Incredibly, he’s not one of my readers… nor, am I his! This, just sent to me….
“Thoughts from Robin Griffiths, Chief Technical Strategist at The ECU Group:
Bear Market Rally, 2017 Low
“Everything suggests to me that the world is in fact in a bear market and that what we’re having is the end of the first bear market rally…
According to my work, the final low of the bear market is not now—it’s not even this year. It’s next year and it will be quite a bit lower than we are now in virtually all markets.”
Oil Rally Now Fading
“Whenever a move up is exceptionally violent and vicious—as it’s been in the price of oil—usually the buying power is short covering…and, of course, once the shorts are all covered, the next trade is likely to reinforce the last trade that made a profit, i.e. they’ll short it again at higher levels.
In the case of something like oil we are still in a position where the world has massive excess supply and a lack of demand so that’s the underlying fundamental. You don’t fall 80% and then make a nice little V-shape bottom on the chart and then go back to the good old days. That is just so unlikely I can’t get my head around betting that way at all. It’s much more likely that the rally runs out of steam and we go back down to make a more important base…and at much better value.”
This Doesn’t Happen in a Bull Market
“The US market is one of the stronger of equity markets. And what my work is suggesting is if you’re a hedge fund putting on some new shorts into this rally now is a really good idea and makes you a profit. Holding cash is a slightly less good idea because what cash does is it stops you losing but it doesn’t actually make you richer. And the things that have been going up are high-quality government bonds, gold bullion…and inverse equities or short-selling so that can’t happen if we are in a bull market basically…”
“The economies are cooling down some more than others and Janet Yellen doesn’t want to crash things so the notion that we could have interest rates returning to what used to be normal now or anytime soon is…well, it really can’t happen. It’s not going to be allowed to happen. But because of valuation levels I use the expression of a ‘slow-grinding bear’. I think that is the high probability. The possibility of a crash is much greater from bubble territory but the broader market is not in bubble territory—it’s just expensive. And it’s had a very long-lasting bull, slightly kept alive on steroids of zero interest rates… and it’s in the next 18 months to 2 years when we’ve got to correct the excesses…”
Amazingly enough, every word concerning oil and stocks is exactly as I see things. Bet he gets paid a lot more than I do! Oil is now $35.35 a barrel. If it still matters, it’s going to hurt stocks. And, they’re now hurting in Asia, and our index futures are off .36 to .41% as of 10:00 pm EST. I think my short position may be about to start paying off. All bold emphasis above was mine
World stock markets are getting pummeled. Our own futures, as of 5:30 am EST are .57 to .73%… a relatively large amount. The correction from very overbought conditions may be on. And, oil is $35.58… too low to save any of the heavily indebted.
Here’s to your successful investing!
Harold F Crowell