Global Market Analysis — Biweekly Update
I expect some major major news this week. Not positive news, either. Probably something really ugly, just to kickstart the recession.
I warned twice (6/15) previously (6/30) that the market is getting hyper bearish. I guess it’s time to remind people a third time that the markets are getting really ugly. I tried.
This time, I’m going to go back to some Forex and global market analysis. It’s time. So let’s see, Gold was $1800, and is now sitting at $1722 (chart link). Where will gold go from here? Anywhere from $1600 to $1200 probably(chart link). Remember, Gold is speculative. It is not a reserve asset any differently than Bitcoin.
What about Silver? Silver also swan dived off a cliff. Chart -> https://www.tradingview.com/x/silx1OKI/ . Silver has nothing between here and $10 (it’s at $17 now). We’ve been dumping since April. and will probably bottom out differently than 2020.
Where does it come from? The almighty power of the dollar, bitches. When everyone in the world agreed to use the dollar as their reserve currency, the dollar won. It took some time, and the dollar weakened over time, and now it’s back. And…well, is this what was going to happen? Yes, yes it was. Quantitative tightening (QT) is all about strengthening the dollar! Who could predict that QT would….strengthen the dollar, and crush the stock market? It obviously doesn’t make people happy, but it is doing what is expected. I’ll have to dig out some Jpow quotes later.
See the Euro in a swandive (linked chart)? Yep. Buy the dip? No. Keep in mind what this means: US is going to acquire a lot of European assets as EU gets crushed by Russia. Is that intentional that the EU part gets crushed? No, I honestly doubt it. I think the goal is to crush Russia, which seems to be going decently based on Ukraine/proxy war/Russia defaulting/sanctions being super strong. The US does well with a strong Europe, and Russia doesn’t.
If I were anyone, I’d be holding some USD. Ignore the stupidity, hold all the USD you can until this shit ends, and then yeah maybe flip it back when the US economy recovers. Welcome to interconnected global finances. EUR will go under the USD before it goes over.
It’s not like China’s in any better shape, what with freezing withdrawals and using covid laws to prevent people from withdrawing and only backing off when people become violent. Then again, also predictable after Evergrande.
The common trend here is, USD is strong, everyone else is fucked. Ride the wave. Know what else generally isn’t fucked (but people don’t understand)? The US stock market (SPY chart link).
Unlike crypto, the SPY will be bullish even if it drops 50% from here. Which it could. What someone needs to understand is just like currency, what can you do? For one, buy some puts, and for two, open some shorts (risk controlled please so you don’t rekt yourself). Or buy some inverse ETF’s, whatever you want. Remember these are probably plays through the end of the year, not things to leave for 5 years from now.
So what happens if Tesla crashes, what happens to the SPY? Answer: Not much. S&P 500 is an index, and it will delist/list things as they crash or grow accordingly. So all that will happen is Tesla price will plummet and the leave the SPY. Would Musk be in trouble if that happens? Yes, of course. But in reality, it would just mean some other company takes their spot at the bottom of the S&P500.
Thus, in the end, we will have a market shift. That’s all it is. We will switch from current tech sector to new tech sector in whatever it happens to be, and things will shuffle as they did before. Different companies lead in the 2000’s, and different companies lead in the 2020’s. Who knows what it could be next — my bet would be on quantum technology for a while, or biotech. We literally have a very bustling economy. But clearly tech is topping out again because new tech needs to take it’s place, and we’ll see what that is. I couldn’t tell you, because I can’t guess those sort of macro trends right now, but we’ll know it when we see it.
Stay safe, folks.
If you want to read my previous related forecasts, they are below. This one was mostly technicals.
