The market will not do a serious correction without a great retreat from bear funds.
I think this might be a great market starting with low volume and low inflation due to ecnomic slow down. Interestingly, I did not see any slow down. Maybe a great acceleration this quarter. So I am really confused here.
The market rally because of a "fake" slowdown, which solves all the troubles of market and economy.
Though the market can be up, SPX to 1360 or 1385, it is more and more likely to be up to a quick and sharp down. There are some histories going on there, in 1926 and 1987.
I tend to believe that the current situation, even if the fundamental of market is good, should do a correction. Its current reaction is technical instead of fundamental.
Let us think the correction of normal bull market.
Everyone buy the stocks to expect a good return by in future selling the stocks. The market is up and the first one makes the greates return since he bought at the lowest price. As the stocks ceases to be up or become to drop. The guy take profits and later buyers found that the stock is drop and many of them do the same. New buyers stop loss and potential buyers hold the cash wait for the bottom. That is correction you see since there are many future sell since buys have been executed.
This year, we have many shorts and the bull cash funds has little flow in. What happened? The sellers first sold the shares and then they wait to buy. In other words, there are so many buyers here. Ok. When the market is up from a bottom, some sellers may have some shorting profits. They lock in and covers. The market is up. Many of the other stop loss and so on, short squizz. In other words, if the market is going to be down, it needs loyial buyers, who waits to sell in future. More and better.
So what would happen next? The cash flow for bear funds increase even in the recent two weeks. Do you belive it?
Because more and more people think that the market is going to be down since ecnomic slow down and the market is way too high. So what will happen? The market does not generate a consistent selling pressure/interest, as I mentioned in the first case. The market will be down when the bear funds accept their failures and cover their shorts. This would be a great boost in the market and then the market is too high. Buyers are not going to buy at such a high price and there is few shorts to covers. The market will be crash. Period. So what? Market crash.
I think this might be a great market starting with low volume and low inflation due to ecnomic slow down. Interestingly, I did not see any slow down. Maybe a great acceleration this quarter. So I am really confused here.
The market rally because of a "fake" slowdown, which solves all the troubles of market and economy.
Though the market can be up, SPX to 1360 or 1385, it is more and more likely to be up to a quick and sharp down. There are some histories going on there, in 1926 and 1987.
I tend to believe that the current situation, even if the fundamental of market is good, should do a correction. Its current reaction is technical instead of fundamental.
Let us think the correction of normal bull market.
Everyone buy the stocks to expect a good return by in future selling the stocks. The market is up and the first one makes the greates return since he bought at the lowest price. As the stocks ceases to be up or become to drop. The guy take profits and later buyers found that the stock is drop and many of them do the same. New buyers stop loss and potential buyers hold the cash wait for the bottom. That is correction you see since there are many future sell since buys have been executed.
This year, we have many shorts and the bull cash funds has little flow in. What happened? The sellers first sold the shares and then they wait to buy. In other words, there are so many buyers here. Ok. When the market is up from a bottom, some sellers may have some shorting profits. They lock in and covers. The market is up. Many of the other stop loss and so on, short squizz. In other words, if the market is going to be down, it needs loyial buyers, who waits to sell in future. More and better.
So what would happen next? The cash flow for bear funds increase even in the recent two weeks. Do you belive it?
Because more and more people think that the market is going to be down since ecnomic slow down and the market is way too high. So what will happen? The market does not generate a consistent selling pressure/interest, as I mentioned in the first case. The market will be down when the bear funds accept their failures and cover their shorts. This would be a great boost in the market and then the market is too high. Buyers are not going to buy at such a high price and there is few shorts to covers. The market will be crash. Period. So what? Market crash.
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