Please, Over Speculation? Its the FED silly

A Few Technical Charts

Ok so we had to post something in regards to the continued call for the Fed to clamp down on speculation, or shall we say “over speculation”, which is evident from the Zhedge post today noting these facts:

• An explosion of SPAC / IPO issuance, $850B of margin debt or 75% above 2015 levels

• The most shorted equities up 75% vs. 16% for the S&P 500 since October (bulls running over bears)

• Record high call vs. put volume with the little guy leading the charge

  Stating that “the risk reward is atrocious from a long perspective in U.S. equities.”

Let Magnelibra Econemotions be very explicit and clear on this point. Let us walk you dear reader down a path of reality, down a path of a rigged game, down a path by which nothing ever really changes except the actors names and even then, quite often the actors themselves, don’t change, they just get greyer as they age!

We have been an active participant since the late 90s and the facts we just outlined are axioms we have long maximized, synthesized and have etched firmly into our ethos.

The writing on the financial walls have been clear for a very long time, that is:

DEBT DOES NOT MATTER

We can battle long and hard about the reality of our matrix, or you can just submit now as this is over 2 decades of active trading from all sides telling you not to be fooled by the talking bobble heads. They will tell you inflation is going to run away that break-evens are rising, that all this “stimulus” will lead to end user inflation and that the equity valuations will have their day of reckoning.

Yea well even a broken clock is right twice a day, which is a far better record from the bears out there. Once you understand our system is rigged you will then realize that the only chance one truly has is to take directionality out of it and instead focus on these two important facets of the investing game:

1. RISK

2. TIME

These two factors should alleviate your daily volatility if you just abide by the rules that each one of them place on every single investor that is out there, doesn’t matter if your a small time player or a big whale, your reality is YOUR REALITY and not someone else’s. You cannot control whether the markets rise or fall but rather your own risk at any one particular base unit of given time.

All of this is why No Limit Texas Holdem is in our opinion the cleanest most pure poker game that exists, its a testament to your own inner strength vs exogenous variability and chaos. Trading and investing in the markets is no different than this simple game, well its really not that simple, but you get our point.

So, when we see continued calls stating things are over valued, for runaway inflation, for fundamentals to rectify excessive risk and speculation, take cover, its garbage, its main stream news, fluff, take it from us, we have seen a market or two or three and know very well the power of the global central banks. Their power is simply invested not in QE per say or raising debt to infinity, but rather to simply “BUY TIME.”

That is truly what they excel at and at this time, in this day and in this age in this very place, we see nothing that changes that theme!

Sure Covid could flare, Bombs could fly, but the reality is, for those prudent enough to recognize Risk & Time, you should have plenty of ammo to put those chips to work when the house of cards does come tumbling, because in very rare cases, Equity markets do indeed fall, just don’t try and convince the masses, they will never believe you!

Alright, here are a couple of charts we are looking at today, first up you can see how the 50eMA did its job and holding the initial slide and now bounce, gotta love the panic sell into a panic buy don’t yah:

Next up is the Ultra Bonds where longer term supports are holding once again, and renewed vigor will come with a break above the 208 handle in the March contract. However remember quarterly US Treasury refunding is right around the corner so we can’t get crazy yet:

Finally the Dow, what stands out here is that its only some 5% above per Covid highs, which tells us that the broader markets continue to suffer vs the all might TECH and we would be looking here for any real signs of overall Equity market weakness to commence:

Alright that’s it, we will post our settles when today washes out, for now thing about joining the ranks that subscribe and get our thought process when we see things that are relevant, that matter and not just the BS fluff you get everywhere else. Your support is greatly appreciated. We write about the equivalent of one book a year on this site and the volumes we speak should transcend a lot further than these pages. You should be able to implement a lot of this into your game plan not just in trading, but in all walks of your life. We are in this together whether you believe that or not, it doesn’t matter, we are all connected, so stay positive and know your atoms do have an affect on everyone else around you, so STAY CALM and SIGN UP TODAY!

-Magnelibra Econemotions

DISCLAIMER: For educational purposes only. This is not a solicitation to buy or sell commodity futures or options on neither commodity futures. The risk of trading securities, futures and options can be substantial and is not for everyone. Such investments may not be appropriate for the recipient. The valuation of futures and options may fluctuate, and, as a result, clients may lose more than their original investment. Nothing contained in this message may be construed as an express or an implied promise, guarantee or implication by, of, or from the author Michael Agne owner of Magnelibra Capital Advisors. We will never claim that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Although care has been taken to assure the accuracy, completeness and reliability of the information contained herein, we make no warranty, express or implied, or assume any legal liability or responsibility for the accuracy, completeness, reliability or usefulness of any information, product, service or process disclosed. ALL RIGHTS RESERVED 2021