Jump to content

A uber bearish interview with David Stockman

Recommended Posts

David Stockman is brilliant, unfortunately as stated before markets can stay irrational longer than you staying solvent. If we start seeing in Europe a move away from QE which i do doubt, then you will see a very big correction, since that is what is holding these house of cards in a upright position.  

Link to comment

I don't think we will see the straw that breaks the camel's back until we look back on the carnage , that is the very definition of a black swan event.  Even then I suspect it will not be any one obvious thing, like an election result or a Fed rate rise but rather just that reality will dawn, slowly, that this particular market bubble relies on the emperors at the central banks to continue spinning the plates and that the emperors have no clothes on...


At some point the alternative voices like Stockman will be joined by sufficient mainstream voices to cause a tipping point.  So far this current "correction" is off the election risk and Fed rate rise risk narrative rather than the true bubble issue (at least in the mainstream).  If the election is seen as a "so what" event, which it is either way in my view, and the markets shrug off a Fed rate rise, which they did last time, OR no such rise materialises due to sufficient doubt about the data (series of low NFP prints anyone?) then the markets could easily revert to the "Central Bank Put" because the alternative is too awful for the fee earning spivs to contemplate.


Imagine what the technicals might look like, here is the S&P as an example:


If the current market Top is actually a wave 3 (pink) then the current bearish move can Drop quite far without negating a higher high set up and a turn around the Fib 38% (blue) from the Feb 2016 low (coinciding with the Fib 76% - green - from the end June 2016 low) and could also be at the descending trend line (hashed blue) which, if the market rallies back to a fresh high, would result in an expanding Triangle formation (highly bearish in this case but only after a fresh all time high).  Such a formation is rare but the Central Bank bubble would be the right kind of situation to see such an outlandish set up.


With everyone clamouring for a large correction I can't help feeling that this is not it and even if it is then we will see a wave 1 followed by a strong retrace rally in wave 2.  I must admit I favour that latter and deep down I hope that it is so we can get on with it but can't discount the former and don't want to get caught in a Bear trap.   Either way Santa Claus rally anyone?  NY2017 seems like a better bet to me.


Link to comment

True Mercury. I do think this is a complete overreaction to a potential Trump Win and therefore the market is just pricing it in, but once the election is over regardless of the result, the Fed will be heavily in focus, of course any external influences may suggest otherwise. I will be looking to possibly Buy the index on the FTSE100 possibly after the election. Right now its market jitters and without doubt oil is having a heavy influence. 

Link to comment

When the crowd are all on one side of the boat it either capsizes of they start to shift to the other side.  Looks like the beginnings of a shift to me rather than a capsize.  Even if The Donald wins on Tuesday/Wednesday I doubt we will see a full on capsize, although we will probably see a surge back to the downside for a while.  However commodities (other than Gold perhaps) march to the beat of a different drum so if, like me, you feel this is a potential turning point for a rally then the other noise is not bothersome to trade Oil and copper. 

Link to comment


This topic is now archived and is closed to further replies.

  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 11:53

    Newest Member
    Joined 28/01/23 09:29
  • Posts

    • Capital, win loss ratio. If you have a trading edge and you can consistently win 50% of your trades, so your winning 5 trades out of 10. So if your risking 1% of your capital per trade, out of your 10 trades 5 would be losers, so that’s 5% loss and realistically out of the 5 winning trades, some would make small profits, some break even and 1, 2 or 3 could run nicely IF you can let your profits run, basically your making money out of 2 trades out of the 10 trades (80/20 Rule Pareto principle) So a $20,000 acct risking 1% is $200 per trade, this will keep the trader with his trade risk based on being able to win 50% of his trades. A long term trend trader can win with 30% wining trade. Basically you need to know your numbers. Rgds Pete
    • Investing in stocks can be a great way to grow your wealth over time. However, there are different approaches that investors can take when choosing which stocks to buy. Two of the most popular approaches are growth investing and value investing. Growth Investing Growth investing is an investment strategy that focuses on buying stocks of companies that are expected to grow at a faster rate than the overall market. These companies are often in industries that are growing quickly, such as technology or healthcare. Investors who use this approach believe that these companies will be able to generate higher profits in the future, which will lead to higher stock prices. One of the main advantages of growth investing is that it can potentially provide higher returns than the overall market. However, it is also riskier than other investment strategies, as these companies often have higher valuations and more volatile stock prices. Value Investing Value investing is an investment strategy that focuses on buying stocks of companies that are undervalued by the market. These companies may be in industries that are out of favour or have recently experienced challenges, but they have strong fundamentals and a history of profitability. Investors who use this approach believe that these companies are undervalued and that their true value will be recognized in the future, leading to higher stock prices. One of the main advantages of value investing is that it can potentially provide lower risk than growth investing. However, it may also provide lower returns in the long run, as these companies may not have the same growth potential as companies in the growth investing category. Comparing Growth and Value Investing Growth and value investing are two different approaches to stock investing, each with its own advantages and disadvantages. Growth investing can potentially provide higher returns but is riskier, while value investing can provide lower risk but potentially lower returns. An investor may choose one approach or a combination of both. A portfolio that contains a mix of growth and value stocks can provide a balance of potential returns and risk. Conclusion Both growth investing and value investing can be effective ways to invest in stocks. The key is to understand the potential risks and rewards of each approach and to choose the one that aligns with your investment goals and risk tolerance. Analyst Peter Mathers TradingLounge™ 
    • I am a beginner, and I must say, there are a lot of rules to the trading game that one must abide by if they want to be successful.   Here, the writer mentions several basic rules for day vs swing trading.  However, I find that often times, the reasoning for these rules is not as  obvious for a beginner as it may be for an expert.   The 'why' factor if I may. For example, why must you have a large capital to trade with as a day trader? Because your positions must be large so that a small change in price will be augmented and turned into a large profit. Also, with such high risk, the margin will be specially high, given the trader is taking up large positions at a time.  Without a large amount of capital, positions may be forced to close due to funds being below margin requirements.  When this happens, you can expect to lose tons of cash, fast.  I learned the hard way. All the best, David Franco      
  • Create New...