Here is a counter view. Don't get too exited Baylor.

I believe the conditions now favor an imminent stock market crash.

A 🧵. 👇 (1/20)

— Michael A. Gayed, CFA (@leadlagreport) December 2, 2022

Fundamentals warrant it but I wouldn't expect it this December, so I would position myself for last week of January to middle of March. Today's recovery from a big red open defied logic and it's hard to discount Santa.

lobwedgephil said:

---

Here is a counter view. Don't get too exited Baylor.

I believe the conditions now favor an imminent stock market crash.

A 🧵. 👇 (1/20)

— Michael A. Gayed, CFA (@leadlagreport) December 2, 2022

---

Stop it. I'm already hard as a shark's tooth ;-).

Michael Gayed is a perma-bear that's occasionally correct. Sven is the better follow between the two.

I think you have to have two ideas that are conflicting with each other:

• The market may go up in the short term. Probably 4200 to 4300
• The market will probably go down on a longer time horizon. I think 2750 to 3000 is the floor

Some quick macro thoughts because I haven't done this in a while:

• Everything is flashing recession but nothing is really hard indicating that. While companies are laying off, earnings are pretty good. They will remain under pressure with high rates
• The fed has a dual mandate of employment and inflation. They have to be careful not to go too far and will keep trying to thread the needle. They are always knee jerk and always behind the curve though.
• The yield curve is still inverted and nothing good happens while it's inverted. I personally won't breathe easy until the yield curve flips back to normal

BaylorSpineGuy said:

---

Good insight. What will be the move to drive the 2-10 curve back into a positive slope?

---

Maybe the better thing is to know what a yield curve inversion means: short term rates exceed long term rates. Why? Because investors are long longer term bonds, which pushes yields down while short term bonds are lower, which pushes rates higher. That behavior is essentially saying that investors believe long term bonds are safer than shorter term purchases hence the yield is pushed down and the bond value increases. Demand for bonds = lower yield

The yield curve more or less reflects sentiment, and I think we've discussed before that commodity and bond prices drive stock prices and interest rates / currencies drive bonds and commodities. So, in simple terms, the market does not believe everything is copacetic.

The greater risk in my opinion is that in an environment like this, there is increased sensitivity to events that may otherwise be ignored, but this time will be magnified into a 'black swan'.

PSA to the financial advisors in here: there is nothing more annoying than getting cold solicitations on LinkedIn from people who want to manage your money and open with statements like "risk free ways to make money". Oh yeah? Bull crap. I really doubt you're getting clients that way.

Want my attention? Send me something that's interesting or tell me how you work, not that you manage money for executives.

I'm pretty new at this game but that phrase is pretty close to being illegal, at least non-compliant

OPEC and non-OPEC producers, a group of 23 oil-producing nations known as OPEC+, decided to stick to its existing policy of reducing oil production by 2 million barrels per day, or about 2% of world demand, from November until the end of 2023. Reuters & Bloomberg

Charismatic Megafauna said:

---

Now i know we're gonna get some epic rug pulls along the way, but who's ready to get back to the bull market!?

Closing update #ES_F: 4075 was target today and hit into the close and now basing right here. Notably, ES closed the week above its 200 day MA for the 1st time since bear market began. 4105+ next up. Newsletter out later talking plan and risks next week https://t.co/zS20sba61S

— Adam Mancini (@AdamMancini4) December 2, 2022

---

My crayons say we closed right at that upper trend line going back to january, but haven't definitively broken it. If i were a betting man (lol) id say there's a better chance we bounce off and head back down than to break through and continue up. That would actually be spectacular because if it happens I'll go ahead and max out my 401k in january

All you Model T fans out there, I have it right around SPY 414 for the MT of October low and the ATH.

Will be watching that level closely if it keeps rallying up.

wanderer said:

---

We'll that's less than ideal after just buying on Friday (BOIL).

---

I don't own BOIL. Can't speak to it. I can tell you this, should the market react bearishly to Dec 4th OPEC+ happenings, it's the easy course to take. A lot of those trader & financial folks will need to witness first-hand how the price caps are going to play out. Russia already released statements and there out on the web. In short, Russia gave the middle finger. There's way to much in the real world happenings scantly reported by the press to see this as bearish, but hey, spin is in. Trump tried to tell EU to contract with other suppliers for LNG. Today, LNG is sold out through 2026. Contracts today are for the 30 years after 2026. This Administration has made U.S. fossil fuels so toxic to the financial market nobody wants to step in and finance, so if you want a contract and the supplier wants the deal, you'll have to by default, finance the long term contract to have the supplier commit to spend capital. There will be less energy. Buckle up.

Great article.

https://www.gulftoday.ae/business/2022/12/03/energy-hungry-europe-cant-look-to-us-shale-to-fill-any-opec-gap

And here's some more,.....

• Americans should be preparing now for energy shortages to hit this winter after the Biden administration "from day one has initiated a war on U.S. energy," particularly on the coal, oil, and natural gas that provides 80% of the country's total energy usage," Mandy Gunasekara, a former chief of staff for the Environmental Protection Agency, said on Sunday.
• "Americans are going to have to take some of these matters into their own hands because the Biden administration and Democrats at the local level have been ignoring their responsibility to shore up the grid system," Gunasekara said. "It's not because of natural shifts and the 'market.' This is by design, by the Biden administration trying to shutter coal, trying to limit the development of natural gas here in the United States."
• Further, the administration is willing to go abroad to places such as Venezuela and other countries that are run by dictators, "where people have no standards for humanitarian values" to bring oil to the United States, she said.

And more,...

With the strains of G7 Price Caps influencing tanker freight, Greece is not willing to load Russian oil then add in the companies who insure cargo don't want to touch this. EU will not buy from Russia. So, Russia sells crude to remaining Asian countries who will buy from them and the remainder goes to India and China. EU will end up buying hte repackaged product from those countries. Once you add all the freight to these moves to get crude and/or energy derivatives to EU the price is through the roof,....if Brent isn't $125 and WTI $120,....then good luck. Russia will cut back heavily. So much news not being discussed here in the U.S.

I think Chevron and ExxonMobil merge in my lifetime.

My 2 cents. Been saying energy costs are going up and O&G companies are bullish and will get blamed by this Administration and MSM. Just remember to tell the talking head(s) blaming an O&G company for higher priced energy that no one pointed a finger at Apple when iPhones went from $600 to $1,200. This week will go down in history as really ugly, poor policy, and bad decisions.

BANG BANG BANG

$10/gal gasoline. Give it to me.

Sorry I missed this. See my long post I just posted minutes ago.

Chinese are announcing removing lockdowns this week. They should, Russia will handle their energy needs.

ETA: 12/4/2022 @902pmCT - Shanghai, Shenzhen and Guangzhou have relaxed their covid enforcement.

This action in nat gas is the kind of thing that happens at the end of a trend. And that trend has been down since end of last winter.

I can't predict if the bottom is on or is on the horizon. But the trend isn't up until it proves itself. And it hasn't yet. Smal spikes under resistance that chop up and down and can't maintain is NOT a trend.

On the same lines, crude is similar. It's not trending up until it can prove itself and start taking out resistance levels.

Don't guess. Don't predict unless you are willing to be wrong or you are willing to hold very long term. Don't do options unless you are in a confirmed trend.

Gold futures are about to take out a significant resistance level. Beer candles are up. Potentially closer to a top than anything else, but trend is definitely up, especially if $1825 resistance falls.