Author: Lawrence Chan

What a week for the stock market! First it started out flushing lower below previous week low. Then, a last moment turn around Friday saved the week from falling further. Bulls are cleansed out. Bears are cleansed out. Next week a new game begin.

Here is someone who is bullish on the short term outlook but still calling for a 50% crash.

A very interesting video from Hugh Hendry. He raised an important question – are these people holding high up positions in these largest financial institutions really having no clue of what they are doing?

As far as I can see, there are no real bears left in the stock market. Pros who shorted this weekly pullback were all doing it based on whatever technical tools they are using. Hence they get out the moment the market is no longer dropping. No one cares about geopolitical risk or the ongoing depopulation risk. Everyone in the game are now fully controlled by their fear and greed. This kind of environment is always one step away from a price shock that can lead to major disaster for the global financial system.

Here is a nice recap of how close we were from a global disaster that of course would lead to total financial meltdown. I will argue that we are very likely going to see such an event soon and this time we may be running out of luck.

This weekend is a long weekend for Canadians because our Thanksgiving holiday is one month earlier than the US one. So while my Canadian friends are celebrating or taking a break, I am working as usual.

Happy Thanksgiving my fellow Canadians!

Enjoy this weekend all!

Third quarter end this year now being the worst quarter end on record for the major indices. However, the bulls are so high right now that their all important support zone is saved. Many of them loaded up on this “pullback” target looking for at least a retest of the year high. Even more interesting, the so-called bears out there all covering their shorts at this same zone as they can’t see why the stock market would go much lower.

In other words, everyone is bullish now, unlike what the AAII sentiment suggested. Actions speak louder than opinions. What if something out of the the blue happens, like, Bank of Japan fails to defend their financial system? Anyone really paying attention to the global financial system stability at all?

Or, what makes it alright to let the US Federal government to shutdown when US is actually at war with every non-NATO nations in the world?

I find this great example on ChatGPT that shows how stupid it really is. Of course, AI enthusiasts will say that we can train it to solve these problems too. What they failed to see is that by Godel’s Theorem, this blindspot within an AI system will forever not be able to get the correct answer with just a little twist to the conditions. In short, as I pointed out, AI will always be the most useless and being harmful when you seriously need it to help you solve a real problem.

Here is an interesting video update from David Lin talking with Milton Berg on what will happen next in the stock markets. Berg called the top successfully for the year so far so his opinion is definitely worth listening to.

Bill Ackman showed up at CNBC’s Delivering Alpha Summit and gave his insights on the current market environment. His bond short trade is now another legendary move on record. His talks are always interesting.

For my Asian fans, Happy Mid-Autumn Festival!

What a difference a day makes … Bulls thought that they have Friday in their pocket after two consecutive selloff days. However, they are not strong enough to fend off the selling in the afternoon. Now, they are facing the first bearish weekly close that can threaten more downside in coming two to three weeks.

Right after FOMC announcement, Jeff Gundlach joined CNBC to comment on their decision on interest rate. What matters though, is that he has a webcast to his clients two weeks ago on the current market conditions. This webcast has a lot of very good information regarding various segments of the economy. Watching that will give you a much better idea why Gundlach said in that short comment.

Although I don’t like Peter Zeihan’s comments in general, there are something that is obvious yet people choose not to pay attention to. Hence, his take on China’s imminent economic collapse is important. It gives everyone who do not care what happens in China a chance to be prepared for the impact on the rest of the world.

Michael Gayed, whose favorite posts on X lately, is that something is f#*ked! I actually find his takes on the current market environment is on point. Unlike Ray Dalio, trying so hard to sugarcoat the fact that US and its allies are f$#ked, Gayed has explained in details of his approach and how the world, with majority of its participants all blindsided, that some odd event can trigger massive price adjustments in many financial markets.

Back to work for me as usual.

Have a great weekend all!

Another extremely wild week ended for the stock market. Everyday it is as if something surprised the market and forced it to go in the opposite direction from the day before. By Friday close, it ended up closing somewhere near the close from the week before.

Jeff Gundlach talks about the current economy just several days ago. His detail explanation of the mortgage market is something anyone who has a mortgage should watch and learn from.

I loves this old video from Thoughty2 on fake martial arts. I find it very funny because I have watched many demonstration videos lately, from so-called martial art masters in China, demonstrating their so-called incredible fighting skills. I totally understand why these people have to boast because they need to make money from teaching their “arts”. However, fancy moves execution does not equal to ability to fight …

Jim Bianco’s take on energy prices actually matters. The price of gas here has been going straight up week after week. The pain is felt and a frequent mention in local news on TV. Looks to me it will wreck the economy hard for a long time.

Going back to work now. I have a long list of things to take care of this weekend.

Have a great weekend all!

Next week is quarterly option expiration for stocks and stock market indices, it will be interesting to see how next week unfold due to another inside week was formed. I bet a very intense battle between the bulls and bears will start next week as majority of the professional traders come back from their summer vacation.

A very interesting take of the current stock market environment by Milton Berg, who successfully predicted a rally since early 2023.

Jeff Snider has made some very good points on the impact of higher oil price.

The Juice Media finally roasting Canada. Enjoy!

As usual, weekend is the time I catch up on m work. The only difference this time is that I am working from my cottage overlooking the lake. I am hoping a nice change of environment may help improve my productivity.

Have a great weekend all!

Another Non-Farm Payroll week that caught the perma bears by surprise. And the silly bulls are dancing and celebrating their victory. Both camps should calm down and enjoy this long weekend. Relax! Next week can be something completely different, again.

I found this documentary on Mrs. Watanabe a great summary on this subject and its effect worldwide. If you have never heard of this, its definitely worth watching the whole video.

Brent Johnson of “US Dollar Milkshake” fame discussing the effect of China’s economic troubles.

A good overview of the current trading landscape across multiple markets including bitcoin, AI, etc.

As a short term trader, I don’t have strong opinions on long term outlook for the markets I trade. However, I notice madness is developing among many market participants. People can’t help themselves arguing all day on trading forums and X (formerly known as twitter) about where the market is heading.

One thing all investors and traders must remember is that how a market unfold in the future depends on its participants’ perception of the future but their views can change abruptly due to external events. For example, aliens suddenly declare their existence among us can totally disrupt our world. People keep saying these things are unpredictable so they choose to ignore such risk. Is ignoring these risk really make sense?

Although it is a long weekend, I have no time to take a break. Maybe sleep a little longer tonight?

Have a great long weekend all!

After 2 weeks of volatile swings in the stock markets, we had a relatively quiet Friday to conclude the week. Next week we have option expiration week again for the month. I think another volatile week is coming so get ready to deal with it my fellow traders.

For those of you tracking many markets, here is the weekly take from Gareth Soloway on David Lin’s show.

Here is a funny clip of Cathie Wood on Bloomberg TV. It is very clear comparing this latest clip of her vs the ones from her good days when ARK was flying higher thanks to the bubble stocks she bought, that her words are no longer coherent. In the past, she bullshit her way using completely illogical garbage with ease and confidence. As a minimum, we know she does not know what is going on and obviously no idea what to expect next.

Here is a clip of Jordan Peterson’s statement regarding the future of his license in Canada. My take on this is clear – there is no future for countries like US, Canada or the West thanks to this path they are going down. I an see that these countries will crumble into chaos within a decade. How people will survive in these countries going forward can be very challenging.

Another weekend full of unexpected issues to deal with. As a start, one of our servers just suddenly stopped working middle of the week. Luckily I have backup servers ready for such situation. But then we have to build another backup server to stand-by. That’s the life of a CEO, when there are problems beyond the workload of your team, you are the last resort to solve the extra problems.

Have a great weekend all!

The first week of August was also the end of July 2023. What a week!

The extreme opposite reactions to the earnings of Apple and Amazon is a sight to behold. funny thing is, they kind of offset each other and leaving the stock market indices mostly going nowhere on Friday.

To understand better how we arrive at this dysfunctional world of stock market indices, check out Patrick Boyle’s latest video. His dry rumor helps. His example of Sun Microsystem from 1990s hits home. Back then I have to use their computers to do more advanced research.

Another bout of bull vs bear here.

First a bear who believes that there is easily a new high coming before a 50% crash. Since I do not agree with most of the technical analysis out there so it is not my view on what may unfold in the future.

Next is a bull who thinks new highs coming.

Notice that both bulls and bears are actually agreeing that a new high is coming … the bears are actually bulls in disguise.

I will repeat this again – the financial system worldwide is a fuckery of numbers at this point that completely behave like an American football game. Knowing who is in control of the tape at the moment will tell you where the particular market is heading. Few people understand this.

Such a dynamic system (or better called a chaos system) is very unstable. Anytime a critical event happens, the whole system will collapse.

One such concerning event is the flooding in China. It exposes how fragile it is with the modern technologies people all praising as the future. Cell phones, electric cars, etc. all render useless. The disaster hitting China is also the near future of US and the western countries as Earth changes continue to reshape the world. The financial impact of the flood in the world will be felt very soon. So embrace for the impact while you can.

I picked the story because it is posted by Reuters so not at risk of being removed suddenly.

Have a great weekend all!