Back in early February when Godzilla was roaming the streets of NYC, spitting napalm out of his gullet, I tweeted out that I missed greed. At that time, the CNN Fear & Greed indicator was flashing extreme fear and hovering in the single digits. Flash forward 5 months later, the streets have been cleaned up, the skyscrapers rebuilt and renovated, hipsters back on the streets searching for Pokemon; and the indicator is now sitting at extreme greed levels in the 90s. Gartman has been known to trade off of this indicator, hence why I like to keep an eye on it. With the indicator being in the 90s, it appears we may soon be headed for helicopter money territory.
With the VIX approaching 52 week lows and the biggest 3 week crush in history it only seems prudent to take profits here. At least that is what I’m sure your gut is telling you right now.
— Charlie Bilello, CMT (@MktOutperform) July 15, 2016
However, as we all know, the market can stay irrational for long periods of time. I think we have entered the melt-up phase once again. Earnings season will once again be filled with bullish musings which will then result in multiple expansions as a result of a stock beating some analyst’s estimates and whisper number while completely ignoring all fundamentals. So basically nothing out of the ordinary.
As always, you can safely hide in the Ramp as it is not affected by earnings, or Brexit, or greed. Well, technically, I guess it is affected by greed. Nevertheless, I expect some of you to take your profits, and put on your hedges. Just be prepared to lose money on those hedges.