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Monday, November 7, 2022

Market Update 11/7/2022 - Did The Market Get It Wrong?

Note: If you're not receiving the Weekly News Letter, check your spam folder.  

The Biggest News of The Week, was of course the FOMC Announcement

The Fed

The Fed didn't exactly Pivot, but it added some new language, when that they said that some time in the near future they will, "take into account "cumulative hikes".

That was enough to send the $VIX plummeting - just as I had predicted it would... - but then why did the market also sell off? Powell tried to sound hawkish, and that probably triggered some algorithmic trading programs.... and it was a good excuse to sell (the news).   

As I've been saying for weeks, the market needed to pull back, after it's big run up into the end of October, so this looks like the "sell the news" event, we were expecting...  

See: Thursday's market update     which encapsulates, how we got every move right! Not an easy thing to do in a sideways market! 

The broader market continues to trade in the same range it's been trading in for the past week, and in the same range we were trading in back in June/July. Even the NASDAQ continues to test those same levels.     

Volatility returned on Friday 

Most traders probably didn't even notice the $VIX close off the lows, but it did, and I have more than a sneaking suspicion that the market correction that started last week, is far from over, and if the $VIX can break out above the 26.50 level, and gain some traction above the previous high of 26.87, then you can expect that the gains we saw on Friday, are about to quickly vanish.

Did the market get it wrong on Friday? That's the big question!     


Friday's action included another little short squeeze in China - which I was lucky enough to be on the right side of - and that was enough to lift Oil, and US equity markets.  

Any excuse is a good excuse for a Friday short squeeze, it seems, but has anything changed in China?

All you have to do is google (news) search China to know the answer to that question. 

China exports unexpectedly shrink, as global slowdown jolts demand CNN

China 6 month Covid high, and sticks with 0 covid policy CNBC  

China Lashes Out at "visit" by UK trade minister, to Taiwan

 Japan gears up for a possible war with China. 

Confirmed - 3 weeks ago  

US, Japan conduct large-scale military exercises in Hokkaido

The Fed announcement doesn't seem so important now does it, when the powers that be seem to be gearing up for what can only be described as World War III? 

Seems to me, they need to distract from the coming societal collapse, and blame China, and Russia, rather than their own monetary policy, but I also suspect that they are trying to engineer a nuclear winter in order to cool the planet.    

I plan to delve into that that topic in a future blog. The biggest threat to humanity - second only to nuclear annihilation - is climate engineering, but the powers that be, prefer to play God with the weather than to take the proverbial foot off the gas, when it comes to exponential growth, in the global economy. 

If you're unaware of the unfolding climate catastrophe, and the global governments efforts to contain it, then I encourage you to look at the evidence. 

Himalayan Plateau Is About to Fall Apart Due to Thawing Permafrost 



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