- If you want it, here it is Come and get it. Mm. Make your mind up fast If you want it, anytime I can get it But you better hurry 'cause it may not last Did I hear you say that there must be a catch Will you walk away from a fool and his money?
- Badfinger
...our intuition is coming into reality. There could be a bounce, but the market is going lower. With the market at highs, why do you say that? Good point. The market is not in harmony as I will point out. With that said, the Chinese market, the Hang Sang (HSI) has seen a great decline, but it appears to have tested its lows. It is now rising. This is disharmony. We, at Evolution will continue to look at market volumes for conviction. However, since we generally discuss the US market, although we are in a global network, I will start with Home Depot.
It was the best performing stock in 2021. Now, what do we see? It is forming a "M" pattern. Some call this a reverse Head and Shoulders pattern. It is bearish. The price could and probably will return to its consolidation level at $335. Keep in mind that it just touched a high at $420. Watch the volumes on this pullback. HD is on the Big Board. How about NASDAQ? Let us look at the 3Qs.
QQQ
The charts say that it is going to the lows. It will probably fill a gap at $360. It is definitely game. This means a lot of the NASDAQ will fall with it. Still not satisfied. In the spirit of fair play, I throw out this for you.
AMZN vs. BABA
These two online powerhouses are the biggest in their nations. What do we see? Amazon is dropping. It has already fallen over 10%. It has a P/E ratio of over 63. Alibaba has already tested its lows. It has a P/E ratio of 18. It has a better price, larger market in the same business. This is no indorsement. I do not buy anything Chinese until they play fair to which is probably never.
This is not everything that we see. We look at the big picture and trend. This movie is a disaster waiting for the final scene. If you look at Cattie Wood's ETF, she is suffering from withdrawals. The stock is at the 52-week lows. Then, don't forget Evergrande? We have not heard the last ramifications from this real estate developer. In addition, there are serious, dangerous protests occurring in Europe. The Brexit clash with focus on the fishing waters, subsidies for gas and energy in France and Kazakhstan. The border problem with Ukraine and Russia which is really about NATO and weapons deployment. The geopolitical picture is a mess. When a pot is boiling, you do not put a cover on it. We have pots that could be covered in the Middle East, Asia and Africa.
Easy Money Era
This is the heart of our distress. For example, how about Bolt Financial? The share price has doubled in three months with no material reason. The only point that could be made is that BlackRock is now an investor. How about AMC? The movie theater is losing money to the tune of over $5-per share. It has over 500 million shares floating. My math says they are losing $2.5 billion, and the virus is still out there. Oh yeah, their market cap is $10.5 billion. Are you kidding me! They are losing one-fifth of their value on a daily, weekly, monthly and yearly rate. Sing it Badfinger, "A fool and his money..." How about Zoom? Not only is it in a bear market level, but it also shows the accuracy of charting. How about the big financial, JP Morgan? It shows how quickly market perception can change.
Whatever you do and before you do it, watch the dollar. It is finally showing some of the cracks that we were predicting. Keep in mind, when something begins to breakdown, it will test the swing point. If it breaks 93, that will be the conviction sign. Hope you have some gold before this point because at that moment, gold will soar. Finally, we get back to the biggest reason for our distress, the Federal Reserve.
Last week, President Biden appointed (these people are not elected) Lael Brainard to the Fed. All this is another mouthpiece to deflect pressure from the chairman. Anyway, she says, "That she is open to a rate hike in March." Can you see through this BS? First, she is buying time. Second, it is only a suggestion. Thirdly, it gives Powell the entire first quarter not to do anything. It is buying time. A big investor, Kyle Bass is on the books as saying, "The Fed is bluffing!" And by the way, what are we talking about? A rate hike of a quarter point still keeps the rate under 1%. Pure BS! How about three hikes? Dear Reader, we will be looking at a Fed's Fund Rate of 1.5%. This is still easy, funny money! This is why we say in order to return to real prosperity with social mobility for all, End the Fed! Peace.
