
But yea amid all this, one thing is clear. People with inside connections to the government get the vast majority of bailout money and actual workers get pennies on the dollar.
I just hope this time we actual hold all these fckers accountable for taking advantage of this crisis to exploit the working class but sadly that is unlikely.
kaxo1
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@iaretheanimal The Fed buying junk assets is just a sham to make the public think they have things under control, but they don’t. They’re only job is to make sure that things don’t get worse when they get bad, but the complete meltdown of the offshore repo markets in March is the exact thing that they’re supposed to be preventing. Stock prices were rising because fund managers and retail investors were buying, now its a mix of retail buying and fund managers and whales moving their money around until something happens.
Waiting for the clear trigger moment to arise while having full confidence in Trump and the Fed and the MSM (back with the vaccine hope pumps again lol) to keep their money safe until the moment all the good ol' boys sell it all off and let Retail eat the waterfall.
Has to happen sooner or later when the banks are telling their customers to pull out of the market. Eventually they will listen.
ProfitHarvest
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@iaretheanimal, just saw that. That next big dip roughly aligns with markettimer777’s bottom call.
The idea that a crash needs to happen is finally awakening in our collective consciousness B).
iaretheanimal
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This however, is why I say the game is rigged. As of 732AM EST, market futures are down, and this is yahoo finance headline: "Stock market news live updates: Stock futures lower as investors consider earnings, await jobless claims
They create the narrative to fit where they want to go. The news on jobs will be read as, well FEWER new people applied for unemployment, we are still trending down, which is good. Biggest gap that currently sets up the fall is the drying up of the extra $600 unemployment, and congress being out until August 10th. But recall, before they left session, they dropped this:
"On Wednesday, Democrats introduced an option to keep the program going past July 31.
The legislation, introduced by Minority Leader Chuck Schumer and Finance Ranking Member Ron Wyden, would create a "trigger" mechanism, tying the rate of unemployment benefits to the unemployment rate. As long as unemployment remains above 11%, $600 bonuses would remain in place. As the unemployment in each state drops, the bonus would reduce by $100 dollars for each percentage point."
Dems want to continue to fan the flames. I don't see the senate passing anything like this. If the market perceives the same, the end of the month really will look bad. No more extra money to keep things floating, and a wait on stimulus if it comes. Again, the Fed came from the banking industry, is in constant contact with major wall street firms, and does what it can to keep things propped up so that panic doesn't cause everyone to pull out their money. Banks can borrow from the fed window at 0%, run up stocks for 30 days, return the money, stay in with profits, wash, rinse, and repeat. When they perceive the tide is changing and they are fighting against retail, algos will kick in and start dumping to lock in profits.
ProfitHarvest
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@iaretheanimal, Oh yea. MSM is complicit in keeping the ruse in place.
I had no idea until I started tracking the market closely and comparing with the news headlines and seeing the intentional disconnect or deceit. MSM doesn’t know shit about the market, they just parrot talking points and emphasize kindergarten level opinions.
Only thing I give much weight too in the media is interviews with long time traders, bankers or Fed officials. Gotta take that with a grain of salt of course but way more useful than ‘stocks rise on hope of vaccine’ BS fluff clickbait.
CCN tends to have some great counter perspective market reporting too.
iaretheanimal
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@ProfitHarvest, Agreed 1000%. It is well timed to lift the market back up when Fed repo actions and market makers borrowing aren't sufficient to entice more fools in. Robinhood is an excellent tool to fool people into FOMO buying. When the average person watches the leaderboards and sees a 20% move up, they have to jump in thinking they are missing out on an opportunity. Even TD Ameritrade now advertises stocks you follow and the % daily movement on your web browser. I'm a fan of what El-Erian said many months ago...
ProfitHarvest
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@iaretheanimal, Retail gonna get boned hard on this next drop. The FOMO is strong in this market.
Smaller companies don't have paper, credit facilities or junk bonds for the fed to buy. Those poor souls will fall to the wayside and become the next part of the drag on the economy.
Banks are already sounding alarms about defaults, bankruptcies. I'm sure next is unsecured loans, credit cards. Why pay any of these thinking the government may bail you out by supressing bad credit isues during COVID if dems take over. Pelosi was already looking at making sure credit isn't affected because of COVID. Never let a good crisis go to waste.
Timing is everything. I think this all holds together for a while longer, helped by upcoming stimulus, and extended unemployment benefits. Guessing they might try to negotiate an extra $300 weekly unemployment benefits instead of $600. Dems are pushing UBI. Timetables for objectives have basically been moved forward. More automation and robotics will replace works. Look at the food processing industry where workers cutting meat can be replaced by machines, and robots can cook food.
To date, the fed has NOT said when it will stop purchasing junk assets, if they did, we would all be able to time the market....