5.11.2020

Bad Time To Buy Stocks?

Bad Or Good Time To Buy Stocks?

 



Is this ~33% bump we have had from the low of 18.5k we saw on the DJIA on 3/23 just a bear market rally? It would not be the first one in market history. Price has bounced off of the 50 day moving average three times since it was crossed on 4/27 and it does not look to be headed down any time soon.

3/23 was the day where the 50 day moving average crossed through the 200 day moving average, yielding a death cross. History will look back on 322 as being the last day of the bull run that began with the close of the sub-prime crisis 12 years ago.

Speaking of 322 and the sub-prime crisis, Treasury Secretary Steve Mnunchin tells us that the COVID19 crisis will soon be over and the recovery will be swift. This message is for the noise traders. Mnunchin has a long history of taking the skulls off of the unwary.

This crisis is not going anywhere for a long long time. But where is the market going?

Sure, the FED is pumping trillions into the economy, but unlike during this last decade companies will not be using that money to buy stocks. They will be using it to stay alive as the consumer tightens up spending to a mere trickle of what it was prior to this latest man caused disaster.

There is no good long term news out there yet. The travel and tourism industries are dead. Cruise ships are being turned into oil tankers. COVID19 promises future waves with attendant shutdowns. Companies large and small are going bankrupt. Everyone from individual consumers to sovereign nations are drowning in debt. And war is looming, which will be devastating even if it is a cold one. The global economy will be swimming in lawsuits and fear for quite some time.

Supply chains will be rethought and reconfigured. Consumers will rethink what products and services are actually essential and what can be done away with...so will governments. These things will take a long time to work out and in the mean time everyone will be hemorrhaging cash. 

The FED could just pump out funny money at levels that swamp natural selection and shoot the markets to the moon despite reality. That is the variable that confounds every indicator. 

Something I have learned about indicators is that we use them to divine what the real decision makers behind the curtain already etched in granite. We are using mathematical analysis to tease out the content of market decisions made in secret by the powers that be in this world. They pick the peaks and bottoms and then they systematically begin to inject or remove their capital into or from the system. This activity draws sentiment either up or down. They have monetary strength and gravity to pull the market their way. They never lose. And all we can do is try to guess (after the fact) at what they have decided and when. 

The markets are full of sheep searching with their indicators for a shepherd. The old (ancient) money shepherds and the US government are one and the same or rather the US government and its so-called independent FED are their rod and staff. Now more than ever the elite are using the FED to pump ever more trillions into the markets. Inflation should occur due to the non stop dollar printing, but it does not because a lot of those FED notes go into the markets of the world.

What this "inflation sequestration" really shows is the robber barons sucking future wealth out of the US economy (and out of the pockets of each and every citizen) and the FED and US government are willing accomplices.

But despite these FED steroid injections, maybe before the market goes to the moon again it goes straight to hell first taking the heads off a few more suckers before the moonshot.





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