Below is the recent snapshot. What a difference from the charts of the major indices.
It does make sense. The big institutions that are gambling in these markets : pensions, insurance annuities, 401k managers, etc. need growth. While they could stay in cash for awhile the very act of doing so would eventually eat down the principal and end the game. These funds are paying out money each month and if they don't grow then their principal goes away and with it their ability to continue gambling for dollars. They are done growing as a result of population growth. The boomer bubble is passing through like a watermelon through a python; once the bump comes and goes, there is nothing left in its wake. No new crop of cash-flush investors will be taking the place of the boomers who were themselves playing catch up in their retirement years (the poor suckers...). The damage that is about to be done to the markets should be of historic degree.
When comes the day that these funds are shut down because government had to come in and clean house due to missed payments, woe, woe, woe to those running these scams. I don't mean Joe's investments here. I mean Goldman Sachs, JP Morgan , Bankrupt of America and Merrill Lynch. So as Citibank's Ponzi Prince (Chuck Prince) said just before the meltdown began in 2007:
"“At some point, the disruptive event will be so significant that instead of liquidity filling in, the liquidity will go the other way. I don’t think we’re at that point.”
“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing,”.
All the pension fund managers are still dancing and lying to everyone telling them that their retirement money is safe when I know for an absolute, math-don't-lie fact that it is not safe and in fact a big part of it is simply missing and replaced with IOUs that the borrower will never be able to repay.
It is first wave behavior for only some of the herd to begin running and getting excited. The stronger players play it cool. We will know that the 3rd wave is upon us when all stocks and bonds and derivatives of every kind are falling down around our heads in unison. We will know that the system is in serious trouble when trades are either lost or simply fail to clear. I do not think that markets, even shorting, will remain calm when the 3rd of 3rd is rumbling through. At some point, government might even seize people's accounts just because they still have cash in them and government will need the cash. They can call it a 1 time "ability to pay assessment". Don't laugh. The odds of these things occurring at some point are in fact quite high.
But for now we are still only just likely finishing wave 1 down and so the stronger companies - the ones with perceived growth opportunities - are still looking good and in fact during wave 2 up for the markets I expect SYNA to put in a 5th wave either red or blue paths. The clear sell signal here would be if the blue path is taken resulting in a small throw over of the top rail as shown which then comes back down into the channel. At that point a big decline down to perhaps $20 is likely according to this model.
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