Hello traders,
Another day seems to pass and its becoming redundant with the repetitive yet historic stimulus we continue to see in this market. In fact, if money printing could be in the Guinness Book of World Records, countries would certainly be all over that page. This recent bear market rally has been interesting for the markets: bad news is good news and good news is good news. Hmm..this sounds a little like the 2019 blow-off top we had except now at the expense of an unfortunate humanitarian crisis. Big Bear market rallies are no surprise, in-fact in many cases in history we have seen 20-25% snap-backs, only to fall even lower than the initial 'bottom'.
What can we expect in the near-term? In short, we can expect the continuation of this rally - perhaps no longer in a straight-line and every-day rally, but likely until the 2nd half of May at-least (overall). If there is no OPEC production cut we can expect some sort of pullback, and as crude continues to smash around due to oversupply and lack of demand, any strong impulse down in crude would bring equities down temporarily. We will continue to meander around as news releases, however, I expect to get closer to 2950 in this impulse, or pathetically, close to or around the 3030-3100 range.
On a technical analysis point of view this appears to be a massive Wave 3 impulse and what once looked like a potential 2800-2850 top is considerably unlikely as the historic fiscal stimulus has pushed this rally further and further ahead into further dates in the future.
In the longer-term, I am becoming increasingly worried for the years of malaise that is to come. One of the most worrisome factors is the credit market has been seldom to follow along in this rally with equities. In the short-term this has minimal impact, but typically a year or two out this could be severe trouble and result in a building financial crisis. Leveraged loans remain of particular concern.
In my opinion I believe in the near-term before we see this eventual impulse down (which is only delayed; not 'cancelled') one of the safest investments for your money is straight 1:1 non-leveraged Gold bullion. Because my views on equities have been pushed out date wise, I am now near-term bullish on Gold until algos must sell liquid assets like Gold to cover. Therefore, I believe in the near-term Gold will remain incredibly safe and continue to rise before an eventual correction when everything plays out as I stated.
When we eventually have a strong impulse down, I expect whatever that level is to hold for 12-24 months before another leg down when the market begins pricing in hyperinflation (which will turn to stagflation) brought to you by the orchestrated global central bankers in printing money and bailing out companies. While bankers can 'save' the economies in the near and mid-term through epic money printing, this is nothing but a band-aid.
As an aside, I believe the VIX will likely bottom out around the mid 30s.
Have a safe and healthy long weekend everyone!
- zSplit
Another day seems to pass and its becoming redundant with the repetitive yet historic stimulus we continue to see in this market. In fact, if money printing could be in the Guinness Book of World Records, countries would certainly be all over that page. This recent bear market rally has been interesting for the markets: bad news is good news and good news is good news. Hmm..this sounds a little like the 2019 blow-off top we had except now at the expense of an unfortunate humanitarian crisis. Big Bear market rallies are no surprise, in-fact in many cases in history we have seen 20-25% snap-backs, only to fall even lower than the initial 'bottom'.
What can we expect in the near-term? In short, we can expect the continuation of this rally - perhaps no longer in a straight-line and every-day rally, but likely until the 2nd half of May at-least (overall). If there is no OPEC production cut we can expect some sort of pullback, and as crude continues to smash around due to oversupply and lack of demand, any strong impulse down in crude would bring equities down temporarily. We will continue to meander around as news releases, however, I expect to get closer to 2950 in this impulse, or pathetically, close to or around the 3030-3100 range.
On a technical analysis point of view this appears to be a massive Wave 3 impulse and what once looked like a potential 2800-2850 top is considerably unlikely as the historic fiscal stimulus has pushed this rally further and further ahead into further dates in the future.
In the longer-term, I am becoming increasingly worried for the years of malaise that is to come. One of the most worrisome factors is the credit market has been seldom to follow along in this rally with equities. In the short-term this has minimal impact, but typically a year or two out this could be severe trouble and result in a building financial crisis. Leveraged loans remain of particular concern.
In my opinion I believe in the near-term before we see this eventual impulse down (which is only delayed; not 'cancelled') one of the safest investments for your money is straight 1:1 non-leveraged Gold bullion. Because my views on equities have been pushed out date wise, I am now near-term bullish on Gold until algos must sell liquid assets like Gold to cover. Therefore, I believe in the near-term Gold will remain incredibly safe and continue to rise before an eventual correction when everything plays out as I stated.
When we eventually have a strong impulse down, I expect whatever that level is to hold for 12-24 months before another leg down when the market begins pricing in hyperinflation (which will turn to stagflation) brought to you by the orchestrated global central bankers in printing money and bailing out companies. While bankers can 'save' the economies in the near and mid-term through epic money printing, this is nothing but a band-aid.
As an aside, I believe the VIX will likely bottom out around the mid 30s.
Have a safe and healthy long weekend everyone!
- zSplit
Note
Few Additional Important Notes:1) Market is very news dependent, including that of what happens with oil. Expect volatility both to the upside and downside, however, I expect the peak to still be sometime from late May or around June.
Anything exceptionally shocking (i.e. oil crashes to new lows; escalation in COVID cases, etc) could make this impulse wave come sooner.
2) My view point in metals (Gold and Silver) has changed in the near-term. While I had an idea of being bearish on them, that was due to the fact that I expected an impulse wave down in equities sooner than later. However, the markets artificially positive response to the latest economic data and the latest fiscal stimulus from the Fed has extended my view-point for this next equity impulse down - not eliminated it. The Fed however, is running out of bullets to "shock the markets".
The metals will still indeed sharply correct, but that is unlikely at the time-line I previously suggested, but will still come simultaneously (and eventually) with equities.
3) If you have questions feel free to message me as its difficult to keep up with this thread. However, please be respectful and not "spam" 100 messages to me a day. I will get back to you.
Thanks as always!
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.