It's worth noting that, just like in February and the market was full risk-on and people were bullish, all-while the pandemic was hitting our shores, here we are again. The pattern is striking. The pandemic is fading, but we're on the cusp of a much bigger problem. You invest your money the way you want to, if you were bullish in February, just don't.
DXY ready to reverse RSI losing strength UVXY back down where were were last time SPX forming ascending wedge with no support below We facing shutdowns again Trump is......not going anywhere LOL.
Are you open to the thought that SPX and the DXY both move lower?
BMLemon
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@mtb1980, Sure, that could happen. It's unlikely though. QE has been surprisingly deflationary. It's common for equities to rise along with the dollar, but the world just ditching the USD, in favor say btc, is a crypto bull's opinion. I'm pretty confident with all the sentiment about BTC making everyone rich and USD going to zero, the opposite will be observed. I think we'll see USD rally to around 107, at which point btc will be a good buy and set up for a true bull run. I'm just not convinced, with all the unemployment and need for USD, the stars are aligning for a real crypto bull run just yet.
Tiger_Style
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I seem to remember creating a similar chart back over a year ago, and I believe you commented on it noting that you hope we all still had jobs if the market tanked that hard. Well, here we are unfortunately. It's hard to be a bear when everyone is piling in.
BMLemon
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@Tiger_Style, I know. We have to control our emotions and view the terrain for what it is, extremely uncertain. Doesn't matter what the sentiment is, this is very dangerous.
merkd1904
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Couple things just for conversations sake. 1. The pandemic is now 9 months old, and albeit more intense currently, more manageable. Meaning it is now a known known. Not the unknown unknown that it was in Feb. Secondly, why isn’t Trump going anywhere? Thirdly, what bearing does UVXY’s current price have on SPX?
BMLemon
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@merkd1904, Great questions. I think the pandemic is old news, you're right. My point was that the market is very bullish despite the fact that we're on the verge of nation altering events. In February it was Covid, now it's political turmoil. Trump is not conceding, it's clear he's not accepting the election results, especially in the wake of the state senate committee hearings (I hope everyone is paying attention to those) which will certainly end up in the SCOTUS. It's very possible for Trump to remain in office and it be completely constitutional. Half the country will will view this as a coup and the other, a victory. UVXY, I just throw that in there to show how we're right back where we started, albeit the market has reached ATHs while UVXY, and VIX have yet to make new lows.
It's also worth noting that while the U.S. is distracted with it's political nonsense, tensions are continuing to escalate with China and much of Asia. A war could very easily break in the very near future, particularly revolving Taiwan, India, Australia, Japan, and China.
I guess my main point is there is extreme risk in the market right now, and wouldn't guess it by the sentiment, which is a recipe for disaster.
WTFpattern
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@BMLemon, The Trump angle is a big unknown, doesn't seem like he will go, and if somehow his longshots pay off there would be complete chaos. Massive protest from civilians and possibly within government, sit-ins in capital buildings all around the country, everything short of all out civil war. Not saying this would happen, but California could succeed from the US and be the 5th largest economy in the world on its own. I would be worried about assassination attempts at that point as well. The tree of liberty needs watered with blood right? Truly a murky horizon for the market to be so risk on at the moment.