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Lots of Motion Across the Board

Daily Rap 06-16-2023

For whatever reason, nearly all markets that I follow regularly saw a number of surges in each direction, but however I describe it won't do justice to the volatility. I mention that in case it matters, as sometimes when markets are getting ready to change direction you see action like this.

Place Your Side Bets That said, I have no special reason to think a change might be imminent for the stock market, other than the fact that sentiment is about as lopsided as it gets when one looks at the DSIs, and of course valuations versus fundamentals seem way out of whack. However, as we've learned in the era of activist central banks and passive investing, valuations and fundamentals often don't mean a whole heck of a lot for long stretches.


Last year's posts for Ask Fleck

Q: Hey Fleck,

And I quote from yesterday's Daily Rap..."The miners were in the doghouse once again and traded as though they were mining dirt and not gold."
This was on the day that a few of the bigs payed dividends...guess $0 dividend spec plays who have never made a dime of profits jump 3%-5% due to the robin hooders out there who never seem to get their faces ripped off...at least not lately.
I realize that the market is driven by emotion (fear and greed) but my patience is running very thin on the miners. I just know when I do capitulate and sell it will be the beginning of biggest break out in gold and silver mining history.
I am patiently waiting for Rosey's prediction of a recession in the 2nd half of the year to really assess the miners and any reactions to the never ending downturn in the leading economic indicators by the talking heads.
My simple question is do you believe the fed is done hiking rates and if so will they begin lowering rates this year?

Fleck: They are done hiking I think, but I doubt cuts will happen without any turmoil.
(posted: 6/16/2023)

Q: Hi Bill, I want to pick your brain again based upon a hypothetical circumstance that I personal is somewhat plausible if not likely.

Suppose something happened over the weekend in July? Suppose it was something devastating like finding out that China has just blockaded Taiwan? Suppose the market futures are down more than 20 percent before the Monday morning open.

The market authorities would have certain conditions as you know. They will not allow the market to plunge without breakers closing the market for a time whatever it is. Lock limit down! The longs in tech or at least those with any sense want out desperately and many if not most cannot get out easily. The first sell is the best sell, as it goes. But this kind of selloff can cascade very quickly like an avalanche.

You are not short at least not short yet. What do you do in my scenario? Do you wait for a rebound? Do you just throw caution to the wind and jump into shorting something you like? Do you just tell yourself, well, I missed it. No sense trying to short now.

I understand your position. You have been smart to hold back until now. But sometimes the tape does not afford you the best opportunities until it is too late, agreed? I just want to know better your thinking.

Fleck: I'm not worried about being too late. That thought process can lead to real pain. You are worrying about an event that is not too likely at this moment. Probabilities can change. If that outcome seemed more possible, I might buy some out of the money puts.. Then again, my gold position would almost certainly go nuts, so I wouldn't feel too pressured to act on the short side. You can't just walk around short because you want to capture an unlikely outcome. I'm paying attention, but have just not felt the timing has been right to beef up shorts or puts. I just have two modest short positions, neither of which are working.
(posted: 6/16/2023)

Q: Onion: Crypto Leaders Call For Infusion Of 20 Million Dopes To Stabilize Market

Fleck: These days real life stories are often hard to separate from Onion spoofs.
(posted: 6/16/2023)

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