Interim Market Update March 7, 2023

[bpcw]

Bullish sentiment pretty low, banks in crisis, and have we seen a bloodbath, nope!

Think we can expect a decent bounce from here soon!

Long-term bottom, not yet. Bounce: strong possibility

However, there is an unsettling odour permeating the market (Probably From Powell and Crew). It feels as though events have been unfolding a little too conveniently. Suddenly, the banks collapse, and Poor Powel faces a dilemma: raise rates or risk more businesses and banks going under. Me thinks this entire scenario was premeditated months ago.
I think another shockwave is needed, but after the markets have mounted a relatively robust rally.

So LaGarde raises rates .25% in 5 minutes and JP leaves it flat next week. Boom. Equities risk on. Then, Oh! Too much. Add .5. I don't know. It's fun to guess the game though. It is a game

Yes not thinking a long term bottom but a bounce around the levels you have suggested previously.

It is a game and as long as we're not putting our life savings on the line it is fun and I think we can learn from it.

[MarkD]

Let's see if crude demand increases soon. And housing starts. Those would necessitate the FED increase rates. While the 2 year is telling, and the 7/10 look to be topping, all bets are off until CPI/PPI/PCE are lower imo.

[SOL]

Let's see if crude demand increases soon. And housing starts. Those would necessitate the FED increase rates. While the 2 year is telling, and the 7/10 look to be topping, all bets are off until CPI/PPI/PCE are lower imo.

It's noteworthy that despite OXY trading in the overbought range (Monthly chart), Buffett is steadily increasing his position in the company. It's unlikely that he would commit such a significant amount of capital without being confident in his investment decision, suggesting that he already has a clear idea of the future.

[AstuteShift]

Let's see if crude demand increases soon. And housing starts. Those would necessitate the FED increase rates. While the 2 year is telling, and the 7/10 look to be topping, all bets are off until CPI/PPI/PCE are lower imo.

It's noteworthy that despite OXY trading in the overbought range (Monthly chart), Buffett is steadily increasing his position in the company. It's unlikely that he would commit such a significant amount of capital without being confident in his investment decision, suggesting that he already has a clear idea of the future.

I would trust the chart more than Buffet. He has made massive errors lately and it’s likely it’s his team investing and he is just a spokesman for the media

[chippermon]

Let's see if crude demand increases soon. And housing starts. Those would necessitate the FED increase rates. While the 2 year is telling, and the 7/10 look to be topping, all bets are off until CPI/PPI/PCE are lower imo.

It's noteworthy that despite OXY trading in the overbought range (Monthly chart), Buffett is steadily increasing his position in the company. It's unlikely that he would commit such a significant amount of capital without being confident in his investment decision, suggesting that he already has a clear idea of the future.

I would trust the chart more than Buffet. He has made massive errors lately and it’s likely it’s his team investing and he is just a spokesman for the media

But with so much money he is forced to play the long game. I mean looooong game. That's enough coin to move markets if he isn't careful. If he is making those decisions he won't see the fruits of his efforts in his present carbon based metaverse.

[Yodean]

I bought some Barclays this morning (UK time) before CPLie, hoping for a bounce, don't think the central banks are going to allow their buddies to go bankrupt!

My3c (3 cents due to inflation): be careful with European banks.

European banks as a general rule hold a lot of negative-yielding bonds, so whatever happens to the smaller U.S. banks, things are likely going to be much worse for the European banks - it's just a matter of time.

Central banks are duking it out - Fed will win, as always - and BOJ/ECB/BOE will be forced to raise rates in order to defend their currencies. If Fed stops/pauses rate hikes, things may stabilize for a period of time.

Capital flight-to-safety continues to head to U.S. markets.

But I'd stay away from any non-U.S banks, unless it's for a quick swing-trade - just not worth the risk. Better off just accumulating TQQQ or QQQ, for example.

Raising rates for the BOJ/ECB/BOE will screw the smaller domestic banks holding previously bought negative-yielding bonds which act as collateral for lending/borrowing, etc. Bank runs a distinct possibility overseas.

Dollar Milkshake/Black Hole theory in action, as well as Triffin's dilemma.

[SOL]

Let's see if crude demand increases soon. And housing starts. Those would necessitate the FED increase rates. While the 2 year is telling, and the 7/10 look to be topping, all bets are off until CPI/PPI/PCE are lower imo.

It's noteworthy that despite OXY trading in the overbought range (Monthly chart), Buffett is steadily increasing his position in the company. It's unlikely that he would commit such a significant amount of capital without being confident in his investment decision, suggesting that he already has a clear idea of the future.

I would trust the chart more than Buffet. He has made massive errors lately and it’s likely it’s his team investing and he is just a spokesman for the media

True charts and sentiment are better tools. Oil is pulling back more than stocks, the stocks need to play catch up. As the dollar will most likely put in a long-term top this year, commodities will do well. At this point, Iron, Copper, and PMs are looking pretty decent.

[bpcw]

I bought some Barclays this morning (UK time) before CPLie, hoping for a bounce, don't think the central banks are going to allow their buddies to go bankrupt!

My3c (3 cents due to inflation): be careful with European banks.

European banks as a general rule hold a lot of negative-yielding bonds, so whatever happens to the smaller U.S. banks, things are likely going to be much worse for the European banks - it's just a matter of time.

Central banks are duking it out - Fed will win, as always - and BOJ/ECB/BOE will be forced to raise rates in order to defend their currencies. If Fed stops/pauses rate hikes, things may stabilize for a period of time.

Capital flight-to-safety continues to head to U.S. markets.

But I'd stay away from any non-U.S banks, unless it's for a quick swing-trade - just not worth the risk. Better off just accumulating TQQQ or QQQ, for example.

Raising rates for the BOJ/ECB/BOE will screw the smaller domestic banks holding previously bought negative-yielding bonds which act as collateral for lending/borrowing, etc. Bank runs a distinct possibility overseas.

Dollar Milkshake/Black Hole theory in action, as well as Triffin's dilemma.

Thanks Yodean, I do agree and aware of the bond issue for European banks, just using a small amount for a hopeful bounce in banking stocks as more reassurances come for their bailouts and probably central banks will be forced to pivot unless we think they want a 2008 style crash or are completely stupid.....oh hang on that's a distinct possibility!

[chippermon]

I bought some Barclays this morning (UK time) before CPLie, hoping for a bounce, don't think the central banks are going to allow their buddies to go bankrupt!

My3c (3 cents due to inflation): be careful with European banks.

European banks as a general rule hold a lot of negative-yielding bonds, so whatever happens to the smaller U.S. banks, things are likely going to be much worse for the European banks - it's just a matter of time.

Central banks are duking it out - Fed will win, as always - and BOJ/ECB/BOE will be forced to raise rates in order to defend their currencies. If Fed stops/pauses rate hikes, things may stabilize for a period of time.

Capital flight-to-safety continues to head to U.S. markets.

But I'd stay away from any non-U.S banks, unless it's for a quick swing-trade - just not worth the risk. Better off just accumulating TQQQ or QQQ, for example.

Raising rates for the BOJ/ECB/BOE will screw the smaller domestic banks holding previously bought negative-yielding bonds which act as collateral for lending/borrowing, etc. Bank runs a distinct possibility overseas.

Dollar Milkshake/Black Hole theory in action, as well as Triffin's dilemma.

bpcw, I'm not sure if this is helpful but I ran across it today

[bpcw]

Our current strategy is to wait for good entry points. However, we might issue only a few unofficial short trades for risk-takers. While the outlook could change, big moves would be needed. For example, the NDX closes above 12300 daily but ideally on a weekly basis.

Well a close of 12579 definitely meets your criteria on a daily basis, have to see how we finish tomorrow!

[bpcw]

bpcw, I'm not sure if this is helpful but I ran across it today

Thanks Chippermon, possibly the banking sector is looking for similar reassurances to Credit Suisse, they have to come from central banks unless they want a 2008 style crash.

[SOL]

Our current strategy is to wait for good entry points. However, we might issue only a few unofficial short trades for risk-takers. While the outlook could change, big moves would be needed. For example, the NDX closes above 12300 daily but ideally on a weekly basis.

Well a close of 12579 definitely meets your criteria on a daily basis, have to see how we finish tomorrow!

Indeed, the situation has improved. If the NDX can finish the week above 12300, that would be a positive.
For those willing to take on some risk, one potential strategy is to focus on strong sectors with oversold stocks on both the daily and weekly charts. However, these ideal situations are not common.

Top sectors can be located here:
https://www.barchart.com/stocks/sectors ... y-rankings

As for the Fed, they have two backup plans in place now:
They can either raise rates a bit more or if that does not work use another bank as a scapegoat (throw it under the bus) to lower rates. The Fed's only function is to foster boom and bust cycles. They are parasites

[bpcw]

Our current strategy is to wait for good entry points. However, we might issue only a few unofficial short trades for risk-takers. While the outlook could change, big moves would be needed. For example, the NDX closes above 12300 daily but ideally on a weekly basis.

Well a close of 12579 definitely meets your criteria on a daily basis, have to see how we finish tomorrow!

Indeed, the situation has improved. If the NDX can finish the week above 12300, that would be a positive.
For those willing to take on some risk, one potential strategy is to focus on strong sectors with oversold stocks on both the daily and weekly charts. However, these ideal situations are not common.

Top sectors can be located here:
https://www.barchart.com/stocks/sectors ... y-rankings

As for the Fed, they have two backup plans in place now:
They can either raise rates a bit more or if that does not work use another bank as a scapegoat (throw it under the bus) to lower rates. The Fed's only function is to foster boom and bust cycles. They are parasites

Thanks Sol!

[Yodean]

*****

Cash is trash, buy the dip, trim the rip, and fade mainstream media!

[outof thebox]

Market bottom may be near, according to Michael Burry. Here are 2 stocks that may have already bottomed

Savvy investors can win on their trades whether the market goes up or down, and no one knows this better than Michael Burry. Burry, whose successes in profiting from the financial crisis of 2008 were featured in the book and film The Big Short, has turned his eye to historical analogies, and is hinting at reasons for optimism in today’s environment following last week’s collapse of Silicon Valley Bank.

Referring back to the October bank panic of 1907, Burry notes certain similarities with today’s crisis. The 1907 panic was triggered by the collapse of a major regional bank, Knickerbocker, in New York, which expanded to hit two other regional institutions and then threatened to spread to the banking majors. But, Burry points out, the 1907 panic burned itself out quickly. The market hit bottom in just three weeks.
https://finance.yahoo.com/news/market-b ... 47654.html

I am not sure cash is trash in the short term. Our friend the perma bear thinks a bottom is in, so there is one more leg down. The indices appear to be putting in rollings tops, and lower highs which were briefly interrupted when the markets broke this trend in Feb. Now that bury is turning positive, its likely there is one more selling wave in store. This could turn out to be a very hot summer. So far buying dips and taking profits on rallies has worked well.