Market Games

 One of the mistakes investors make is expecting problems in the economy, to immediately be reflected in the stock market.

The stock market is value is determined by buying and selling pressure, not actually tied to the economy directly.  The market is more directly affected by change in liquidity of the public investing and firms.

In the very short term, we may actually have a final 'pop up' in the market as money leaves banks or other conservative investments providing MORE liquidity into the market.   Also, people tend to place leveraged 'investments/bets' on the market to capture profits in the direction they think the market will go.  This provides an incentive for big money to force the market the other direction to capture those 'investments/bets'.

In short, we may see one final short squeeze, a market pop up.  If that happens, I will place some short 'investments/bets' for the first time since 2020.

Overall market target is still much lower, 30% is my minimum target.

Good luck!

Potential Market Failure

 Back on Oct 14th I posted it was  reversal day, with a rally into March.   It’s March!

To be clear, I think its LESS likely of a fail from here, more likely a recovery.

Bank index did absolutely terrible Thursday, and if this doesn't recover ASAP, the market failure is imminent.  Target is 50% lower at a minimum until we find a bottom.

We could continue higher, if we do I believe the market will eventually fail with the largest single day drop in history.   But the market could break down soon with a more orderly wiggle trend downish.

Fridays job report could trigger the biggest day down (Monday?) I don’t think the report alone can do it.  If Russia or China state something really nasty turbo charging the jobs number reaction , if the market can move far enough to start a market maker squeeze.   

Robin Hood 20 year old's have taken their gambling addiction to zero day options.   The risk volume is in the trillions.  Yes trillions, while the S&P 500 30 day options is very low.

That leverage in a single day could create the market maker panic if the risk becomes too great to cover 'the bets'.   I think we have more time (~1-3 months), but if we get a market move up continuing in the month ahead, the setup will be in place.  Ironically in Oct 14th post I said that *I* would be convinced the market will go higher in March, and here I am writing it. Listen to me on Oct 14th or today, your choice.

What everyone is waiting for is a break through the trend lines.  (click on image) If we CLOSE on a FRIDAY below these lines, its not going to be pretty, expect immediate market decline of 10%. 

If we break below , first stop is the 200 day moving average, about S&P 500 3740-ish, then next stop is 3500, then 3267.  Past that, final stop is ~2600-2700 range.  The market high was S&P 500 4082, now at ~3945.

That would be a very big drop.  If we hit a critical mass low (2700?) , I will be buying INDA, EWW, and EWZ for a decade hold. I purchased Royal gold at the USD top, and will retain that as a hedge, along with some crypto holding.

Good luck!