Jump to content
Sign in to follow this  

Where's the market correction?

Recommended Posts

Here we are in mid November and the predicted market correction in US equities has so far failed to materialise. Market exuberance has continued and new all time market highs registered. The trade disagreements with China and the EU continue unresolved, climate continues to change (despite many deniers), Honk Kong continues in open revolt to China's heavy handed manipulation, the Middle East still foments discontent, and Trump is being impeached and yet the markets are unmoved.  Some kind of optimism. How long can this last? Is the only way really up? Frankly I want whatever Optimism Plus the Bulls are on, as I am still scratching my head on the thorny issue of relentless, unchecked expansion and ever increasing equity values built on  the earth shattering 2% increase in GDP.  Either my slide-rule  is chronically misaligned  (+2% gdp=+14% equity increase since Jan 1st 2019) or this unchecked Bullishness is veering on arrogance or good old fashioned financial myopia.  Or too much of a good thing.  

Of course, this could easily continue on until the cows come home or Trump gets re-elected, whichever is sooner. Or not. 

There is still a cogent argument for maintaining a hedge in this scenario, as witnessed in the gold price. Gold is high, as are equities and the demand for government bonds remains healthy, which is unnerving in itself (it's normally 2 out of 3). Even Lumber has reached its fair value.  My point being this situation cannot be relied upon to continue in the medium term. Something has got to give.  But how long? Christmas? Easter?  Next election? Depends on the Presidents sanity, I guess.  The Market Correction has failed to materialise, it is either late or is going to skip this cycle completely, or it's gone on one of those yogic retreats or said it's gone on one of those yogic retreats but has actually gone golfing. With the President.

 

  • Like 1

Share this post


Link to post

The Trump impeachment hearing is turning into a joke, when the 2 'star witnesses' were asked just what they thought Trump should be impeached for neither could answer, their 'evidence' turns out to be second and third hand which they said was often more reliable than first hand evidence ...jeez.

Open interest in the indices is still low, the big fund mangers are still waiting, Trump could end the trade dispute tomorrow if he wanted, in which case retail sales, indy production and GDP would take off.

So there is just as good a case for a restart of the bull market after 18 months plus of consolidation as there is for any correction down and the market looks to be playing a waiting game sitting on the highs currently rather than the lows so optimistic rather than pessimistic.

I do agree with your last para @786Trader

  • Like 2

Share this post


Link to post

Agree the impeachment is turning into a bit of a farce. It is one thing knowing what occurred and quite another to prove it, as the proceedings show. Impeachment does not work, often has the reverse effect. 

Also, I concur, the trade war is entirely Trumps making and he could end it today if he chose. I might also suggest the past 18 months have more than consolidated the markets; they have consistently broken all time highs.  We are witnessing the top of a cycle,  yes it could kick on and break out into the stratosphere, but not for long. Sooner or later, for better or for worse, the basic tenets of global free market capitalism will be questioned with regard the continued wholesale exploitation of our planet's resources and people, regarding long term sustainability. Thorny issues indeed.  The easy way is to ignore/avoid and hope for the best. 

  Not to mention global real politic having an effect on US equities and commodity prices, thereby validating the watch and wait strategy.

Thanks fo the interesting and informed  comment (as usual) and I wish you a fine evening.

  • Like 1

Share this post


Link to post
45 minutes ago, Caseynotes said:

Trump could end the trade dispute tomorrow if he wanted

If that's true, then he is a massive a-hole (I assumed the media was laying blame on him to avoid the complex reality of the forces pulling the strings behind the scenes, just like how Dubya was an idiot puppet president).

Bernie Sanders or bust :D

 

Edited by dmedin
  • Like 1

Share this post


Link to post
3 minutes ago, dmedin said:

If that's true, then he is a massive a-hole (I assumed the media was laying blame on him to avoid the complex reality of the forces pulling the strings behind the scenes, just like how Dubya was an idiot puppet president).

Bernie Sanders or bust :D

 

The important point all along was perpetual intellectual property theft, everything else was just dressing. Interestingly China a few days ago signed an agreement with the EU regarding IP rights but I have not had a change to go into it yet. 

Share this post


Link to post

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

  • Member Statistics

    • Total Topics
      7,868
    • Total Posts
      41,598
    • Total Members
      51,893
    Newest Member
    dfdfdf
    Joined 12/12/19 10:21
  • Posts

    • Hey @dmedin, our analysts did a piece on this yesterday you might be interested in.  https://www.ig.com/uk/news-and-trade-ideas/what-will-happen-to-the-premier-oil-share-price-after-the-electi-191210
    • They are expecting a good Christmas and will be opening a new robotic 🤖 warehouse in 2021.  So it looks good for a wee long.  🐮
    • When looking at these markets and the trading behaviour of the average retail trader it seems to me that many don't really understand the market they are trading, there are also psychological factors that influence decision making to the detriment of trading success. If you are not confident in your understanding of the market then you are solely dependent on technical analysis but TA is not a given, it can only play out if assisted by fundamental and macro factors, those factors currently point to bull continuation. So the US major indices are routinely hitting new all time highs, the retail trader thinks they need to sell the high in order to buy back lower (buy low sell high right) so the retail trader (the crowd) are constantly trying to pick the tops (and patting themselves on the back thinking they are being contrarian). The positioning data of IG clients tell us this is exactly what's happening. Every time price goes higher the sell position ratio increases, when price is falling in a down trend the buy position ratios go higher. So clearly this is all wrong, when price is continually rising you need to buy high and sell higher. You buy breakouts or pullbacks, you should not be looking to sell a bull trending market at all. So why do they do it? The market is too high (no it's not), it must be the bears turn (wait and see first), but I need to sell the highs, the saying says so (no, you're not an investor), the chart is looking 'toppy' (just no), the TA is pointing down (doesn't matter without fundy and macro assist). An understand of a market comes with experience, until it does stick with the basics and look for longs in an uptrend, don't try to second guess the market and end up constantly fighting against it.
×
×