Among all the important stuff, S&P 500 has been what i have been following for the last 3 years, keeping a close eye on, most of the times, boring movements in DXY and sometimes the VIX alongside the housing markets in Canada & New Zealand and lastly AUD. i do not know why only all these together could help form a sense and understanding of the markets for me as to when the markets were going to get interesting and acting the way they have in the last three months.
finally, where i think we needed to be:
housing markets have been ridiculous in Canada & New Zealand. the prices in terms of figures made me feel like we are in a third world country where the prices keep rising at double digits and never correct and fall meaningfully. it felt like we were not talking about Dollars but 80s South American Pesos or something. and now the AUD is on the brink of killing the 2008 barriers and go towards 2001 levels. oil is where it needs to prove its irrelevancy after breaching the 24 dollar level. all thanks to the utmost instrument; DXY . along with the VIX which is very close to surpassing the 2008 December highs. DXY, the which i would say i can not be any more certain ever in my life that it is going to build upon this cross that it has, on the monthly and make a confident run towards the 2001 levels and surpass those and target the pres. Reagan, 1985 highs but the latter in a more distant future.
S&P 500 may be sitting where it is only for couple of more months and swing a lot lower, contrary to the prevalent belief that very good opportunities are emerging to go in for a long term view on stocks, as it is targeting the 1530s, 72%ish correction of the lows to the highs.
why is it or what is it, you might ask; ask politicians who pose as they really understand what is going on. i would humbly think, nobody knows just yet what this is and what the true dimensions of this are. they are shutting borders. who knows how to confront this. maybe a concerted effort to combat this pandemic can bear more.
in my experience in the markets, almost 15 years which is absolutely nothing, but going back to the last 120 years, i would think, given this kind of market disruptions, this thing is searching for blood, victims or sacrifice, if you will. i do not know what it is seeking, but until a substantial name/ names fall, or major event as far extreme as a capitulation of a community, city, nation, society takes place, it just may not stop. the highest medical officials ringing such alarms. who knows who has made this for whom. we are damned if it is managed, and we are damned if it is not. because if it is man-made by one targeted at the other, then we need to brace for retaliation and if it is accidental, we are in for an unknown outcome.
now, let us bring our focus back on to the markets: markets fell even though the Fed. Res. announced all it did announce. why? because, it just has to fall until 1530s levels. until AUD establishes a new historical low. until the housing in Canada & New Zealand have dropped 40%. until DXY has breached briefly or surpassed the 120s level comfortably and back below it. until movements in crude is non event any longer. i am so confused on Gold, i could only tell it takes longer then anything else to fall. but fall, it shall, all maybe oddly because deflation is the new theme. and how long for all these to take place; probably by mid 2023. this will all be achieved and wrapped up.
in closing, i am afraid, whoever says, let us take a deep breath and keep a cool head; they are probably totally lost looking elsewhere for the comfort they are seeking by offering it as the confident and insightful rich grand father every body needs now. but if you are looking to make money, there is a lot to be made for a long time, three years, by going long the USD against almost everything even the Japanese Yen. just use small leverage as you can go for big swings.
happy tradings.
