Financial topics

[Cool Breeze]

Phong, do you think commodity based stocks will survive, somewhat, next year if we move down generally in the markets over the next 2-3, or 2-8 years?

[Phong Tran]

Phong, do you think commodity based stocks will survive, somewhat, next year if we move down generally in the markets over the next 2-3, or 2-8 years?

Yes, initially, they will move down with the general downdraft, until commodities start to decouple from the DXY. Once that occurs, their growth will be noticeable, probably keeping 1:1 % ratio with commodities increases. Their expenses, debt refinancing will still be effected by the DXY strength as well as increase in oil and gas required for their operations so I expect some headwind there. Later on in the bull phase, probably 4-5 years out, their ratios will start to increase dramatically as currencies fail and they become the go to place for wealth preservation and speculation. Just my thoughts on how things will play out.

[vincecate]

Thurs Oct 13 is the next CPI. Maybe this will be the one that triggers the market crash.

Oil is up about $14 in about 14 days.

[Cool Breeze]

Phong, do you think commodity based stocks will survive, somewhat, next year if we move down generally in the markets over the next 2-3, or 2-8 years?

Yes, initially, they will move down with the general downdraft, until commodities start to decouple from the DXY. Once that occurs, their growth will be noticeable, probably keeping 1:1 % ratio with commodities increases. Their expenses, debt refinancing will still be effected by the DXY strength as well as increase in oil and gas required for their operations so I expect some headwind there. Later on in the bull phase, probably 4-5 years out, their ratios will start to increase dramatically as currencies fail and they become the go to place for wealth preservation and speculation. Just my thoughts on how things will play out.

I love it. We see things very similarly. Thanks for the analysis and projections.

[Cool Breeze]

Thurs Oct 13 is the next CPI. Maybe this will be the one that triggers the market crash.

Oil is up about $14 in about 14 days.

It should trigger another trip downward, fairly big.

[Phong Tran]

Should be finishing the third wave either today or early Monday. If the timeframe and wave structure are generally in line, October 13 could be the 3rd of the 3rd wave kick off down just like the non farm payrolls was the kick off for this downtrend. If we do bottom near end of October and get another bear market rally in November, I'm wondering if the Fed surprises everyone with only a 50 bps increase, that would definitely get the bulls excited enough to start squeezing the bears out for a while.

[Higgenbotham]

Should be finishing the third wave either today or early Monday.

This seems likely to me also. I covered shorts today and will look for another place to get short. I see a minor possibility the market may challenge Richard's pivot of 3760 but not quite get there.

[Phong Tran]

I'm keeping a very close eye on the wave structure. If wave 4 gets more complex and wave 5 extends below the current low of 1584, there could be a fractal pattern of truncated 5th wave structures in this current leg down. The red line down is if wave 5 follows the wave 1 structure, landing between 3250-3450. But if we get a truncated 5th wave that just acts as a backtest of the descending triangle, we could see a lot more buying pressure coming in as traders believe the market has bottomed in and around the weekly 200ma.

[richard5za]

Should be finishing the third wave either today or early Monday.

This seems likely to me also. I covered shorts today and will look for another place to get short. I see a minor possibility the market may challenge Richard's pivot of 3760 but not quite get there.

I think you were prudent to cover your shorts Higg, simply as a matter of risk, but the sharp drop on Friday was in response to the buoyant jobs report and therefore the prospect of the Fed continuing to be aggressive on raising interest rates. The Fed seems to be making it clear that they will deal with inflation. Whether they are able to is another debate.

So I could see a continuation of this wave down. Of course, it can reverse and do the unimaginable, that's the knee-jerk nature of the current market.

[vincecate]

I think you were prudent to cover your shorts Higg, ...

I am more confident that 6 months from now the markets will be much lower than ever before and I have both higher total bets and higher percentage of my total wealth betting that markets will go down now than ever before. But I use puts/calls because of bad experiences where even if I was right about the long term direction if I was wrong in the short term I could lose bad.