You ever try describing how to properly use credit to someone who has never worked a day in their life? The topic is hardly complicated—good debt vs bad debt. Regular payments improve your credit worthiness. Avoid extending credit for goods/services that will not produce income or some other form of security.
These are not abstract concepts to someone who has ever had to use credit to build a business, or a family. But when you’ve spent your entire life in a rent-seeking position, like as a politician, it can all sound like garbled nonsense.
Jay Powell has to make the ongoing business of the Federal Reserve something a special needs fourth grader can understand. Add a layer of skepticism because muh The Great Recession. Jay Powell holds the highest position in capitalism, therefore he is the most important person in the world.
He’s no Janet Yellen, I can say that definitively. That goddess could go into the Capitol and field questions for fifteen hours straight without ever actually answering any inquiry. She could spin a smooth tale as long as time, eating up the clock better than than Bill Belichick with a two point lead.
Jay Powell stammers, he panders, he concedes to the passionate tone talk politicians are trained to spew. At least that was his performance the last time congressmen hissed at him. Let’s hope he can maintain a cool and smooth presence both Tuesday and Wednesday, allowing the stock market to behave on its own accord.
Because the market is the market and it looks strong. There isn’t one systematic reason to bet against the auction right now. Ego and emotion might want to open your trading platform and bet against the market, or hedge, but according to the institutional-grade tools inside Exodus, there is zero justification for taking bearish bets.
So why take them?
Listen I have eyes. I see the areas we are coming into on several major indices. I saw Utilities and Materials lead the rally last week. I see the caution signs flashing yellow yellow. That’s fine. I’ll be less aggressive with my longs. But going short? Or hedging? Those would be flagrant fouls. Rule breaking. Errors.
No thank you.
Models are still bullish lads. Friday is a new month.
Behave accordingly and may the gods of high finance grant Jay Powell courage and patience during his walk through the snake pits of America.
ciao, kiss
Exodus members, the 223rd edition of Strategy Session is live, be sure to read Section III with hammers home a very important aspect of properly utilizing Exodus.
RAUL SANTOS, February 24th, 2019
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