Saturday, March 19, 2016

[UVXY] update

The UVXY model from the backlink busted quickly and cleanly (if a model is going to bust, this is the best way to do it...) and UVXY hit an all time low.  But it may be in the process of forming a large falling wedge that matches the DJIA HT and so it is well worth watching.  My count is below.  It calls for one more small move down before reversing up strongly.  If the small move down happens I will buy it and then set tight stops.  There are no guarantees in the stock market, not from anyone.  Not from the biggest names out there.  I would wager that I am kicking most of their asses this year in percentage terms (well over 70% already).  The main reason is that they buy based on a theme.  Thus, they hold even though the shares are moving against them because their theme is still intact.  Then when they are down 10 or 20% they go on TV and tell you they aren't a market timer.  I call this falling in love with a stock.  Or maybe more to the point, falling in love with your ego to the point of not being able to admit failure (and the quicker the better!).

I say that if you aren't a market timer then you are a fool because stocks are a very recent invention in the history of man and they have no intrinsic value.  Just ask the good people of Iceland how much their retirement accounts that were all stored in stocks are now worth.

Lemme ask you something:  do you think the people of Iceland are stupid?  Backward?  3rd world?  They are none of the above.  They modeled their Paper Ponzi on every other western economy.  The only difference is size.  They are small and therefore are a smaller economic flywheel.  Thus a smaller wind was able to blow their house of cards over.  But the same fundamentals that were behind this collapse will eventually catch up with the US stock market either in nominal value (most likely) as a result of deflation or in buying power as a result of massive inflation.   Some day it is all going down the toilet just like Iceland, just like Greece, just like everyone else will as well.

By the way, those who saved their retirements in gold are smiling ear to ear.  Now they can move some of their wealth into stocks if they want to but at pennies on the dollar...

1 comment:

The Duke said...

The market is risen so quick since Feb that it's now obscenely overvalued again. I picked up some UVXY today at 21.5 and SPXU at 29.22

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