U.S. stock market on verge of collapse?

[Uncle Festivus]

Keep calling it Uncle, sooner or later you've got to be correct!

CanOz

Well even by that pattern (multi-year at that) it still has several months to resolve so just something to think about........isn't that the purpose of forums - dissemination of opinions? But when it does, hot air aint gonna hold it up any more.......too much leverage going on with OPM.

As you can see, April has been a top for the last 2 years, but debt ceiling may bring that forward a bit this year?

 

[white_goodman]

Classic.......

The Rising Wedge is a bearish pattern that begins wide at the bottom and contracts as prices move higher and the trading range narrows. In contrast to symmetrical triangles, which have no definitive slope and no bullish or bearish bias, rising wedges definitely slope up and have a bearish bias.

View attachment 50494

I assume youve backtested rising wedges and shown that there is some edge in them playing out?
Or are we finding any pattern to confirm a bias... up = bearish, down = bearish

im afraid to break it to you, you arent a contrarian

 

[Uncle Festivus]

I assume youve backtested rising wedges and shown that there is some edge in them playing out?
Or are we finding any pattern to confirm a bias... up = bearish, down = bearish

im afraid to break it to you, you arent a contrarian

As usual, you are right again - perhaps you should change your user name to 'Right Goodman'

This might be more to your liking - perhaps they should do the same to the US economy........and get a similar result?

 

[white_goodman]

As usual, you are right again - perhaps you should change your user name to 'Right Goodman'

This might be more to your liking - perhaps they should do the same to the US economy........and get a similar result?

View attachment 50508

being bearish on the economy isnt a niche contrarian view, try again

 

[Uncle Festivus]

being bearish on the economy isnt a niche contrarian view, try again

I'm not sure why you are obsessed with this contrarian angle you keep pushing or does that come with you being smarter than everyone else?

PS who's the bloke next to you?

 

[white_goodman]

 

[boofis]

lol damn you for distractions!

 

[Uncle Festivus]

Let's get 'real'

 

[Uncle Festivus]

We have lift-off.......



Thanks to Transports.......



and a few other facts.......

• volatility is at its lowest reading since June 2007, the month that a pair of Bear Stearns hedge funds blew up.
• by at least one composite measure, aversion to risk is presently at a three-decade low.
• global debt issuance just staged a record year.
• leverage at hedge funds just hit the highest level to start any year since at least 2004
• at the New York Stock Exchange, margin debt among member firms rose in November to the highest level since February 2008””a month before Bear Stearns collapsed

Mom & pop investors want a piece of the action now - all is safe, come back into the water.........

 

[Aussiejeff]

How can the US stock market collapse with NO MORE DEBT LIMIT?

Ooorah! Oodles of cheap debt for all!

So, having eliminated the debt ceiling limit for 3 months the US stock market will undoubtedly soar to new giddy heights.

Guess what.

At the end of those 3 months of cheap debt for all, Congress will decide the experiment has been such a success at artificially buoying the financial market that they will agree to eliminate (ie forget about) debt for a further 3-6 months....then so on ad-infinitum - since by then the real debt level will be so HUGE - to think otherwise would be downright "damaging to markets".

Y'all just gotta love greed. That magic human condition that will lead us all to endless wealth creation.

Enjoy the ascent...

 

[Vader]

How can the US stock market collapse with NO MORE DEBT LIMIT?

Ooorah! Oodles of cheap debt for all!

So, having eliminated the debt ceiling limit for 3 months the US stock market will undoubtedly soar to new giddy heights.

Guess what.

At the end of those 3 months of cheap debt for all, Congress will decide the experiment has been such a success at artificially buoying the financial market that they will agree to eliminate (ie forget about) debt for a further 3-6 months....then so on ad-infinitum - since by then the real debt level will be so HUGE - to think otherwise would be downright "damaging to markets".

Y'all just gotta love greed. That magic human condition that will lead us all to endless wealth creation.

Enjoy the ascent...

This is the 75th time the US have raised their debt ceiling since the 1960's (or there abouts, just going off figures I read in the paper a few weeks ago)... so they're getting pretty good at kicking that can down the road.

Don't worry about the debt ceiling... it's just a number it'll become really interesting once inflation starts taking hold, but until that starts getting to scary heights, there's no reason for the sky to fall down just yet (IMO).

(that's not to say there won't be market corrections, but total collapse is still some way off I reckon).

 

[Uncle Festivus]

Bitter AAPL

 

[CanOz]

it'll become really interesting once inflation starts taking hold, but until that starts getting to scary heights, there's no reason for the sky to fall down just yet (IMO).

(that's not to say there won't be market corrections, but total collapse is still some way off I reckon).

Inflation = less debt

 

[white_goodman]

Inflation = less debt

what happens to interest rates and what happens to the short maturity debt when its rolled over at higher yields?..

 

[sinner]

Inflation = less debt

Your equation is missing a few variables there CanOz, specifically the GDP/Debt ratio.

http://www.lighthouseinvestmentmana...ze-this-the-fed-is-not-printing-enough-money/

The dotted black line is the marginal utility of debt (right-hand scale). Think of it like this: how much additional GDP do you get out of one dollar of additional debt (in %). In 1992, for example, you get $0.30 in additional GDP for every additional dollar of debt.

Problem: this marginal utility of debt has trended lower and lower over the years, and actually reached zero in 2009.

Meaning: you can add as much debt as you want, and it still won’t give you any additional GDP.

To repeat: no amount of additional debt seems to be able to get economic growth going again.

That is a dramatic revelation. We might have reached the maximum debt-bearing capability of the economy. If true, no growth is possible unless debt-to-GDP levels fell back to sustainable levels (in order to restart the debt cycle). This could take years.

At this point, the only way to reset the debt cycle is to get rid of debt.

Ray Dalio correctly describes the three options available:

1. Austerity: this would be painful and take quite some time (the Europeans are going down this path)

2. Restructuring: requires write-downs and losses for bond investors (which are not being allowed to happen for fear of systemic risk)

3. Printing money: Inflation. Better yet: hyper-inflation. You have to destroy the value of debt fast enough before debt service costs, due to rising interest rates, drive the government into insolvency.

 

[CanOz]

thanks for the clarification Sinner!

 

[boofis]

Your equation is missing a few variables there CanOz, specifically the GDP/Debt ratio.

http://www.lighthouseinvestmentmana...ze-this-the-fed-is-not-printing-enough-money/

3. is intriguing, thanks for the quick link and run through.

 

[Uncle Festivus]

The GDP side of the ledger......

 

[white_goodman]

The GDP side of the ledger......

View attachment 50606

worth noting on the BRIC portion its only C holding them up..

 

[white_goodman]

grab this post from another site...

"A sell-off would be required to keep the long term bullish channel going. All sustained trending markets require corrections and retracements - it's a must. In fact, it looks like a probablility that we will sell off given where the market is in relationship to the upper channel line. There will certainly be serious buyers in the 143-145 range at the bottom of the channel. But the sell-off will not deter the bulls until we fail off from the current long term bullish channel - which would be in the 130-ish range. If we spend serious time under the channel, the longs will liquidate and fresh shorts will develop - that would be the scenario that reverses the trend underway since early 2009. The bear trap in mid-2011 left a big mark.

Timeframes. It's all about timeframes. A sell-off opportunity to the retail trader is a buying opportunity for the institutional investor.

Retail types have alot of animosity towards trends, largely because they think they know what a trend is but in reality not so much.

For every upleg in this trend there has been a downleg. And every downleg is the beginning of a bear market proclamation from the retail set. But in the space of three years we went from 70 to 150. Higher highs and higher lows. Classic bullish trend channel.

Maybe the smart thing to do is to let the market fail off on this trend channel and then call it a bear market. That's all I have ever said about this. I'm not hindsight bullish - I am presenting the reality of how the collective prices this market and what they think is fair value. The market is not telling us that it is selling off at the moment. The market is not telling us that a bear trend is upon us. Price is truth."