IN AN ODD WAY THE MARKET HAS BEEN SETTING UP THE RECENT DECLINES FOR MONTHS...
YOU'LL REMEMBER THAT THE MARKET WAS "SUPPOSED" TO FALL AFTER THE TAX SEASON ENDED...SAY BETWEEN APRIL 15 AND MAY 1ST... THIS WOULD HAVE BEEN THE NORM...AND A LOT OF TRADERS WHERE SHORTING THE MARKET HOPING FOR THE MAY DECLINE...
WELL...AS USUAL...THE MARKET MASTERS HAD ANOTHER IDEA...
SQUEEZE THE SHORTS...DURING...JUNE AND JULY...WITH A HUGE RALLY...BASED ON EXCESS LIQUIDITY AND HYPE... AND THAT IS WHAT HAPPEN...
JUNE AND JULY WERE MASSIVE RALLY MONTHS...EVEN TAKING THE DOW TO NEW RECORDS...
NOW THE DELUGE...AND END OF JULY IS FACING A HUGELY OVER BOUGHT MARKET...AND CREDIT AND LIQUIDITY PROBLEMS THAT HAVE NOT BEEN SEEN IN MANY YEARS...PERHAPS DECADES... AND THE DOLLAR IS SURELY PART OF THE THAT PROBLEM...
SO IN EFFECT WE ARE HAVING THE MAY DECLINE...IN JULY...AND PERHAPS AUGUST AS WELL...
BUT THE TONE IS DIFFERENT THIS TIME...THIS IS A CREDIT AND LIQUIDITY DECLINE... IT'S NOT ABOUT PROFITS...OR "BEATING YOU NUMBER" OR JOBS OR PROFIT TAKING...
THIS IS DIFFERENT...WITH THE DOLLAR PLUNGING...AND THE STREET EXPECTING A FED BAILOUT OF THE EXCESSES OF THE LAST 10 YEARS...
THIS COULD BE "THE BIG ONE..."
MY HUNCH IS THAT THERE WILL BE A ONE DAY 1000 POINT DROP IN THE DOW...SOMETIME BEFORE THE END OF THIS YEAR...PROBABLY CAUSED BY A "GEO-POLITICAL EVENT"...BUT THE UNDERLYING CAUSE WILL BE THE DOLLAR, THE BOND AND THE INABILITY OF THE FED TO CONTINUE TO PROVIDE LIQUIDITY FOR THIS MASSIVE SPECULATION IN ASSET PRICES...
