snapVIEW IT is Monday
Good morning, and thank you to everyone who took up the special offer. Well done on locking that one in.
Following on from Saturday's comments, stock markets could be in big trouble this week. There is no doubt that growing concern over valuations, brought into focus by actual dramatic price falls so far seen, will continue to weigh on markets.
People will be looking to today's China data, and the Federal Reserve this week for fresh hope. The China data is likely to be firm, though not impressive, while the focus on the Fed to solve all, seems to me, to be more like a mental illness than true economics.
The market will try to hold on this week, but I think it is fighting a losing battle.
Israel is going back into lockdown, France records largest number of cases since coming out of lockdown, and the crises roll on. We are all becoming a tired and even immune to news on the virus, but the reality of its impact on the workplace, and therefore productivity and profitability around the world is undeniable.
There is no miracle economic rebound. Such plots exist only in the fiction of stock market rallies.
Mulan underwhelms in China for a variety of reasons, but any US company generating new product in China at the moment, is definitely going to struggle due to the poor relations between the two countries. A bit like Australian products too. I have not seen the movie yet, but I will give you a quick review when I have.
Have a very good day everyone,
snapview It is Saturday
Just a quick note, as stocks closed in New York
looking very bearish for the week ahead.
I really want to emphasise how important it is, no matter your industry, to take note of my Nasdaq Special Report from Thursday. Available on the website home page.
If correct, and unfortunately I may well be, this will flow through to the Australian market very quickly. We are short. Aggressively so. The greater concern I have however, is that the people of the USA have already had so much trauma this year, and with lost political leadership, that if they were to suffer yet another major blow in the form of a yet again serious stock market melt-down, especially with broad participation in the market at record levels, on top of no jobs, reduced business activity and a still spreading virus, they may be forced to, let alone choose to, totally stall out economically speaking.
Now that is a long sentence, but I think it is necessary to encapsulate what is going on and is at risk here.
This is all before a possible Biden victory, or either candidate really, post the election we will see people slow their activity even further in a watch see approach to the new Presidency. Whoever it is. It doesn't matter how low interest rates are, or what stimulus is already in the economy, if consumers stop spending, if businesses stop investing, the economy will crash again. The self-fulfilling spiral may be too great to halt this time.
This is not just a very bearish outlook,
it is unfortunately a very realistic one at this point.
A further 10% to 30% decline in stock prices, is a very real possibility, and indeed the most likely scenario moving forward from here.
It is better to be prepared than to be taken by surprise.
The exact same scenario will unravel the Australian economy as well. Slight variances such a the Victorian situation, borders being closed and a prolonged reduced level of activity in China, as well as less inclination to buy Australian resources, will all weigh heavily. We are in a much stronger position than the US, but the afore mentioned factors will be impactful.
We are short the US and Australian markets, but please consider your own industry and investments in the context of the above very real scenario.
snapVIDEO IT IS THURSDAY
SNAPVIEW: IT IS WEDNESDAY
Protect your business. Be active in markets.
Good morning everyone, and unfortunately exactly our road map for resumed economic moderation, even weakness, around the world and particularly in the USA is now underway.
This will mean significant further human stress and tragedy worldwide. This from one of the world's great optimists, who was bullish for the past decade when few others were. So, I do not say any of this lightly. What we have to do is spread the word so others prepare appropriately, and act to protect our own situations. I see our very well established short positions for members as a hedge against the economic downturn.
The outlook remains very much for the stock market to continue to price out all the false exuberance and speculative highly leveraged long positions of the recent new wave of market participants. Major fund managers will be in no hurry to support this market. Whoever decides to buy the dip, may well have further bear attacks to deal with. I do not see this rout as being over by any means. Down 10% in a few days, is still 10% to 20% overvalued.
As the economic data continues to show a faltering of the previous recovery phase, confidence will become increasingly difficult to come by.
Defence in business/high activity to protect investments, is the only path forward.
all the best for your day,
SNAPVIEW: IT IS TUESDAY
CHINA AND PRESIDENTIAL CHALLENGES
Good morning everyone, New York trading will be back today, and with the macro situation, if anything having deteriorated, any rally should be short lived. The price action itself is a warning bell to even the longs, that something may be amiss,
We remain steadfastly of the view that the global economy, USA among the worst examples thereof, will not be returning to the same level as previously for another 1-2 years. The stock market has been way too enthusiastic. The stretch between the fundamental reality on Main Street, and the foolishness of Wall Street, is likely to be narrowed through stock price decline.
It is also the first occasion, where BOTH PRESIDENTIAL CANDIDATES ARE A NEGATIVE FOR THE ECONOMY AND MARKETS! Trump is now going even harder on the idea of reducing economic ties with China. This will not be good for the global economy.
Overall, continued global supply chain disruption, extreme un-employment and the loss of income and wealth on Main Street, point to a disconnect from Wall Street that could see stocks come thundering down. A Tuesday bounce is possible, but it may not last long.
all the best for your day,
Trump announces reducing
economic ties with china
SNAPVIEW MORNING COMMENT
IT IS SATURDAY: WE ARE MAKING MONEY BEING SHORT STOCKS AND COMMODITIES.
Good morning everyone, and it is a good trading result.
2019 was the best year ever for the signals service, and the past week has been perhaps the best week ever. Which is nice, because in between we had a drawdown period during the covid crisis, and a severe drawdown in private trading at the end of last year. I am speaking of trading performance today, because that is afterall, what we are here for. To both develop our intellectual journey through the research and opinion provided, and then to take that step higher to trading performance. It is also for me, a quantitative confirmation of the value of the views and economics I provide, and not to be just another talking head with no accountability.Â
Fundamentally, the USA is in big trouble. The jobs data was as good or better than expected, but new employment was about one fifth due to census and temporary government jobs which will no longer be there. The bounce is also not to where we were before. The US has probably regained about half the jobs lost, which is still a dire situation.
The general economic outlook globally remains the same as I stated very early, that of on-going 'economic suppression'. Most severely so, in the USA. With both Presidential candidates now looking to be a negative for the economy and stocks, markets will remain in serious trouble and potential decline for several months to come.
The aberration was the space high stocks, not this just beginnings of a fresh lasting down wave in stock values.Â
Have a great weekend, the world is indeed full of opportunity,
US Industrial output rolled over significantly in August. Just as forecast.
This is is indicative of what is happening throughout the world.
Post initial bounce back and relief euphoria, the reality of still fewer jobs, less income, lower productivity, and prolonged uncertainty, all tend to eat away at the desire for consumers to spend and businesses to invest.
Meanwhile, the stock market has priced in the biggest economic boom in history. Completely at odds with Wall Street. Due to the artificial interference of near zero rates and massive stimulus debt. Everyone, from government to corporation, to individual, has borrowed like never before, for the other side of a recovery that is fast evaporating.
The colourful stage production of low rates and debt is setting us up for a significant market collapse.
Daily rallies sound impressive on their own, but in the context of recent price behaviour are modest and within this wider range of the moment. As highlighted in my Scary Nasdaq video, we are not out of the woods yet.
There could be an extended period of consolidation around current levels in all markets generally. Beware though, that the Australian stock market remains particularly vulnerable.
A bounce today is no bull market.
US Industrial Production
US Industrial production pulled back to 0.4% in August as the initial catch up of back orders phase approaches completion.