Hi Esqy, I'm a bit maybe maybe on the US spending, the Republicans have a very slender majority in Congress and many of them want Biden to tighten the spending reins, the US is on track for a $2trillion deficit already this year.
Biden has been spending money like a drunken sailor, and the Bond (Gov't debt) markets are still in dis-array, and the Central Banks have no ammo - the only thing they can do is raise rates to try and dampen inflation.
What most pundits don't get is the fact that it is all about fiscal policy, which is all about what our elected politicians spend, our politicians on all sides have been going deeper and deeper into debt for decades, with rising interest rates (this global inflation spiral - which we haven't seen the likes of since Paul Volcker moved rates way higher than where they are now) this debt pile which is denominated largely in US dollars, and being mostly long term Gov't Bonds, is getting more and more expensive to merely pay the interest on.
But my immediate concern is what the hell is Iran going to do, won't go there.
On BRN I have a chart for this year, on which I have drawn some boxes, said boxes encapsulate a series of trading ranges that have covered a big chunk of price action this year. If you look at the chart you can see that between each box there is usually a sharp drop in SP.
Further the boxes have a denoted duration of trading days, the current box is now 26 days old so it is getting quite mature, there is only 1 box which has had a longer life and that is box E @37 trading days. I have a view which is probably like most others here, and that is; that BRN is trading way, way below fair market value.
We know many tech stocks on the Nasdaq are valued on the progress they have made developing their tech and what potential that tech has to impact the market and then subsequent market penetration. I take a different view to a number of contributors here in that I believe most price movement on modern bourses is initiated by algorithmic trading bots, there are statistics which support my view.
Large institutions run the bots (this is a capital intensive undertaking - very deep pockets needed), these same institutions use quantitative analysts to program the bots, they can modify the algorithms to go up or down over specified time frames very rapidly, or at a slower rate, and much more. With regard to shorting, this of course plays a part in SP movement, but to short you need to buy options, options are sold in contracts you need to buy a minimum of a hundred or thousands of the underlying stock for 1 contract, depending on the value of the stock.
If you observe daily price movements, most action is initiated by bots utilizing small parcels; shorts (and longs - because they are trading the market too) follow SP action initiated by the bots (IMO). Bots don't just field buys or sells in minute quantities, I am quite suspicious of many orders that have a value of less than $1,000- depending on the stock.
So my thinking is that institutions who run their bots have traded BRN down to literal gutter prices, it's interesting that the 4C did not precipitate a drop the other day. In the meantime many Nasdaq small cap techs have been handed a severe beating this year it isn't just BRN.
I'll stop raving (however this has been a very brief overview on bots) and go back to the chart that I was speaking to above, as I was saying box F is now getting a bit long in the tooth, so I am expecting a break up or down over the next week or so if the timing I have set out follows what has been happening so far this year. I couldn't say which way it was going, but I do know which way I want it go.
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