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Strategies & Market Trends : Technical analysis for shorts & longs

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Dec 26 4:00 PM EST

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robert b furman

To: robert b furman who wrote (56217)	8/6/2024 8:54:48 PM
From: Johnny Canuck	2 Recommendations Read Replies (1) of 69260

The best explanation of what happened on Monday that I have seen so far and more importantly what the employment number on Friday actually means. This is an interesting podcast as it isolates the selloff on Monday from the change in trader sentiment due to the Friday employment report. The selloff on Monday was due more to margin calls on institutions that were caught borrowing at low interests rates from banks in Japan to buy assets in higher returns and interest rate countries to get an edge. With the bank of Japan then raising interest rates, this caused the loans to be called and they sold tech stocks that had high gains to cover the margin calls. It was an institutional trading problem. It says more about the amount of leverage the institutional are using as oppose to a structural economic problem in the USA. The employment number in of themselves is not an issues as a 3 to 4 percent unemployment rate just a decade ago was considered full employment. Anyone that wanted a job had a job. It is the rather the trend that matters, traders and economist don't like the fact they don't know when the trend will end. So it is a crisis of confidence as opposed to a real economic problem currently. Keep in mind a crisis in confidence can still crater the market 20 to 30 percent before cooler heads prevail. Not in the podcast but the big issue may still be the demographics, 70 percent of the US economy is services. A lot of services are discretionary. The inflation of the last few years means there is less money for discretionary services. Not much has gone down despite muted inflation. Match that with the front end of the Baby Boom generation entering their low consuming years and it is a problem for perhaps the next decade. Some trader are calling for a Black Swan event and a lost decade. We might be setting up for it now. I am still watching for the yield curve to invert. It almost did on Monday. The yield curve inversion combined with the Fed lowering rates almost always means a recession 9 to 12 months later. Unfortunately time is ticking to lock in high yield stocks and bonds for retirees and wannabe retirees. What the Stock Market Panic Says About the Economy - The Journal. - WSJ Podcasts

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