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What Will Wall Street Do With Europe on Holiday 5/1/23

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Today is Labor Day in France, a public holiday throughout Europe. In the UK, it is a floating holiday known as "Early May Bank Holiday." Charming. In Germany, it's also Labor Day. In Italy it is "La Festa dei Lavatori," of the Festival of the Public Restrooms, because there are so few of them. 

And that's about how it is. 

In terms of the US market, we had one of the all time great shakeouts last week. Just look at that breakdown in the ES 24 hour S&P fucutures. It measured to 3970. Oops sorry. Just kidding. Down the elevator, up the shaft. Ha ha. But as I always say, it's one thing to cross an oft crossed trading range. It's another to breakout. That's because when ground has been tread over and over in the space of a few months or weeks, the range gets thinned. There are fewer bids and offers, so prices can zoom upward because there's no supply inside the range. 

It waits at the top of the range, though, and at the same time, there's a 5 day cycle sell signal. By rights, this "should" pull back. But there are no "shoulds" in this business. There are only ises. What is is what matters. So remember, there is only is, not should, is. 

-wrzh

The next question is whether bears shit in the woods. The answer, as we know, is yes. And also in the fields, and on the beaches, and in the hills, and on the landing grounds, and in the banks, and so on. Are we out of the woods? No. Do bank failures matter? Apparently not.

Therefore, be on the lookout for shitting bears. What do bears do when they shit? They cover their shorts.

Technical Trader update for the longer term view coming up at about 8 AM ET. 

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Market Bullback Was a Masterful Shakeout and Setup!

What’s a bullback? It’s a pullback where the bull herd just backs up and then charges.

A lot of traders were feeling vindicated in the pullback early last week, because the market “shouldn’t” be this high. But there are no “shoulds” in this business. There is only what “is.” And if the market xxxxxxxxx xxxx xxxxxx xxxxxx xxxxxxx , it will probably do a lot of things that most traders, particularly those of the bearish persuasion, think shouldn’t happen. So here’s what to beware of. Non subscribers click here to access.

Technical Trader subscribers click here to download the complete report.

Not a subscriber? Get price and time targets, and weekly swing trade chart picks, risk free for 90 days! 

These reports are not investment advice. They are for informational purposes, intended for an audience of investment and trading professionals, and other experienced investors and traders. Chart pick performance changes week to week and past performance may not indicate future results, as you know. Trading involves risk, and these reports assume that you understand those risks and manage them according to your tolerance. 

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F U Pay me:

 

From Bisnow. “Lenders are getting impatient. Check-in desks and rooms need a tuneup. These are the kinds of challenges coming to a head in the hotel landscape that are expected to help thaw the recent freeze in the industry’s financing markets, several executives said. ‘The lender is saying ‘I’ve extended you for the last three years, you gotta pay me.’ Brands are saying ‘you haven’t reinvested in your assets, you’ve gotta do that.’ You can’t just keep kicking the can,’ said Peachtree Group Chief Investment Officer Brian Waldman.”

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The tax base:

Omaha WOWT in Nebraska. “Vacant lots and high-interest rates hurt more than just the property owners. They could hurt everyone that benefits from county programs. ‘We have one source of revenue, and it’s property taxes,’ said Douglas County Commissioner PJ Morgan. Morgan pointed to 90th and Dodge as an area of concern. ‘You’ll see that almost every building has ‘for lease’ signs on it,’ he said. ‘There are floors in Regency that have been vacant for two to three years.'”

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Triggered:

 

The Vancouver Sun in Canada. “Over the last year, the Duecks’ mortgage payments nearly doubled, increasing by $2,600 a month. The Duecks are far from alone. When borrowing rates fell to record lows in recent years, about three out of every five Canadian mortgage holders chose variable rates, up from the typical average of about one-third, said Brendon Ogmundson, the chief economist with the B.C. Real Estate Association.”

A ‘trigger clause’ is hit when the static monthly payment isn’t high enough to cover rising interest costs, and then the borrower has to start paying more or stretch out the amortization of the mortgage.”

‘No one ever paid attention to (the trigger clause) because it was ‘when pigs fly’, he said. ‘Well, pigs flew last year.'”

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JPM buying of FRC only further concentrates the risks.  Banking consolidation has been going on for years and will almost certainly continue.  A day will come when this leads to a most unfavorable outcome.

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45 minutes ago, BurntOnce said:

flowers are blooming, but not a bee in sight. this is mass extinction.

We maintain two hives constituting I’d guess 80,000 bees in our backyard. Best damned honey ever. Tried to catch a wild swarm last week to add a third.

Become a beekeeper. 

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23 minutes ago, Jimi said:

We maintain two hives constituting I’d guess 80,000 bees in our backyard. Best damned honey ever. Tried to catch a wild swarm last week to add a third.

Become a beekeeper. 

If this market goes on like that I‘ll become a barkeeper.

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2 hours ago, WTF said:

JPM buying of FRC only further concentrates the risks.  Banking consolidation has been going on for years and will almost certainly continue.  A day will come when this leads to a most unfavorable outcome.

One thing we can bank on. A day will come when we'll all be dead.

Anything else, not so much. 

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