DOW JONES HEAD&SHUOLDER PATTERN HINTS TO CORRECTION.
THE DAILY CHART HINTS TO AN HEAD&SHOULDER PATTERN. THERE A TIGHT RANGE PRICE ACTION 23000/24150 THAT DEFINES ALSO A CONSISTENT RESISTANCE
INLINE WITH THE ICHIMOKU TENKAN LINE. A FIRST SELL-OFF SHOULD OCCUR TOWARD THE KIJUN LINE, AROUND THE DOW30 22750/22780 AREA,
THAT WOULD COMPLETE PROBABLY THE RIGHT SHOULDER OF THE PATTERN, WITH A POSSIBLE CORRECTION TO THE DOWNSIDE TOWARD
DOW30 21000, BUT ALSO TESTING THE Q1 LOWS AROUND DOW30 18000.
THE BUY ACTION IN THE STOCK MARKET DOES NOT REFLECT THE ECONOMY, THE SPECULATION HAS BEEN DRIVEN BY LARGE CAP IN TECH SECTOR,
WHILE THE OVERALL ISSUES UNDERNEATH THE SURFACE OF THE STOCK MARKET, ACROSS THE STRUCTURES OF COMPANIES BALANCE SHEETS,
THE VERY HIGH LEVELS OF PRIVATE HOUSEHOLDS DEBT AND CORPORATE DEBT, THE CONSISTENT CASHFLOW SHORTFALLS IN MANY OF THE STRUCTURED FINANCE PRODUCTS
AS CLOs AND THE CMBS, MBS MARKETS, DO FORESEE A NEGATIVE FINANCIAL SHOCK, WITH SERIOUS LIQUIDITY ISSUES, THAT THE FISCAL SIDE CAN NOT PREVENT, IN TERMS OF FINANCIAL STABILITY.
THEREFORE, IT'S VERY MUCH POSSIBLE TO ARGUE THAT ANOTHER LIQUIDATION IN DERIVATIVES MARKETS, ESPECIALLY IN THE CLOs AND CMBS MARKETS WILL BE NECESSARY,
AS PRIVATE FUNDS AND LARGE BANKS HAVE ON BOOKS, POOLS OF LOANS AND CMBS, WHERE THE CASHFLOW ARE ALREADY IN DISTRESS AND THE RATE OF RECOVERY OF THE ASSETS
IN REAL TERMS CAN BE MUCH LOWER THAN 60% TO 50% OF THE EXPOSURES, ACCORDING TO THE MORE OPTIMISTIC RESEARCHES MADE BY RATING AGENCIES, GIVEN ALSO THE VERY LARGE AMOUNTS
OF DEBT THAT BANKS HAVE UNDERWRITTEN WITH THE PPP, LOAN SCHEME FOR BUSINESSES.
ANOTHER LIQUIDATION OF DETERIORATED CREDITS, FOR BANK BALANCE SHEETS AND HEDGE FUNDS THAT TRANSACT WITH CREDIT DERIVATIVES AND PRIVATE EQUITY WILL BE NECESSARY,
THEREFORE STOCKS AND WITH EQUITIES CAN SEE TO BE OFFLOADED AT VERY HIGH AND GENEROUS PRICES, IN ORDER TO GATHER LIQUIDITY, FOR THE NEXT DEBT CYCLE, THROUGH THE FEDERAL GUARANTEES.
INLINE WITH THE ICHIMOKU TENKAN LINE. A FIRST SELL-OFF SHOULD OCCUR TOWARD THE KIJUN LINE, AROUND THE DOW30 22750/22780 AREA,
THAT WOULD COMPLETE PROBABLY THE RIGHT SHOULDER OF THE PATTERN, WITH A POSSIBLE CORRECTION TO THE DOWNSIDE TOWARD
DOW30 21000, BUT ALSO TESTING THE Q1 LOWS AROUND DOW30 18000.
THE BUY ACTION IN THE STOCK MARKET DOES NOT REFLECT THE ECONOMY, THE SPECULATION HAS BEEN DRIVEN BY LARGE CAP IN TECH SECTOR,
WHILE THE OVERALL ISSUES UNDERNEATH THE SURFACE OF THE STOCK MARKET, ACROSS THE STRUCTURES OF COMPANIES BALANCE SHEETS,
THE VERY HIGH LEVELS OF PRIVATE HOUSEHOLDS DEBT AND CORPORATE DEBT, THE CONSISTENT CASHFLOW SHORTFALLS IN MANY OF THE STRUCTURED FINANCE PRODUCTS
AS CLOs AND THE CMBS, MBS MARKETS, DO FORESEE A NEGATIVE FINANCIAL SHOCK, WITH SERIOUS LIQUIDITY ISSUES, THAT THE FISCAL SIDE CAN NOT PREVENT, IN TERMS OF FINANCIAL STABILITY.
THEREFORE, IT'S VERY MUCH POSSIBLE TO ARGUE THAT ANOTHER LIQUIDATION IN DERIVATIVES MARKETS, ESPECIALLY IN THE CLOs AND CMBS MARKETS WILL BE NECESSARY,
AS PRIVATE FUNDS AND LARGE BANKS HAVE ON BOOKS, POOLS OF LOANS AND CMBS, WHERE THE CASHFLOW ARE ALREADY IN DISTRESS AND THE RATE OF RECOVERY OF THE ASSETS
IN REAL TERMS CAN BE MUCH LOWER THAN 60% TO 50% OF THE EXPOSURES, ACCORDING TO THE MORE OPTIMISTIC RESEARCHES MADE BY RATING AGENCIES, GIVEN ALSO THE VERY LARGE AMOUNTS
OF DEBT THAT BANKS HAVE UNDERWRITTEN WITH THE PPP, LOAN SCHEME FOR BUSINESSES.
ANOTHER LIQUIDATION OF DETERIORATED CREDITS, FOR BANK BALANCE SHEETS AND HEDGE FUNDS THAT TRANSACT WITH CREDIT DERIVATIVES AND PRIVATE EQUITY WILL BE NECESSARY,
THEREFORE STOCKS AND WITH EQUITIES CAN SEE TO BE OFFLOADED AT VERY HIGH AND GENEROUS PRICES, IN ORDER TO GATHER LIQUIDITY, FOR THE NEXT DEBT CYCLE, THROUGH THE FEDERAL GUARANTEES.
Yorum:
POTENTIAL TAIL RISK FOR DELEVERAGING, GIVEN ACCUMULATION OF DEBT LEVERAGE
