Market insights: Don’t Fight The Fed
Having said that we need to stop here and discuss a crucial point. Henceforth, the focus should not be on absolute targets as that won’t work. The Fed is directing the markets so while they are likely to let some natural forces control the upward trajectory; they are going to control the downward path. If a market lets out more steam then it should have, it has nothing to do with deteriorating fundamentals or the technical picture. The markets are being pushed lower because the Fed has determined that it is the best course of action.
Therefore, what traders need to understand and come to terms with is that all pullbacks ranging from mild to wild should be embraced. The Fed is playing a dangerous game; dangerous for the crowd, but completely safe for the Fed and its friends and for those that understand the concept of trend investing. Just look how many big players got it completely wrong. To mind comes Buffett. The oracle of Omaha, right now looks like the jackass from Timbuktu, he sold airline stocks right at the bottom, and that’s not his only mistake. Over the past few years, Buffett has made a massive number of errors. But he is not the only guy. There are a vast number of top hedge fund managers and money managers that would be better of employing a troop of monkeys to do their stock picking. These guys are only as good as you give them credit for, without the credit the masses willing assign to these experts; every expert is nothing but conman waiting to be discovered.
BEFORE I BEGIN TO EXPLAIN TO YOU in a general way what this system is about, and to talk about our methods, I want particularly to impress on your minds that the most important ideas and principles of the system do not belong to me. This is chiefly what makes them valuable, because if they belonged to me they would be like all other theories invented by ordinary minds—they would give only a subjective view of things. https://bit.ly/37jKLKs
Market insights: Don’t follow so-called experts
And that is the way you approach life and the markets. One should not focus on trying mimic other experts, because these experts are forever changing their storylines. One needs to formulate a system that works for themselves. This is why at the Tactical Investor, we have never relied on a given system. We are continually adapting to the markets, and if necessary, we are willing to dump tools that no longer work. The markets are nothing but a manifestation of one’s biggest fears and one’s insane desires to get more and more without knowing why.
There is no doubt that the markets are being manipulated at an unprecedented rate. Manipulation is not a new issue we have spoken of this many times, but right now, one can see that buyers emerge from nowhere when the market is pulling back. Market Update May 31st, 2020
And this manipulation is going to surge to levels that would be once deemed unbelievable to insane. Trying to decipher this type of action is wasting good energy on an outcome that you cannot control. Instead of trying to figure it out, the goal should be to understand it and accept it and only then can one come up with a plan. What is the underlying theme behind every disaster, and or every tragedy? To keep you guessing, but something is happening, and no one wants to focus on the obvious fact. Every disaster is used to increase the money supply, pump more money into the economy under the guise of helping the populace, and how is that going. The poor get poorer, and many of the former wealthy class suddenly join the ranks of the poor. But the trend player can make out like a bandit by mimicking the actions of the smart money.
Self observation is the Key to Improving One’s trading Skills
So in self-observation, it is necessary first of all to divide these four functions and to classify at once everything that you observe, saying, ‘This is intellectual function’, ‘This is emotional function’ and so on. If you practise this observation for some time you may notice some strange things. For instance, you will find that what is really difficult in observing is that you forget about it. You start to observe, and your emotions connect with some kind of thought and you forget about self-observation. Again, after some time, if you continue this effort to observe, which is a new function not used in the same way in ordinary life, you will notice another interesting thing—that generally you do not remember yourself. If you could be aware of yourself all the time, then you would be able to observe all the time, or in any case as long as you liked. But because you cannot remember yourself, you cannot concentrate; and this is why you will have to admit that you have no will. If you could remember yourself, you would have will and could do what you liked. But you cannot remember yourself, you cannot be aware of yourself and so you have no will. You may sometimes have will for a short time, but it turns to something else and you forget about it. https://bit.ly/37jKLKs
And this is why the masses never learn from their mistakes; this is why they do exactly the same thing every single time the markets appear to crash. A crash is just a perception that you have been forced to adhere to because you give credence to all the views that the experts are busy pushing. Yet, these experts have no clue, for if they did, they would be busy acting on their advice as opposed to pumping out nonsense and coming out with what-if scenarios. Coronavirus pandemic is a perfect example of this; what was supposed to happen or what should have happened did not come to pass, and that begs the question why? Because the experts have no clue, they are grabbing at straws and hoping one of these projections comes to pass.
Many of you that thought, the introduction of level 3.5 analysis was us trying to push some philosophical approach or a new way of looking at life. On the contrary, we use this type of thinking (level 3.5 and beyond) to determine trends in and out of the financial sector. What is the mass mindset? Individuals are desperately seeking an answer, but instead of trying to find the answer, they opt for the easy solution. Seeking guidance from so-called experts and when things fail, and they will eventually fail, they scream bloody murder. However, what is even worse is this experience teaches them absolutely nothing. Once the bitter memory fades, they start their vain search for a new saviour/expert and so begins the inevitable pain/misery cycle.
One of the biggest mistakes the masses make is to always focus on why! Don’t waste time on trying to decipher the “why factor”, accept the situation for what it is and then look for the best way to position yourself to deal with the new reality.
Market insights: They letting out some steam and are not in crash mode
Now the markets have let out a nice dose of steam. They took longer than expected to do so, but the pullback was extremely sharp, and now all the penguins will stand up and cry bloody murder. Now you have a chance to do the same thing or diverge. After the markets rebounded, so many subscribers wrote in stating that they regretted not pulling the trigger and buying when the markets were correcting/crashing back in March and April. Will you do the same thing now or will you diverge. The masses beg for an opportunity, and when an opportunity presents itself, all they see is a disaster and run. For the masses, it will always be ground hog’s day; sadly, they spend most of their time in the “regret mode” looking at what they could or would have or should have done, but never actually doing it.
The current selloff if it gathers traction will be used as an excuse to inject even more money into the system. What is the consistent theme behind every manufactured crisis? One thing stands out, and yet hardly anyone pays attention to it. Go back and look at every financial disaster. The money supply increased; the Fed’s used the crisis as an excuse to pump money into the system. While everyone states the Fed is here to stabilise the markets, their prime function is to destabilise the markets. Once this is achieved, they pretend to support the markets by injecting vast amounts of money into the system, paving the way for the next crisis.
So, whatever rubbish they pump out in the news, this pullback will resolve itself sooner than later because the Fed and its allies will either come out with new policies to push more money into the markets or directly intervene by supporting the financial system. As the money supply is going to keep increasing for the foreseeable future, we are reaching the point where it makes almost no sense to focus on stock market crashes. For in reality it is only a stock market crash if you bought in at the top, but if one started opening long positions during the prior crash, it should not be viewed as a crash but as the next buying opportunity. Market Update June 12, 2020
We are going to look at the situation closely over the next several weeks and decide where we should focus our energies on. The last crash was one of the shortest in history, and it appears that all future crashes could follow the same path. If that is the case, then it makes more sense to direct our energies on spotting the next opportunity then panicking over an event that is bound to resolve itself sooner than later. Once we have decided, we will ask you for your opinion. Just remember that every crash from the beginning of time has proved to be a buying opportunity.
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