Hey Traders. Its been a while since my last post (been busy). October was not the Bubble Bursting but this one is a possible one. Rising wedge getting really tight and close to a break. Negative divergences all over indices. This rally was induced by Corporate Buy Backs due to Fed Capitulation back in December not on fundamentals (Q1 2019 was the worst start of the year for outflows from investors since 2008 according BofA Merrill Lynch Global Strategy, EPFR Global) Low interest rates equals to more buy backs. Fed flipped 180 % and QT is ending in May (4 trillion balance sheet stays unchanged)
No tools left for the next Crisis due to not able to raise rates and normalize their balance sheet.
Scenario one: We Crash in the next two weeks. If we do crash it will be 30-40% drop. Only problem with this scenario is that Crashes don't usually happen in the summer and it seems no stopping for the Buybacks yet.
Scenario two: We get a 8-10% correction and rally on low volume like summer of 2018. Crash after making a Final Blow Off Top to the end of 2019.
Current Administration doesn't want this Market Crashing until 2020 Election so they are asking the Fed to cut rates by 0.50 basis points and launch QE4 (didn't expect to hear about QE4 this fast). Even messed with the Q1 2019 GDP number by using deflator of 0.9% for inflation compare to 1.8% Q4 2018. Oil prices went up 40% this year. If we use same metrics GDP 2-2.20% expect downward revision.
Will they manage to fool the General Public to offset Recession?
No tools left for the next Crisis due to not able to raise rates and normalize their balance sheet.
Scenario one: We Crash in the next two weeks. If we do crash it will be 30-40% drop. Only problem with this scenario is that Crashes don't usually happen in the summer and it seems no stopping for the Buybacks yet.
Scenario two: We get a 8-10% correction and rally on low volume like summer of 2018. Crash after making a Final Blow Off Top to the end of 2019.
Current Administration doesn't want this Market Crashing until 2020 Election so they are asking the Fed to cut rates by 0.50 basis points and launch QE4 (didn't expect to hear about QE4 this fast). Even messed with the Q1 2019 GDP number by using deflator of 0.9% for inflation compare to 1.8% Q4 2018. Oil prices went up 40% this year. If we use same metrics GDP 2-2.20% expect downward revision.
Will they manage to fool the General Public to offset Recession?
