Broad Discussion: Stock Market Outlook 2023

[SOL]

This falls most likely under the category of "Random Musings' on the market. And for the most part, I am firing in an off-the-cuff manner.

We do not have to share this information with anyone. However, I am doing it now because I believe potential changes should be discussed and examined objectively.

Please don't start saying you guys are changing; remember, nothing is written in stone. At this point, this is an observation. I am sharing these ideas for one reason; to have a broad, open-minded discussion.

One day the current market action will be studied and discussed by academia in detail. The masses were subject to horrible manipulation during COVID, and then we had the war in Ukraine, which led to inflation and steep market correction. This unleashed the forces of hell on the masses. In some cases, I believe elements of learned helplessness seeped into the mass psyche.

I will not get into whether the vaccine is good or bad. The crux of the matter was that no one should have been forced into taking any medication, least of all an experimental drug. It should have been up to the individual. Those that opted for it, OK; those that decided against it should have also been treated normally. Instead, psyops was used to put them into a category almost equivalent to murders and to make things infinitely worse; the masses were restricted in their movement. So in effect, they were caged, and if they wanted to live a normal life, they would have to follow the stated mandates.

When one is forced to do something, locked in for prolonged periods and made to feel like coming into contact with anyone is the equivalent of playing Russian roulette, it does something to the mind of the average person. That something is not good. Yes, some can and will walk through it unscathed, but most will not.

We are seeing this play out in the financial markets. Never before (at least that I can recall) has bullish sentiment remained so low. The latest reading has bullish sentiment at 21, bearish at 42 and neutral at 37. Not once during the past 12 months has bullish sentiment touched its historical average. Think about that for a movement. In the past, no matter how dire the outlook, the bullish sentiment would rise if the markets rallied for several weeks. In this case, it does almost nothing and pulls back instead of rising when the market rebounds. Look at the current bullish readings.

The first correction was much more robust in duration and, to some degree, in intensity, but the real killer was the duration. This is particularly discerning as it occurred after most of the western world was in a prolonged lockdown mode. The market's psychotic behaviour is a direct result of the psychotic way the world leaders have chosen to deal with the War in Ukraine. I will say this; there was no need for war, and everything could have been settled more peacefully. Where there is a will, there is a way. In this case, there was no will; hence, the only option left was war.

The war revealed a weakness; just-in-time delivery or just-in-time order is what the world functions on, and this means nations that did not think they needed each other found out the hard way that they are deeply connected.
Over a longer time frame, this will have a significant effect; countries will focus more on being independent regarding food, essential raw materials, crucial components (semiconductors and, later on, A.I.) and energy supplies. Leading the way are Russia and China; Russia is 3X ahead of the rest of the world in pushing for change and making backup plans. For example, they purchased massive amounts of chips in anticipation of these sanctions. They have also set up various networks all over the world that will be able to buy everything they need without triggering any alarms. It does not take much to set up a bunch of sophisticated dummy corporations other than money. All in all, this means the world will move towards a protectionism mode.

Returning to the markets, the changes in the sentiment readings and the mental genocide the masses are experiencing suggest that if the central bankers/PTB provide enough stimulus to massage the crowd's mind that all is well, they could change the pattern. To illustrate this point, let me tell you a story I was told by a Turkish chap

A very powerful man wanted to impart a lesson to those who worked for him. In front of thousands of them, he told one of his workers to bring him a chicken. He grabbed it and pulled out all its feathers while it was alive. He pulled out every single feather, and the chicken screamed in pain during the process. Once completed, he dropped the chicken to the floor and started sprinkling food around it. The chicken began to eat the food.


He pointed to the chicken and said that is what people are like. You can treat them however you want. If you feed them, they will forget and fall in line.

Back to the present-day situation, the rules are being written as we speak. If the PTB or the Fed decides it's time to feed the chickens, they can quickly create a new narrative. Will this happen? That's the trillion-dollar question.
Technical analysis can take you only so far, it's quite potent when combined with the sentiment, but money can overrule everything, at least temporarily. The next corrective wave should be fast and furious, given past patterns. For example, the stock market tops out towards late Dec- early Jan, followed by fast downward action and a bottom around March-April 2023. However, the past 3 years have been anything but normal

The populace has never been subjected to this kind of psychological manipulation for such a long time (essentially from 2020). Furthermore, there is so much money around that the big players can create new narratives and manipulate short-term trends. For example, it appears that the bond vigilantes were used to make the inverted yield curve look worse. In essence, many big players were losing a fortune in the market. Playing with yields gave the Fed an excuse to at least mouth the right words. However, that is a story for another day. It just shows you how much money these chaps have today.

We have noticed that even more than money, the very top players seem to take a perverse delight in making the lives of the masses miserable. I am almost tempted to state that the pain and suffering they observe give them more of a kick than the money they make from creating these disasters. Applying this pattern to the markets could lead to something like this unfolding.

In 2023, the market rallies to new highs, but there is a good chance it could end the year slightly in the red. So, with lots of up-and-down movement with the appearance of a new breakout, the markets are taken lower. Why? This is another psychological attack and an extension of the war of attrition, and it will kill the biggest set of investors: Passive players.

We previously stated that a day would come when passive investors would feel pain. They could do this for 12 months or longer; if they opt for more, this could last well into 2024 and possibly 2025. While this is deadly for passive players, it is generally perfect for traders. But while most investors state they are traders, the reality is that they are not. They are passive players. Is this outcome written in stone? Not yet, but the trend is heading there. The world has never gone through almost 36 months of such incredibly mentally damaging destructive manipulation before. And I don't recall seeing bullish sentiment readings trade below their historical average for such a long period. Something is amiss.

In finishing, traders win hands down during volatile markets, and passive investors generally lose because buy and hold do not work well. 2022 was not a pure traders market, there were many black swan events, and one could even call them black hole events. There is no period in history that I can recall where such a cluster of adverse events has coalesced to wreak havoc over such a short period. However, It appears new trends could be in play in 2023, targeting passive investors.

Once again, let me reiterate that we don't have to share this observation but are doing so because an informed mind is a potent mind. OK, let the comments or insights flow.

[MarkD]

The Turk is pretty smart.

As for the markets, I have no doubt the LT investor fed low cost index investing using EMH has been "fed" well by Mr. Vanguard Bogle.

Your hypothesis of a prolonged bear extending into 2023 creates an interesting situation. After the lockdowns ended, lots of eligible folks retired in the boomer generation who would not return to an office. The labor participation rate is down from pre-covid and rolling over again.

https://imgur.com/jcLRMlF

What better way to destroy folks that are retired than create a situation where they need to pull funds from an account to live, from a dwindling supply of indexed funds. Followed by a surge in the unemployment rate, they are now unable to recover as jobs are slashed (it's only just begun).

https://imgur.com/8kGiaLZ

The 2024 election then becomes an opportunity to mentally transition folks to become more dependent of centralized authority as both young and old are barely making ends meet.

Miraculously, a recovery occurs but most are unable to take advantage as funds they intended to use for investing have been depleted to use for day-to-day living. Once the feathers have been plucked, they are unable to fly or move about freely, and will eat chicken spit to survive.

[SOL]

according to Shadow stats, the unemployment rate is much worse than the officials are letting on


If you couple that with your labour participation rate, and the hypothesis that passive investors (mainly investing in index funds) will get hit, things don't look too bright for them. On the other hand, it supports the claim that VM (velocity of money) is what really governs inflation. VM has been dropping for years now. Hence, to create discomfort via inflation, the big players have to create shortages artificially. If you pay attention, none of the shortages lasted. They magically appeared and then disappeared.

[MarkD]

When Covid hit, I had only one option to buy eggs at the local grocery. Kentucky Amish Organic. $4 a dozen.

They were spectacular and I immediately stopped buying the hormonal / antibio fed crap for under a buck a dozen.

I would gladly pay that price today. Covid was good for something

With respect to inflation/deflation, I am posting a couple of charts which illustrate your argument from herein. The LT outlook is unclear but there has been a dramatic drop in inflation that is exhibited in the form of a trading range for price sensitive commodities.

https://imgur.com/HBasX9O

https://imgur.com/dlmgZU5

[SOL]

When Covid hit, I had only one option to buy eggs at the local grocery. Kentucky Amish Organic. $4 a dozen.

They were spectacular and I immediately stopped buying the hormonal / antibio fed crap for under a buck a dozen.

I would gladly pay that price today. Covid was good for something

Well, in Asia, as is the case with parts of Eastern Europe and South America, you can go to the local bazaar and pick up free-range eggs, free-range chicken, and much more. The first time I saw the eggs, I was surprised at their size (quite small), but the taste difference was huge. The drumsticks on those free-range chickens are small. When I showed some of the sellers' pic of the drumsticks in the US, they thought they were baby turkey legs. When you travel, you realise just how bad the general food supply is in the US and much of the Western world. On a separate note, Many Amish products are good and damn tasty. When in Pennsylvania, I would visit the Amish county and stock up on everything from Jam to cheese

https://www.discoverlancaster.com/amish/

[DOCLUC]

Boys
in just 4 posts we moved from "2023 market outlook" to the size of eggs around the world?
what a beautiful bunch we are !!

[Yodean]

"2023 market outlook"

I'll keep it short: my base case for '23 is that equities mostly rally in q1 and also possibly part of q2, and as we head into the 2nd half of the year, markets are going to enter into a period of consolidation with bearish bias ...

Stocks to the moon!

This is the Way of the Ninjedi.

[MarkD]

https://imgur.com/72CNLmV

[SOL]

Boys
in just 4 posts we moved from "2023 market outlook" to the size of eggs around the world?
what a beautiful bunch we are !!

Yes, we just can't keep on track. But in one way its fun

[stefk]

Boys
in just 4 posts we moved from "2023 market outlook" to the size of eggs around the world?
what a beautiful bunch we are !!

The chickens are a wonderful proteins factory, by producing eggs everyday. The best investment you can do in 2023, is to buy six to ten chickens, for you and your family. You only need a little ground, if you dont have a ground, buy some, also a good investment for 2023.
For me , the best breed is the chicken harco. They are very active, fun and they give us 1000 real bio eggs during their life. And also, they produce a rich manure, for your legumes garden.
All the chickens deserve our respect, and its not the case eveywhere in the world. This turkish guy and his poor chicken, say him not to mistreat animals, and certainly not in front of me. I become very dangerous when I see mistreatment against animals.

http://www.vistaites.lt/35453/-our-poul ... harco.html

The ancestor of all our chickens is the red junglefowl. He was domesticated 8000 years ago in south east Asia.
Historians think he was domesticated to organize animals fight first,and not for his eggs or meat.

Its a jungle animal, give your chickens an environment with little trees, and bushes, they will be happy, and they will give you better eggs !!!!

https://en.wikipedia.org/wiki/Red_junglefowl

[SOL]

This turkish guy and his poor chicken, say him not to mistreat animals, and certainly not in front of me. I become very dangerous when I see mistreatment against animals.

I agree eggs are a good source of protein. I consume them every day. Will slowly look into possibly raising them. As for the Turkish guy, at least the one I know does not harm animals. He was telling me a story, and I think it comes from folklore. This was related to why he thinks Erdogan will remain in power for a long time

[MarkD]

Speaking of power vs force, Twitter Spaces broadcast average attendance reportedly 100k per. WAPO planning to lay off as subscriber base drops 500k.

Musk is being dealt with by cutting off funds to Spacex/Starlink. How long can he hold out? Can they afford to have him leave the USA and take his tech offshore? Trump is no longer public enemy no. 1.

[chippermon]

I believe that in order for equities to continue higher we need to see the NASDAQ catch up NOW. Perhaps Powell's fedspeak will initiate this, shortly. If not, I will be mostly out of equities by the end of the year, watch the carnage take place and start to build a portfolio at the end of the first quarter.

I will keep my eye on Tesla as a prelude to what the market will do here also. It sounds stupid but I think it will lead. Elon is not playing nice in the PTB sandbox and must be punished. I see 128 then 113. AMZN will also be a good option play to the short side. VIX calls too.

[SOL]

Canada Consumer-Debt Payments Higher Now Than When Rates Were 13%

Consumer debt payments in Canada are significantly higher today than when interest rates were in the low teens in 1990, a sign of the economy’s “extreme level” of indebtedness, economist David Rosenberg said.


The household debt service ratio, which plunged two years ago as rates fell and governments paid out Covid-19 aid, is rising again because of the Bank of Canada’s decision to sharply increase borrowing costs to cool inflation.

“Think about that for a minute. Consumers are shelling out more in total debt-service payments out of after-tax income today at a 4.25% BOC policy rate than they were three decades ago when the policy rate was 13%,” Rosenberg said in a report to investors Wednesday.

https://finance.yahoo.com/news/canada-c ... 48225.html

Not a good sign, and it indicates that the US consumer probably is in a similar position.

[Yodean]

I believe that in order for equities to continue higher we need to see the NASDAQ catch up NOW. option play to the short side. VIX calls too.

Dude, stocks goin' up.

It is always darkest before the Light.

Plus, YoungAnakin's still kinda bearish and easy to trigger.

When YoungAnakin turns bullish publicly, I'm selling everything and shorting everything.



This is the Way of the Ninjedi.