Mohammed El Erian might just be the King of Wall Street hot takes. They’re almost always bad. Very smart guy, too. But another Fed apologist, Wall Street shill.
That’s odd. I’m seeing stocks down 8% and the 10 year yield up 30 BP just since Thursday. I think this afternoon’s blip was just a bit of short covering. Fed is grossly behind the curve and this market is going much, much lower. https://t.co/2rvGVdeYBn
— Liquidity Trader (@Lee_Adler) June 15, 2022
El Erian’s comment pretty much nailed the high of the day, just like my “Aooga” nailed the low. I laugh when that happens. These Wall Street guys just move on to the next nonsense spew and think nothing of it. They have no shame.
So stocks have now wiped out 17 months worth of gains, and if they don’t rebound right here today, the next area of strong sport is the 3400-3600 range.
I report where the market is headed over the short to long term weekly here
Shifting down to the 5 hour bars on the ES 24 hour S&P fugutures gives you some perspective on this. All the sport lines are downtrending. If there’s no bounce this morning, it looks like this thing could drop to 3500 in a heartbeat.
Finally, a look at our usual one hour bars. 3670-3640 is the first sport level. The next is 3600. Prelim 5 day cycle projection 3550.
Ouch.
Yesterday, the Fed raised the Fake Funds rate to about 20 BP below the market. It’s so far behind the curve it almost seems to be a joke. I mean, the CPI is 8% for cripessake and the Fed pegs its fake rate at 1.5 to 1.75. Yet Wall Street applauds the Fed for getting serious about fighting inflation. Who the fuck do they think they’re kidding. Wall Street, and the Fed, are both criminally delusional.
This morning, the 13 week bill rate has come back in a bit. That should last about a week before it starts skyrocketing again.
Meanwhile over in “risk off” har de har Treasury Land, once the 10 year blows through 3.50 we’re looking at 3.70 in a heartbeat.
Oh the humanity!
To understand where the market is going just remember this one simple rule. RULE NUMBER ONE. Don’t fight the Fed, especially when it is light years behind the curve. It will be a long and bloody grind for long only players in stocks and bonds. If you are able and willing to play the short side there’s still plenty of money to be made. But you must understand the context of the battlefield!
The poster boy for excess useless speculation, BTC, will lead the way.
In the short run however, fear not. The target is only 12,000.
If they manage to hold above, or at least at, 20k, then we get a bounce first before this POS heads toward its ultimate demise.
All of the above is presented to you for free. Remember, you get what you pay for! If you really want to know what’s going on, then join me at Liquidity Trader. Check out the links below for extended intros.
- Gold Stares Into the Abyss and Doesn’t Like What It Sees June 14, 2022
- Dealers Assume the Position, as 75 BPs Coming Wednesday June 13, 2022
- Swing Trade Screens – Yes, More Shorts But There Are Limits, You Know June 13, 2022
- Remain Calm, All Is Hell June 13, 2022
- The US Economy, Including Jobs, Collapsed in May June 2, 2022
- Quantitative Tightening is Here, and the Effect Will Be Devastating June 1, 2022
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