DJI (Wall Street): Pattern in the chaos.
Mis à jour
In this chart I show a tight summary of what's been happening with the DJI (Wall Street). I apply the theory of curves. It shows weakening momentum in its north side drive.
I refer to just a handful of fundamental issues for both the bulls and the bears. In recent times various forms of 'stimulus' has kept this market afloat. Then in the last 2 weeks, hope and greed surrounding the Consolidated Appropriations Bill 2021, gave some life but volatility in the market.
This evening (2020-20-23), there is nervousness because the Bill was referred to by POTUS as "a disgrace". That is a real cause for nervousness because POTUS has snookered himself i.e. if he doesn't veto the Bill. This is a matter of law and politics but entirely relevant to market volatility. I take no sides. All I know is that there is money to be made (and lost), wherever there is volatility.
But anything is possible, they say in these markets.
It's probable that price can move up as well as it can correct down. The main job of a trader is not be to right, but to limit how wrong s/he might be with controlled affordable losses. The other nice part of the job is letting winning positions run when the market is in his/her favour.
It's so simple - but NOT easy, obviously. 😄
Disclaimers: This is not advice or encouragement to trade securities on live accounts. Chart positions shown are not suggestions. No predictions and no guarantees supplied or implied. Heavy losses can be expected if trading live accounts. Any previous advantageous performance shown in other scenarios, is not indicative of future performance. If you make decisions based on opinion expressed here or on my profile and you lose your money, kindly sue yourself.
I refer to just a handful of fundamental issues for both the bulls and the bears. In recent times various forms of 'stimulus' has kept this market afloat. Then in the last 2 weeks, hope and greed surrounding the Consolidated Appropriations Bill 2021, gave some life but volatility in the market.
This evening (2020-20-23), there is nervousness because the Bill was referred to by POTUS as "a disgrace". That is a real cause for nervousness because POTUS has snookered himself i.e. if he doesn't veto the Bill. This is a matter of law and politics but entirely relevant to market volatility. I take no sides. All I know is that there is money to be made (and lost), wherever there is volatility.
But anything is possible, they say in these markets.
It's probable that price can move up as well as it can correct down. The main job of a trader is not be to right, but to limit how wrong s/he might be with controlled affordable losses. The other nice part of the job is letting winning positions run when the market is in his/her favour.
It's so simple - but NOT easy, obviously. 😄
Disclaimers: This is not advice or encouragement to trade securities on live accounts. Chart positions shown are not suggestions. No predictions and no guarantees supplied or implied. Heavy losses can be expected if trading live accounts. Any previous advantageous performance shown in other scenarios, is not indicative of future performance. If you make decisions based on opinion expressed here or on my profile and you lose your money, kindly sue yourself.
Note
POTUS has put a spanner in the works by refusing to sign off the Consolidated Appropriations 2021 Bill. That means there is trouble in the system for Americans. The currently agreed sum is $600 per person. It does not say per person per week or month. It seems to be a one off payment. This is on a sliding scale and an annual normal earning up to $75,000/annum. A married couple with 2 child dependents will get $2,400 maximum. I honestly can't see this as a significant sum of money.
This is a good article with a calculator cnet.com/personal-finance/5-ways-your-second-stimulus-check-could-be-smaller-than-other-peoples/
Anyways POTUS has dug in so it seems like no go, unless Congress can move quickly enough to override POTUS.
The Bill was important in lots of other areas. The markets were gagging for 'stimulus' at the close on Thursday. So I'm getting my popcorn ready to see how it goes at the next market opening.
Weekend Wall Street has been stuck at between 30201 and 30192 - that doesn't look good.
Note
Having called the $600 payment 'a disgrace' and holding back by going off to play golf, POTUS has signed into law the Appropriations law. I'm not interested in his reasons.The market has charged north like no tomorrow. But be cautious in interpreting that as caused by the signing of the Bill. How?
It is known that speculators - alias gamblers with big dosh - throw money in the market in the 6 days post Xmas. They bet on what's known as the Santa Claus rally. It's been a consistent thing mostly for many years.
The big exception was 2008-2009. Well what we're experiencing in this pandemic puts anything of the recession of 2008-2009, in the dark. Furthermore, the market is filled with far more 'air' than back then.
The above statement is not one of hope for a crash. The probabilities are just not adding up to me, for a moonshot. But on the other hand the FED has far more ammunition in its store. So anything is possible.
Note
Well, I'm just reading that the new law may be altered to provide $2000 in helicopter money. And the 'gurus' are now working it out that that's likely to do very little. You don't need to be a guru to work that out. Plain old common sense could tell you that.
Enter new variants of the virus. I've seen no reports from the USA at this time of new variants over there. But I'll wager that they have landed - just being kept a closely guarded secret. Nope - I don't believe that they just 'don't know', or that the virus decided not to mutate in America.
Variants VUI-202012/01 and B117 lineage have been found in the UK. The latter is mostly responsible for the surge to 41,387 new infections today (2020-12-28).
UK variants have been picked up in about 12 countries at 26 December. That means the probability of spread has happened already.
The South African variant 501.V2 has gone on to become even more infectious.
P681H was identified in Nigeria.
WHO reported nine cases of a new variant detected in Denmark.
What that means is there is more trouble ahead. Fiscal stimulus has underestimated the financial impact of the viruses versatility. That doesn't mean the stock market is gonna crash. Oh no - the FED will fight to disallow that! Right? 😉😄
Note
At this snapshot - greed has taken it higher. But one thing is clear to me: this is not a healthy bull market. Note
Cuhrazy stuff! youtu.be/wAdkv5R4Zos?t=177Note
There was a bit of trouble today. Note
Watch this space: 'wealth taxes' are on the horizon, not just in America. Some don't know what that means. Nope - it's probably not about you who reads this. But it could affect stock indices and forex. You don't have to believe me. Google is your friend.
FED balance sheet 42% of GDP @ 2020-01-26. Does money have value anymore? [Different perspective on the virus youtu.be/NjTdvALChwk ]
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