The following was posted to subscribers.
BTC as I write this is dropping further big. This could be a hint that the market wants to drop more.
I have to consider how much short I'd want but net net I think we've dropped a lot. I think we're closer to another oversold situation where we'd either need to wait for sideways action for it to shake off or a bounce for it to shake off.
Following simple direction and if it looks extreme or not has helped guide us this year to avoid big in-your-face bounces but also catch down moves, or whatever moves the market wants to do.
Combining fundamentals with that, understanding the big strong about face of the Fed along with tech issues in supply, demand and China, we've had fundamentals and technicals pointing in the same direction, which has given me conviction to stay short in these down moves despite the bounces along the way. We'll continue to take it step by step.
Medium term, I do think QQQ has downside to 250 then 200. Like I called out ARKK 40 when it was multiples higher, I see the same for QQQ overall. Breakdown. As for ARKK, you've heard me say generally that I've seen people go out business trading with a 'defending' mindset. Buying when it goes against them. I think we're about to witness that here. If this market takes another 10-20% dive I see no way ARKK stays in business. That matters for her holdings because it would cause additional selling pressure.
There are many ways to trade. I prefer momentum than it's good when things go for you and not good when they go against you. You see the flaws and the strengths of what I do real time. There is no perfect method. But I think it keeps a trader in business for the long term.
As long as inflation stays up the Fed is forced to tighten aggressively. Pres Biden coming out on inflation stamps his opinion on what the Fed should be doing and the Fed's listening. The Fed helped launch this market. I said there will be a time for a Fed slam-on-the-brakes. I think we're in it. I think the Fed can get even tougher, ie blink. Let's see. Net net the market should have a tough time in the face of these inflation numbers and the Fed.
Here's the report today.
The big disappointment in this report was the .6 of core. No slowdown while all economists were hoping for a slowdown. Economists showing their cards and are too bullish. Topline is important but it is more biased by food and energy which depends for now on what's going to happen in Ukraine and Russia. So these numbers were not market helpers. The Fed has no reason to change their aggressive tightening course.
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