Sods law I nearly put a video up about this this morning, I would have looked like a right smart ass, never-mind guess it was 50/50 I could have looked like a plonker.
So just like most people I have been concious of the price of oil, stocks and the Fed lift off, which of course occurred yesterday. I had been on the sidelines for the week not wanting to walk in front of the proverbial bus but the bus didn't come, perhaps it's late?
It was my understanding that the general consensus was that the Fed raising interests rates would be a clear indicator of their confidence in the US economy but the S&P500 only moved 300 odd points, an average-ish bar. I appreciate there was something like a 90% chance of them lifting and a lot was priced in but this felt a little pathetic. So yesterday my feelings were swaying to either, 1. investors didn't have much confidence in the economy or 2.much confidence in the Fed. Neither of which filled me with joy.
In fairness I am undoubtedly swayed by my own opinion as I don't have much faith in the US economy or the Fed. It's my belief that the huge (stock) rally has been caused by cheap money not demand for products, otherwise we would be seeing inflation which is still anaemic for everything in the US with the exception of commodities (oil excluded of course).
IMO:
This all makes me a grisly (and grumpy) bear. I guess I'm thinking that there only needs to be a small something to push that rock over the cliff that will crack that ice shelf , that will slip into the sea and cause that tsunami. We thought it might be China but that seems to have cooled at least for the time being but OPEC might just be it. I appreciate they're playing the long game, keeping up production until non-OPEC oil producers slow at which point oil prices will rise on reduced supply and OPEC will be able to profit as demand matches then exceeds supply, you've got to love how they keep things simple. But they may well be playing with fire (convenient pun) . If the world economy crashes again surely demand for commodities will remain lower for much longer.
Is the end nigh, no I'm probably just high from the No-More-Nails I resorted too when putting up the blinds this afternoon. But the day ended in my favour, a big red candle taking out all of yesterday's gains and a bearish engulfing pattern to boot. I might test the water with a short. Technically my method is telling me to sell in the short-term anyway.
S&P500 D1 chart, Note Bearish Engulfing Pattern at Resistance far right.
So just like most people I have been concious of the price of oil, stocks and the Fed lift off, which of course occurred yesterday. I had been on the sidelines for the week not wanting to walk in front of the proverbial bus but the bus didn't come, perhaps it's late?
It was my understanding that the general consensus was that the Fed raising interests rates would be a clear indicator of their confidence in the US economy but the S&P500 only moved 300 odd points, an average-ish bar. I appreciate there was something like a 90% chance of them lifting and a lot was priced in but this felt a little pathetic. So yesterday my feelings were swaying to either, 1. investors didn't have much confidence in the economy or 2.much confidence in the Fed. Neither of which filled me with joy.
In fairness I am undoubtedly swayed by my own opinion as I don't have much faith in the US economy or the Fed. It's my belief that the huge (stock) rally has been caused by cheap money not demand for products, otherwise we would be seeing inflation which is still anaemic for everything in the US with the exception of commodities (oil excluded of course).
IMO:
- Stock prices inflated due to high demand. Why would you buy bonds when you can buy stocks with cheap money, huge more upside and practically zero risk thanks to the Fed QEing itself into a coma.
- But CPI(inflation) is not rising because there is no real increased demand for consumer products.
- While energy prices are rising not due to demand but cost-push inflation as energy becomes more expensive to produce.
This all makes me a grisly (and grumpy) bear. I guess I'm thinking that there only needs to be a small something to push that rock over the cliff that will crack that ice shelf , that will slip into the sea and cause that tsunami. We thought it might be China but that seems to have cooled at least for the time being but OPEC might just be it. I appreciate they're playing the long game, keeping up production until non-OPEC oil producers slow at which point oil prices will rise on reduced supply and OPEC will be able to profit as demand matches then exceeds supply, you've got to love how they keep things simple. But they may well be playing with fire (convenient pun) . If the world economy crashes again surely demand for commodities will remain lower for much longer.
Is the end nigh, no I'm probably just high from the No-More-Nails I resorted too when putting up the blinds this afternoon. But the day ended in my favour, a big red candle taking out all of yesterday's gains and a bearish engulfing pattern to boot. I might test the water with a short. Technically my method is telling me to sell in the short-term anyway.
S&P500 D1 chart, Note Bearish Engulfing Pattern at Resistance far right.
