The markets are under pressure and the successive record highs observed on the American stock markets and those elsewhere may be curbed. Unfavorable conditions are multiplying: employment is falling, rentals are losing altitude, debt is climbing, etc. Nothing seems to support this out-of-sync market pace in the face of the prevailing global situation. It is therefore necessary to remain objective and on one’s “self” as a trader, in relation to stock market movements that are the result of hyper-dynamic sectors (technos for example) and of a clever banking/political manipulation (quantitative easing). Be rational. Envisioning, in terms of potential scenario, a large-scale economic tsunami will not make you lose your hair nor will it deflate your inflatable doll. By knowing how to identify the sectors of activity that are likely to maintain their progress in the midst of a possible storm that is becoming increasingly unavoidable, for specific reasons, you will be doing yourself a favor financially; but more importantly, by knowing how to foresee this looming crisis, by targeting certain sectors and securities, whose decline will be activated, you will maintain your performance while the entire market will fall down the stairs. The current cycle, already quite long and profitable, will end. This is what we at Orbital Trading believe. Now it’s up to you to think about it. We could go on and on about economic cycles and their duration, as reasons for crises, but… more on this later.
Let’s contextualize a bit.
In the United States, as elsewhere in the Western world, we are witnessing setbacks across the board in various key sectors. The institutions themselves are struggling to maintain their credibility. Citizen confidence is at an all-time low! In the social sphere, which is tending towards increasingly sharp oppositions and between the fashionable ideologies, nothing is going well anymore… This is worrying! The marked decline in freedom and the right to speak also hurts. The press is struggling.
Deregulation and social disparity.
Neoliberal deregulation and the concentration of wealth in favour of the rich have already undermined much of the power of workers. It has amplified their sense of dissatisfaction and suspicion of government and the powerful. In the U.S., since Reagan, the wage-earner-to-boss (CEO) differential was 1:29 under Reagan (1981-1989), while today it is 1:300. Is this due to the rising price of Big Macs in rich neighborhoods?
Who does what and why?
Every administration since that time has done nothing but dismantle the rules. This deregulation, under pressure from the corporations, has resulted in a marked impoverishment of the middle classes (see data from the PEW CENTER). They no longer have the means to pay and even less to challenge. The social balance thus broken, the citizen is now only a useful cog in the mechanics of power. His freedom is based more on a maintained utopia than on a real capacity for action. We work to pay our debts and we have debts because we can’t… The American dream is a lure. And it is like that in all Western countries, although Europe is infinitely more socializing than we are. It is in this context that tempers are flaring and conflict is gaining ground: 56% of Americans, of all stripes, currently believe that the last election was rigged. State cynicism has made cynics on the street. This can be explained if we break down the facts…
Democracy in motion.
One can ask oneself, as some do, if democracy is a sham. The principles on which this ideal should be built day by day, are deteriorating, to the point of making its very functions obsolete. Where is the freedom? What can we really change? Besides our intentions, our demands are relegated to oblivion when they reach the leaders. The government does not respond to the demands of the citizens any more than it responds to the demands of the citizens, it simply follows its initial game plan (established before the elections with its backers) to satisfy those who really govern behind the curtains of finance. This is not a figure of speech. If it is done to divide us, it is better to rule… But ultimately, it can get out of hand and out of control. It is. That’s where we are now.
Who is telling the truth?
Yes, the truth is being abused. Consequently, new ideals find their way to those who have already lost everything (or almost). Those who have been lied to and humiliated, now have their revenge; the internet has given them the means. Their word now echoes all the way to the Capitol, shakes the Elisha, shakes up both conventions and conventions, for better or for worse. Today, these are the means of action that the poor use. The monster is out of the cage and wants to eat meat.
The destructive potential of a lack of social equity, justice and balance in terms of wealth distribution, under the benevolent leadership of our governments sold out to high finance, is likely to give much ammunition to the flayers for years to come. Geopolitical tensions are also worrying, and are likely to make things worse globally. We are experiencing this moral decline head on. Our little cowardice, our banal compromises, our superficiality have imprisoned us by limiting our perspectives. So we have the leaders we deserve. If our leaders are guilty, let us remember that their faults are also ours. Everything is never black or white.
The world of tomorrow.
The alliances of the past, we have seen under Trump, have broken down. The sad spectacle has driven partners apart. Yet we will have to redefine the perimeters of new collaborations, otherwise the worst will follow at the ankles of disaster. We have only this choice if we think rationally about our collective future.
For the traders who follow us, there are several avenues in this torpid and distorted context; and several technical puzzles to solve if you want to profit from the volatility of the markets. By the way, it is possible to trade according to your values…Price movement and variations follow a discontinuous rhythm that is difficult to circumscribe on a day-to-day basis. The fundamentals including ̈ intrinsic value ̈ to the market price must be incorporated into your reading of things. It is imperative. Try to narrow down the popular sentiment when making your decision. If you don’t know how to do this, a training course at Orbital Trading could save you time and money. Experience is shared!
During your technical analysis, following your fundamental retrospective (which must be done, we repeat), act within a framework that allows you to integrate the short term dimension with medium and long term dimensions. Know how to synthesize contradictions while remaining flexible. Move forward in your approach not with hollow certainties, but rather with possible scenarios based on your observations. Use patterns as much as statistics. That’s it for our little overview. As I write this, Trump has just conceded defeat inelegantly. That said, the Republican group will come together like never before after this drift, while the Democratic team will remain fragmented. Biden is partially senile and his team is not likely to strip the walls. We are left with representatives who contributed to the Trump phenomenon. The more social Democratic wing is simply demonized. That is the paradox! Nothing encouraging for the future. As for the next economic, financial and social crisis, let’s just say that it will likely demolish our markers and take you right out of your shoes. So play it safe! If you have any comments, don’t hesitate to contact us.