The Fed prints money and China and the like stashes them in their central banks because they don't want our dollar to devalue which would cause them to lose global market share. That is why China is so mad about this. Because they are frustrated as hell that we are drowning them in dollars. This is how we win the devaluation wars. We print dollars until they capitulate.
When someone cheats in the currency markets, as China has, this is the corrective action that results naturally that will eventually force them to stop. Our dollar can only raise in value due to trade if we export more than we import. If we don't it has to decline in value unless other countries manipulate their currencies. How do we know that they are manipulating their currencies? Because it is mathematically impossible to have a trade imbalance with floating currencies. Currencies valuation will adjust until the imbalance is wiped out. So it is pretty obvious that they are. The question is how many dollars do they want to stash that they can never spend unless the rich people in China try to flee the Yuan forcing them to unwind. How much of a loss are they willing to take? When the loss is impossible for them to comprehend they will have to stop I would assume. Or they just keep giving us free value.
Then I suggest that you sit in cash and wait for the poop to hit the fan and then buy TVIX around then. Because we have no idea on what day the dam breaks, but the TVIX leaks like a sieve every day. Can't win.
Negative rates would be terrible if banks and brokerages start charging money to have your money in cash in the bank. 90% of my money is in cash.
The dollar going down is good. Why else would everyone else be manipulating their currency to make the value of their currencies lower than ours? You think they do this because it is bad for them? Then why would they do it? It is because a decline in the value of our dollar is good for the US. It makes the US more competitive abroad and makes it so we buy stuff made in the US rather than abroad because it is cheaper and that creates jobs at home. So I am perplexed why you would think that a declining dollar is bad unless you are Apple and are faced with the prospect of moving your factories back to the US. But until the US lowers their corporate taxes they might just move somewhere else. US politicians don't seem to have a grasp of how the global economy works. And it is quite amazing to me that the leaders in third world countries are able to out maneuver the US in trade and we turn a blind eye. Are we really that dumb?
It doesn't have a lot to do with the US economy and our markets. It is about the Chinese cell market being saturated. This happens a lot with tech companies. They boom when a market is immature when everyone is trying to get the next new thing and then when it saturates their new sales fall off a cliff as they are resigned to supplying replacement units.
When the cell providers come out with 5G there will be another major refresh cycle. Until then all they can do is add features to new phones but nothing revolutionary. Better cameras, longer lasting batteries, faster processors, etc. But people can wait on these things. 5g will add enough bandwidth to allow people to run new apps not possible today.
We are all expecting a recession like everyone else. We just don't think it will happen fast enough to make money on a stock that decays as rapidly as this one does. People who buy this stock have been predicting a recession for the last 2 years. I can tell you that I am already out of the market long because of the likelihood of a down turn doesn't justify the risk of being long. But this stock will go up and down many times before that day comes. This stock is so short term that any long term prediction like a likely recession is moot. It is irrelevant to what this stock will do between now and then.
Before August 2015, anyone who bought after the last peak would not be able to recoup their losses on the next peak. The decline between peaks was greater than the size of the following peak. So it was nearly impossible to be long an make a profit. At best the broke even. Only if you had a crystal ball and bought close to the next peak could you make money. But the guys who buy this don't have a crystal ball. So they rarely buy close to the next peak.
What they do is buy and lose money and then when the next peak comes they are still down so they keep holding hoping to recoup all their losses which is unlikely and they miss the peak because they waited too long. Now it is going back down and they imagine another peak will come shortly and they miss it altogether ride it all the way down. Eventually they stop investing in the stock out of frustration but only after screaming that CS is corrupt and that there needs to be a class action law suit. Of course all this happens to them after they were told 10 times over here that this is exactly what was going to happen. I have rarely seen a case where they listen to reason. Only losing money gets them to acknowledge that maybe we aren't paid shills after all.
I believe there is a psychological theory that could apply here but this is a field of study I know nothing about. But the fact that so many people do the same thing seems to imply it is related to human psyche in some way and is not uncommon among people who are less inclined to use logical arguments to come to valid conclusions. I find it amazing because I figured this stock out in one day of researching it. So obviously I cannot comprehend the mindset of someone who doesn't. It is impossible for me to relate because I so much different in this regard I cannot fathom it. So I will never understand why they do this, only that they do it.
MM's? This is a tracking stock. There are arbitrage traders who are allowed to create or retire shares so that the price of the TVIX does not deviate from the underlying. They don't cash out. They buy and retire shares if the price is too low, they create and sell shares if the price is too high. There is no cashing out. They never own shares. They sell them as soon as they create them and they retire them as soon as they buy them. They make their profit when they buy and sell the underlying and make profits on the price discrepancy that they are correcting.
I think you have this confused with a company stock.
it can be assumed that the arbitrage traders don't control the price of this stock in after market. Everyone who bought expensive shares in after market lost money when the arbitrage traders created and sold new shares to drive the price back down to be in line with the underlying. In hind sight, it would have been a great opportunity to short knowing that price changes in after market are not real.
If you are only looking at one or the other to comprehend the current state of affairs then you are only playing with half a deck. Look at the evidence and then decide. Don't decide and then look for the evidence that supports it. In my opinion there is no clear direction yet and I don't think anyone should be trying to say that there is. Investors don't react in large enough numbers to make a difference until the economic evidence is beyond dispute. They need much more convincing evidence than the people who assume a hurricane based on a mild breeze. There will be layoffs by most companies.
agent_foot_in_the_mouth, I mean shoe, you should stop trying to predict what you cannot know. You are just as likely to find water with a forked twig and look just as ridiculous trying to do it.
The fact is that if you knew what appl was going to report then the FCC would be investigating them for leaks. If you don't know then why pretend that you do. It only makes you look low IQ.
But apple is expected to report its first ever iPhone sales decline. So if the price goes up it will because they didn't decline as bad as everyone expected. Is that what you are hoping for?
When you buy TVIX shares you are buying futures options by proxy. That is why it loses value so fast. Because the time value of an option is always declining. I have observed that many TVIX longs are not aware that their TVIX shares will decline in value if the VIX index stays constant in value. Most don't understand what they have bought. They even think that you can predict the stock price with technicals. It is crazy.