见仁见智

The Worst ever...

I could go on, but you get the message: These markets are extremely oversold with readings seen either at bottoms or at points where significant counter rallies have emerged in the past.

But where is the financial crisis?  I see slowing growth and concerns about a coming recession, all of which is true, but I’ve yet to see evidence of a financial crisis.

What I do see are markets that dosed out on a tax cut and 10 years of artificial liquidity and are now paying the price for excess optimism. Now it’s hangover time and when you’re hungover every bit of noise makes a headache worse. Time to sleep it off and let markets heal and this is the process I expect markets to undergo once things calm down a bit.

As of now, we have massive imbalances to the downside and these disconnects will cause an effort at a reconnect. With earnings data coming in January and increased pressure to resolve the trade wars likely producing some attempts at a resolution in Q1 2019 we can then reassess the bull/bear market debate with updated information.

Despite technical extensions, bulls kept screaming for every higher target in September. Bears are now screaming for ever lower targets in December. Ignore the screaming. Focus on the technicals. Everybody chill. Imbalances don’t last.

https://northmantrader.com/2018/12/23/imbalance/