I don’t have much to say. I am alone. All my brethren have been killed. Everyone I know who was a bear has flipped on me. I am not talking a couple people and their PA. I am talking friends here and in London who command billions of equity and hedge fund assets. Now they were not short per say but they were cautious. No More! TINA rules the day. To a man and woman they have given up fighting the central banks. Mind you they have not been fighting them the whole time but over the course of the last 6-12 months. The high priest central bankers have converted everyone. Apparently revenue and EPS misses are ok now because it means more stimulus which of course means higher equity prices. No one cares about the deteriorating fundamentals like the fact that semi-conductor companies are missing big on the top line. They are usually early warning indicators of economic weakness across the board. It just doesn’t matter. The central banks are no longer subject to the cyclical laws of nature.
However, what if the death of the bears was a problem for the central bankers? The marginal buyer of equities has been companies purchasing their own stock, Europeans chasing dollar asset momentum and stubborn bears covering their shorts. Last week I wrote about multi-asset class turning points. It appears to me that the U.S Dollar has peaked and is heading lower, bonds yields look like they want to rise and gold is showing signs of life. We also have potential for a bullish reversal for the Yen and the Euro. So essentially the last of the bears went long and there are no shorts below us to cover when selling begins, the europeans are up to their eyeballs in the US Equity Strong Dollar Trade and look to become net sellers as the dollar weakens. In addition, bond yields look set to rise which could slow down the debt fueled corporate stock buyback binge. Buying power may be drying up for the time being. The market today felt exhausted. Friday’s minor new high had only 18 new 52 week highs on the S&P. A very poor reading of strength. In addition, all sorts of exotic technical voodoo triggered last week which suggests at least a reversal. We are close gentleman. Bull markets end when there are no more bears. Well the bears are dead and now the bulls are next.
If you enjoy the content at iBankCoin, please follow us on Twitter
even though we are hitting new highs the mood in the office does not reflect that.
There seems to be so much cash on
the side lines waiting for the fucking dip
that never comes.So were left
trading bulshit names that were
orphaned long ago in hopes
someone other than oneself
notices them and pays
to take them .
agree with jimmy. sentiment isn’t positive, as weird as that is to say. also, most non-wall streeters i know are only now just dipping their toes back in…
dj – precisely, and worrying. “Sold to you, sucka”
gruesome picture .. a teddy bear with a ketchup stain is no longer sufficient ?
Bluestar has posted, the weekly bottom is in 🙂
Queequeg’s post raises a question on measuring investor sentiment – is there a way to tell how much retail buying has been involved with AAPL’s run-up from their last earnings to this one? If people are driving this latest push in the largest of companies because they recognize the names, then that would be concerning….I am sure someone has a metric that measures this?
Thanks BlueStar. Appreciate your commentary. I don’t know a single person who believes what I do about todays situation.
I stopped in a coin shop today, the guy told me business was brisk today – a little crazy in his words. He said there was an article positive for pm’s. Who knows what the real reason was, but he had a bunch of buyers in there today.
forget your mood. how are you positioned? also the former bears are still kind of bears but no longer positioned that way.
The best measure I use is good old plain volume. If volume is thin (as compared to monthly averages) and price creeps higher, it’s at least a sign institutions are probably not buying. And even if it’s them, it shows that their confidence is not as high. I could be wrong, but that’s how I interrupt volume.
“There are no shorts below us
when the selling begins”
I love that comment cause it so true.
The central banks want to be the buyers of last resort today.Can’t fight the
Fed untill they are broke.
Blue right now about 50% fixed income across the curve from short to long term 50% in the mkt with a good weight in Japan. down about 30 bps mtd. I follow a prop qaunt model focused on absolute returns. I’ll let you know how a I am positioned after month end when I re-run the model
I should add that model shows mkt is REALLY stretched and has been for some time. But as we all know it can get even more stretched.
It is very clear that the markets are the last policy tool that governments have, and they will do what they can to keep this elevated. Maybe so far as to going back to making trades under the persimmon tree once a week!
I do believe you called lower dollar and rise in oil about two weeks ago. Hope you played your call.
yes. not enough.
going back to making trades under the persimmon tree once a week!
Do you think they ever stopped?
Agree with Dan, now that Blue has called the top again we can likely resume the trek higher.
@k_melancon ChartMill has an indicator that they claim breaks down the volume created by large and small investors.
Here’s a link to the ChartMill page that explains the effective volume indicator.
Ok.So lets see if we can call today.
The jobless are an vanishing species
apparently.Thats good right.That means
rates are going up so I call the market
Friday blues I say .You wanna hold
shit over veeken no.Not I.
Faber 2 mins
Bitched slapped and spit fucked by Mr Market again. You are a loser you will always be a loser, so kill yourself. Now, go get your fuckin shine Box! Oh yeah, throw yourself into that non erupting Haleakala.
Cid, you are a real tool! go back to your double wide, crack a Pabst and tune into some NASCAR. You can only dream of living in Hawaii.
Seriously, this site goes to the shits some time and really hammers the good being done here by all bloggers.
Agree. Comments like that are offensive and destructive. verbal thuggery.
Thank you very much for your astute investing commentary.
a classic post: http://www.sovereignman.com/trends/wise-words-about-amateur-central-bankers-courtesy-of-the-economist-16896/?inf_contact_key=1a3537c3b543c36e1e72dd7425e9e8900aeab2e8b8bbaad36e34d48fe7479db6
lol. You are not only wrong and a contra indicator. You are forever banned from IBankCoin.
Missing out on some nice up moves in individual stocks has been tough lately, but thankfully I caught enough of a down move in the $IWM to make a little scratch and cover some prior losses. The R/R for longs is pretty fucked up here if you ask me. There are a few stocks I still like, but generally, yeah, this market is pretty pumped up from central bank cocaine. It’s like risking 5 to make 1 if you’re a buy and holder of stocks, IMO.
What the fuck is going on round here?
Cid sounds like he has a small cock and lives with his mum.
Can’t wait to read the next post. You worked this move down like a pro. Great call out and analysis.