** 17-Oct-2019 How the market will 'blow off'
jcsok wrote:
> I'm waiting for a blow off top. Bull markets climb a wall of
> worry, and this bull has been climbing for ten years. The sell
> offs have been vicious; the final sell off that really ushers in
> the true bear market will be mind blowing, which is what you, Hig,
> will be positioned for. But I am unable to be short until we get a
> euphoric rally that makes sharply new highs, for consecutive days
> in a row. In the last 10 years, the new highs are a grind, grind,
> grind. No sharp new highs for several days. Therefore, I just
> can't sell this pig.
> Maybe the blow off comes as a culmination of Trump's impeachment
> trial ending in Trump being vindicated by the Senate, his
> re-election chances soaring, forcing China into a REAL trade deal,
> all of which would make the bears puke and send the market sharply
> higher. McConnell wants a trial over by Christmas. So I'm looking
> for a blow off into January. Now I will resume my Ostrich position
> with head in the sand.
My personal opinion and expectation is that the "blow-off" will come
from an exogenous event.
The US economy seems solid enough, despite the stock market bubble
(though I suppose the same was being said on September 1, 1929).
But other economies -- Europe, China, etc. -- are not as solid.
In fact, the world economy is slowing.
** IMF says global economy to grow at slowest pace since 2008
** financial crisis -- Published: Oct 16, 2019 8:22 a.m.
https://www.marketwatch.com/story/imf-s ... 2019-10-15
Furthermore, there are several potentially explosive geopolitical
situations -- Hong Kong and Kashmir are at the top of that list.
We had a very interesting event in the last couple of weeks that shows
how quickly things can change. Houston Rockets General Manager Daryl
Morey posted a tweet supporting the pro-democracy protesters in Hong
Kong, and within two weeks it turned into a major international crisis
for the NBA and for LeBron James.
This shows how quickly simple events can escalate. This is literally
how world wars have begun, not to mention financial panics.
So in my opinion, the "blow-up" will be related to global geopolitics,
not to Washington politics.