The Treasury has been working w/ the fed to fund purchases of special purpose vehicles of corporate paper, stocks, and ETFs.
The Fed is accepting these as collateral for loans. They aren't really loans, but a way for Fed/Treasury to inflate the market temporarily so that certain large hedge funds could unwind their leveraged positions which were positioned around the stock buy backs over the last few years.
Wall Street banks were on the hook for huge losses if these leverages positions exploded.
Additionally, chains of asset swaps exposed large percentages of the banking industry to risk very similar in severity and design to the 2009 mortgage crisis.
This entire design was intended for retail investors to get into the market to elevate prices so that the hedge funds could unwind their positions.
My thesis is that once this done, the Fed and Treasury will have to stop printing money to prevent inflation. The Fed's balance sheet is headed to $10T. Tons of money has been strategically dumped onto the market and we are at 0% interest. Extraordinary measures were needed to combat the plague of bad news around unemployment, consumer confidence, etc. Strategically deployed Fed programs and other political measures were taken to accomplish this feat. The timing and targeting of these has been incredible to watch. Every time the market tips at an inopportune time, there comes an event, be it a premature oil tweet, a fed program, or something less public, it has happened on time and targeted specifically to hype the market.
The unwinding of leveraged positions was very heavy on the C point of the Elliott wave. The unwinding at the higher E point is indicative of an accelerated timeline. They overcompensated and took the market higher than predicted. This allowed them to finish unwinding positions quickly.
Hedge funds entered short positions and exited to long positions as the market fell, then entered short positions at the peak on Friday.
This all points to the rug pull. This might merely be the c wave of the correction, but I think it will be more. As the market tumbles back close to the point 1 of the wave, the retail traders w/o hedges and all the main street traders who tried to buy the dip will exit at 10-20% losses. They will panic sell and the price will nose dive.
I think it's possible we see new lows in the next 2 weeks if my modeling of the coronavirus spread holds true. I don't think we are going to flatten at 2500 deaths per day. I believe this will go up to 3500 or 4000. The stupidity we have seen on Florida beaches this weekend, in "protests" to open the country which widely ignored the coronavirus threat, and other such public gatherings will backfire. This will lead to a further increase up to 4500 deaths per day potentially.
Additionally, percentage positive rates are still increases as we have too few tests. New York has indeed done more tests per capita than even S. Korea... However S. Korea's test positive rate was under 3% while New York is at 40%. NJ is at 50%. Georgia and other metro areas are growing very fast and social distancing in the south has been greatly reduced.
I positioned at IWM 115P 6/30/2020.
The Fed is accepting these as collateral for loans. They aren't really loans, but a way for Fed/Treasury to inflate the market temporarily so that certain large hedge funds could unwind their leveraged positions which were positioned around the stock buy backs over the last few years.
Wall Street banks were on the hook for huge losses if these leverages positions exploded.
Additionally, chains of asset swaps exposed large percentages of the banking industry to risk very similar in severity and design to the 2009 mortgage crisis.
This entire design was intended for retail investors to get into the market to elevate prices so that the hedge funds could unwind their positions.
My thesis is that once this done, the Fed and Treasury will have to stop printing money to prevent inflation. The Fed's balance sheet is headed to $10T. Tons of money has been strategically dumped onto the market and we are at 0% interest. Extraordinary measures were needed to combat the plague of bad news around unemployment, consumer confidence, etc. Strategically deployed Fed programs and other political measures were taken to accomplish this feat. The timing and targeting of these has been incredible to watch. Every time the market tips at an inopportune time, there comes an event, be it a premature oil tweet, a fed program, or something less public, it has happened on time and targeted specifically to hype the market.
The unwinding of leveraged positions was very heavy on the C point of the Elliott wave. The unwinding at the higher E point is indicative of an accelerated timeline. They overcompensated and took the market higher than predicted. This allowed them to finish unwinding positions quickly.
Hedge funds entered short positions and exited to long positions as the market fell, then entered short positions at the peak on Friday.
This all points to the rug pull. This might merely be the c wave of the correction, but I think it will be more. As the market tumbles back close to the point 1 of the wave, the retail traders w/o hedges and all the main street traders who tried to buy the dip will exit at 10-20% losses. They will panic sell and the price will nose dive.
I think it's possible we see new lows in the next 2 weeks if my modeling of the coronavirus spread holds true. I don't think we are going to flatten at 2500 deaths per day. I believe this will go up to 3500 or 4000. The stupidity we have seen on Florida beaches this weekend, in "protests" to open the country which widely ignored the coronavirus threat, and other such public gatherings will backfire. This will lead to a further increase up to 4500 deaths per day potentially.
Additionally, percentage positive rates are still increases as we have too few tests. New York has indeed done more tests per capita than even S. Korea... However S. Korea's test positive rate was under 3% while New York is at 40%. NJ is at 50%. Georgia and other metro areas are growing very fast and social distancing in the south has been greatly reduced.
I positioned at IWM 115P 6/30/2020.