Implosion OR... Is Market Going Higher?
From Greg M
Lions and friends…
I am getting SLAMMED with people writing to me who firmly believe that the market is going to stabilize and go higher, MUCH higher. In fact, I just heard from someone I respect who has been trading for more than 30 years! And he believes that the market will stabilize and rip higher.
What do we know for sure…
Up until last week the debt market was rock solid stable, in a slow controlled slope higher.. Then we got an uncontrolled spike in the 10 year yield, several days of it- GAME CHANGER.
Ok… we understand that the ECB is deploying “emergency tools” to stop “fragmentation” from occurring in the debt market- we also know that the Fed. MUST follow suit.
Is it possible that the debt market can stabilize in the short run? YES.. but does that mean that the issue is fixed? NO.
We also know that any action by central banks to “stabilize” the debt market is highly inflationary.
Sure, it is possible that the market rebounds… anything is theoretically possible.
But with that said, I still believe that commodities are the right spot to be in here. We can ALWAYS re-allocate cash back into equities/stocks if need be..
For now, I am sitting tight in commodities.
GM
A bear market rally wouldn't surprise me in the next few days, perhaps tomorrow or early next week.
The trend is still down though.
I'll stick with commodities.
They possibly just tested the waters this week. The crash might be scheduled for Sept/Nov when all the story lines merge.