When US markets hit new lows few days back everyone was bearish from regular analysts on CNBC to bloggers who post about markets and trends. But, there was a class of these species which thought its "the" bottom, while some thought its "a" bottom. I was in the last category and thought this should be "a" bottom for few sessions, then it will resume the downtrend and the last support is at 2002 lows.
My friend Moyo posted his views on his blog which I found quite a bit interesting. He says the markets have tested bottom and are poised for a rally, also, he says thursday (today) the data on GDP will clear things about wheather US is in recession or not. My first reaction was WHAT????? but instead of repying to that post I thought to post my detailed views here.
If one thinks the lows have been tested and a time for "sustainable" rally is here, then better go to some remote island and relax for few months. If its a vertical up move after such a big sell off, then certainly it is a bear market rally which will fizzle out sooner than later and chances of new lows are more than ever before. To all my readers: there is no BOTTOM for now. For traders, there is definitely a trading opprotunity, but for investors, its nowhere close to bottom.
As far as GDP is concerned, you should keep in mind that GDP of US of A is based on NOT the factory output BUT the consumption by people, which is illusiory by definition. How can Gross Domestic PRODUCT be higher by people buying things they don't need with the money they don't have !!! But, the fact is, people live in illusions and wouldn't listen to me and so they would believe their GDP is growing with increasing spending with borrowed money !!! All this is magic of Fiat Money combined with fat Fate.
Moyo says " Thursday is expected to be another interesting trading day, with the release of the third quarter GDP, this will help clear the air as to whether the US is in a recession or not". How come? US is definitely in recession. Why do you need more data to counter the FACT?
Anyway, what I say was not popular and I do not expect it in near future either. But, the facts can not be changed by data.
God bless America...
God bless humans...