I’d be lying if I told you whats in store for next year, I don’t have a clue, but I’ll continue to make best efforts to continually try to think outside the box and try to see what the rest of the pack doesn’t see. Its nice to have a trading style that doesn’t depend too much on macro evens to make money. It enables us to bob and weave through the madness.
I wont make predictions, I’m not that smart. No one knows the future, but I do think a few things ‘could’ unwind in 2016.
I think China could finally start a melt down, if so, this could throw us into a 20% correction.
The weekly chart of the Shanghai could be the mother of all bearish head and shoulder patterns. Not only is it forming a right shoulder, but its also in a brutally bearish bear wedge (see circled area).
The Hang Seng is also working a big bad head and shoulder pattern on the weekly. Under this scenario, weeklies are better to view than dailies.
Oil prices will be so important
What if oil does indeed test the low 20’s? The guys that run OPEC and the Emirates are infinitely smarter than me and they have already stated that they are fine with oil going to 20. You believe them? I’m not sure, but so far they are holding their ground.
20-25 dollar oil would upend the U.S and the global economy, and bankruptcies in the oil patch would be rampant under this scenario. Global stock markets would have huge problems. See the quarterly chart below of crude and the little green arrow in the lower left. That 22 spot would be a retest of 2003 prices. Who ever thought it would go this low, so anything is possible.
I dont trust Europe.
Europe has avoided falling into the Mediterranean many times in the last five years. I still have issues with it. In my eyes they are still guilty until proven innocent. We’ll see. I’m rooting for them, but we’ll see.
It’s going to be a fun year and good or bad I’ll play it like I see it. I start every year thinking it will be 1987, 2000 and 2008. But that’s just the anarchist in me. 🙂
Emerging markets and Brazil look drekish
Been short emerging markets and Brazil for a while now, both are testing huge support areas so we’ll see where that goes over the next couple of months.
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