Bulls and Bears Oh My!
Whoa. The back and "froth" is getting heated. We have definitely seen a great rally since Covid lows. Lots of people making money in the markets these days which is great, even though history has different things to say about that...Anyways!
We could be coming up on a correction. Maybe not a bear market, but a correction is what I'm seeing. How big? Who knows. It likely depends on how much home equity the retailers are willing to put up as margin to get long again once the hedgefunds start selling. However, maybe the hedgies are all long now and the bull rally is stronger than ever. And maybe we'll have another 10 years of bull markets. Seems unlikely to me given how we got here. But, stranger things have happened.
Currently, I'm reminded of 2012 when a lot of people were getting nervous about the amount of QE that never seemed to never stop rushing into the markets. And look what happened. It seemed to have worked, right? Is this time different? If so what about this rally is so different. Prices.
Prices are what really underpinned the financial crisis. Specifically, price of oil and price of homes. Risk was sure money, and safety was dumb money. The price of getting to work to pay down those "riskless" loans got to be to much of a burden on the barrower and defaults started happening. Now, there was lots of fraud going on with loans for fictitious homes etc etc. But oil prices fundamentally popped the housing market and the housing market spilled over into the capital markets through the sure money instruments that bet on housing always being strong. Personally the parallels are getting to be a bit much and 2012 is starting to feel less like 2021. Will QE save us? Are prices different and are there instruments out there being sold as sure things at break neck speed?
Personally im getting short. Not 100% short that's pretty insane or courageous haha idk. But, Since end of March i've started building a short position, and am currently 25% short. Now it isnt because I'm betting it all on an insane pop downward, but rather I see it as cheap af insurance if there is a pause on the bull market. And while things get more developed and if inflation isnt an issue time will tell. But the point remains. What is cheap is usually wrong till its not. What is expensive is great till it sucks. It can flip flop so easily. So I tend to buy insurance when its cheap, and go long when it looks like things cant get any worse, only so much house can burn. Glad I got insurance. Personally, what happened to sell high and buy low? lmao. When yolo's buy high and sell higher what's really going on huh? Investment bankers working for their money is what.
To the chart now. Finally, right? Right. I dont think we've seen the ATH under an RSI of 70. So am still happy with some of my long positions, but I'm looking to write calls and take profits when the price is right. At the moment SPY just hit my December PT of 420 so profits are in. I'm not actually looking for SPY to hit 321 before I get back in long, but then again maybe I am depending on what comes to light during the next correction. How's it go? Good things come to those who wait? Ha! Tell that to Crypto kitties and NTF's right!?! No. Easy come easy go. You cant escape the truth of you reap what you sow. Personally I'd be a lot happier with an SPY under 400 than over, especially given the price levels we are seeing across the board. Maybe if Inflation wasn't what it was and maybe if there were less zombie corps I'd get stoked to be long over SPY 400. Time will tell Lets take our lessons where we can find them and keep building our wealth. Best wishes to all the market participants out there!
Not advice. Not recommendation. Everything I post are simply my thoughts and opinions. Please make every effort to understand the risks associated with any security before investing or trading. Let me know what you all think. Ive been wrong before and will certainly be wrong again!
JG
We could be coming up on a correction. Maybe not a bear market, but a correction is what I'm seeing. How big? Who knows. It likely depends on how much home equity the retailers are willing to put up as margin to get long again once the hedgefunds start selling. However, maybe the hedgies are all long now and the bull rally is stronger than ever. And maybe we'll have another 10 years of bull markets. Seems unlikely to me given how we got here. But, stranger things have happened.
Currently, I'm reminded of 2012 when a lot of people were getting nervous about the amount of QE that never seemed to never stop rushing into the markets. And look what happened. It seemed to have worked, right? Is this time different? If so what about this rally is so different. Prices.
Prices are what really underpinned the financial crisis. Specifically, price of oil and price of homes. Risk was sure money, and safety was dumb money. The price of getting to work to pay down those "riskless" loans got to be to much of a burden on the barrower and defaults started happening. Now, there was lots of fraud going on with loans for fictitious homes etc etc. But oil prices fundamentally popped the housing market and the housing market spilled over into the capital markets through the sure money instruments that bet on housing always being strong. Personally the parallels are getting to be a bit much and 2012 is starting to feel less like 2021. Will QE save us? Are prices different and are there instruments out there being sold as sure things at break neck speed?
Personally im getting short. Not 100% short that's pretty insane or courageous haha idk. But, Since end of March i've started building a short position, and am currently 25% short. Now it isnt because I'm betting it all on an insane pop downward, but rather I see it as cheap af insurance if there is a pause on the bull market. And while things get more developed and if inflation isnt an issue time will tell. But the point remains. What is cheap is usually wrong till its not. What is expensive is great till it sucks. It can flip flop so easily. So I tend to buy insurance when its cheap, and go long when it looks like things cant get any worse, only so much house can burn. Glad I got insurance. Personally, what happened to sell high and buy low? lmao. When yolo's buy high and sell higher what's really going on huh? Investment bankers working for their money is what.
To the chart now. Finally, right? Right. I dont think we've seen the ATH under an RSI of 70. So am still happy with some of my long positions, but I'm looking to write calls and take profits when the price is right. At the moment SPY just hit my December PT of 420 so profits are in. I'm not actually looking for SPY to hit 321 before I get back in long, but then again maybe I am depending on what comes to light during the next correction. How's it go? Good things come to those who wait? Ha! Tell that to Crypto kitties and NTF's right!?! No. Easy come easy go. You cant escape the truth of you reap what you sow. Personally I'd be a lot happier with an SPY under 400 than over, especially given the price levels we are seeing across the board. Maybe if Inflation wasn't what it was and maybe if there were less zombie corps I'd get stoked to be long over SPY 400. Time will tell Lets take our lessons where we can find them and keep building our wealth. Best wishes to all the market participants out there!
Not advice. Not recommendation. Everything I post are simply my thoughts and opinions. Please make every effort to understand the risks associated with any security before investing or trading. Let me know what you all think. Ive been wrong before and will certainly be wrong again!
JG
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