Reviewing The Most Recent Market Crash - The Who, What, When, Where, Why, of the Story

Reviewing The Most Recent Market Crash 

The Who, What, When, Where, Why ,of the Story

First off a reminder: 

The Stages of Grief - shock - anger - blame - denial - (bargaining phase) depression - acceptance. 

After the shock, people predictably don't waste much time trying to find someone to blame, and we saw Kamala Crash trending almost immediately, as if she had something to do with it. 

Next we saw the lame stream media, and institutional investors trying to blame the Fed, for not cutting interest rates, again 🙄 

 The Who...?: 

 Last week's market correction has nothing to do with Kamala Harris, or the most recent FOMC announcement, and everything to do with the global market collapse, I've been predicting for several months. 

OK, but who caused it? Over leveraged currency traders... but there has also been news that Warren Buffett was a seller, so he should probably take some responsibility, and Buffett has the bankroll...   

I'm sure you've heard the now infamous Buffett quote: "Only when the tide goes out do you discover who's been swimming naked". All you have to do is find which markets took the most damage to figure out who was swimming naked....    

As it turns out Warren Buffet did very well: 

Warren Buffett's Berkshire Hathaway holds more U.S. Treasury bills than the Federal Reserve insurancenews.com

What: Treasury markets, and the $YEN Carry Trade. That caused Crypto, and highly speculative technology stocks to collapse. Small Caps and Financials were also taken down, after retesting the recent highs. Several markets were, "Pumped 'n' Dumped.   

When: I first suspected that the Japan rally wouldn't last, when it broke out to new highs in early July.   

Lucky for me; the wife's 401k remained in a safe fund:  

I could gaf about these idiotic summer rallies. The wife's 401k remains in a stable bond fund, until further notice.

— Veteran Market Timer (@3Xtraders) July 11, 2024

The Big crash didn't take place until August 5th; a Monday morning surprise. 

Luckily I didn't didn't go long Japan, ahead of the weekend, but I'm sure many did find themselves caught in a bull trap....  

Where: Market's crashed, from Stockholm, to Japan, and all points in-between, yet several markets, and even the DOW continues to trade above last month's lows.  

As most of my Twitter followers already know, I started alerting to a possible crash in Japan around July 11th, and that is where I started selling Japan using the leveraged bear fund $EWV.  

If you sold Japanese stocks using the leveraged Japan Bear EFT $EWV, you were up 20% in 2 days $NIKK $SPX pic.twitter.com/eddFinJAAE

— Veteran Market Timer (@3Xtraders) August 3, 2024

Why: The market collapsed because the Carry Trade was unwound at light speed, and that caused the Japanese Nikkei to fall 10% overnight, and everybody who followed the Warren Buffett Japan Trade was caught off guard. Of course several hedge funds probably saw this coming, and decided to use this as an excuse to take several US markets lower, in an obvious bear raid.     

Is this the big one? Probably not. This looks like a dress rehearsal, for what I suspect is coming in 2025. 

If the $SPX continues lower, then the next level to watch becomes the 200 day moving average.  There's still a lot to sort out, and it's turning out to be a lot of work, getting a handle on a crash like this one. There are better trades than in the $SPX, but this is what most investors still stay glued to.  

Take Care, 

AA 

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