Dead Cat Bounce - I am 100% VIX and did not TP on friday (!)
Hi folks!
See my linked posts for more information regarding the macro state - I am just mentioning the arguments in bulletts it here:
- The Chinese property crisis in getting worse by the minute - although mainstream media does not care.
- Margin Debt in U.S. accounts is almost 1 Trillion (apx. 4% of GDP !!!!)
- Real income down over 2% so far in 2021 due to inflation
- Index bubble (indexes are much more expensive than they should compared to market in general)
- Central Banks are and/or plans to strap liquidity faster than expected.
- Stock prices assume large GDP-growth in perpetuity, which is impossible with falling real income (70% of GDP comes from retail purchases)
- Terrible technicals (for those that care - and in a frothy market it seems that a lot of market actors do, so it actually has at least some slight predictive power).
= > Everyone needs to spend a bigger portion of their income on living, and thus have to sell stock and/or unwind leverage.
In addition, all are in the same boat since everyone are deep in the green, so it is very easy to sell if the movie stops - implying that massive trampling is very likely.
Do not bet that you are able to be the first one out because you think you are smarter than everyone - that is what everyone is doing right now, and only a very chosen few will get out in time.
DYOR.
NFA.
Never take the word of others as a given, and never take advise from someone without skin in the game.
For the record, I am 100% in VIX futures now, and I did not take profits on friday! (I do not recommend buying VIX contracts now - they should have been bought in the 15-16 range imo.).
I wish you all well :)
See my linked posts for more information regarding the macro state - I am just mentioning the arguments in bulletts it here:
- The Chinese property crisis in getting worse by the minute - although mainstream media does not care.
- Margin Debt in U.S. accounts is almost 1 Trillion (apx. 4% of GDP !!!!)
- Real income down over 2% so far in 2021 due to inflation
- Index bubble (indexes are much more expensive than they should compared to market in general)
- Central Banks are and/or plans to strap liquidity faster than expected.
- Stock prices assume large GDP-growth in perpetuity, which is impossible with falling real income (70% of GDP comes from retail purchases)
- Terrible technicals (for those that care - and in a frothy market it seems that a lot of market actors do, so it actually has at least some slight predictive power).
= > Everyone needs to spend a bigger portion of their income on living, and thus have to sell stock and/or unwind leverage.
In addition, all are in the same boat since everyone are deep in the green, so it is very easy to sell if the movie stops - implying that massive trampling is very likely.
Do not bet that you are able to be the first one out because you think you are smarter than everyone - that is what everyone is doing right now, and only a very chosen few will get out in time.
DYOR.
NFA.
Never take the word of others as a given, and never take advise from someone without skin in the game.
For the record, I am 100% in VIX futures now, and I did not take profits on friday! (I do not recommend buying VIX contracts now - they should have been bought in the 15-16 range imo.).
I wish you all well :)
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