Market State

With one sentence the stockmarket is a castle in the air. As is the bond market, the US dollar, several industrial commodities such as steel. Steel for example is too high beyond demand and supply metrics similar to 2007 and people are not realizing that the reason for the steel price increase is that countries such as China are trying to get out of the dollar and would rather hold commodities than the paper as well as projects that have stopped in the past are continuing to be completed now that people have the illusion the crisis is over and credit is a little less frozen -at least in the senselessly risky areas, basically a time bomb- and demand seems to have picked up in the face of diminished production and inventory reduction by the iron ore and steel producers that were almost all going under last couple years due to over-leverage and too much debt. The same scenario is still going on and the crisis yet again around the corner any time. It actually is already here, but people don't want to see it and certain people just do not want you to see it. Those people include the banks, government, and mainstream media that is under the control of the prior.

Complacency and irresponsibility is hot and heavy and momentum trading is back with a vengeance. The crisis will be back with a vengeance, too. The market rally could possibly keep going and quite some distance, too, but at any point it can easily do another down 40-90% without a blink. I would not take this risk/reward structure even if it means I will miss out on some upside. The expected value is negative and the probability of it happening is higher than most people seem to realize. The system is broken and it is all downhill from now on. Of course it will not go without a fight, but gravity will win in the end. Do not get caught in this game of greater fool.