Bears Giving Up…But May Will Be Red

Now that formal introductions are handled, it’s time to get to work.

The market is currently entering drift and shift mode. Following the relentless run-up in US equity markets, last night was a classic example of an event (headline risk/crude death) that rippled through indices abroad and was supposed to sink US markets, initiating a bearish bent, lifting volatility, and prompting selling. However, what seemingly should have happened (as packaged by the initial reaction) was replaced with a spurring of frustration on the side of bears, as bulls bid up indices above DJIA 18k. As bears increasingly throw up their hands amidst DJIA/S&P ATH nose clammers, the Passover holiday looms and volume dries up. I fully expect the DJIA/S&P to slowly drift higher this week into next, as volatility wanes and ‘coast is clear’ messages start to circulate among bulls. NFLX earnings bed shitting should prompt traders to shift into risk-off mode with the Nasdaq and Russell 2k being the first to lag and stall.

This week and next week should present a good opportunity to lighten up longs, find a burrito or 2 to make a late cycle run, and initiate shorts. The ark (TLT) looks set to have a great May. I strongly feel the month of May will be red, confirming the seasonal sell narrative. (The strategic preservation of dominant ideological market engagement constructs are instrumental in maintaining a classical narrative for market participants to put their faith in.) Beyond this, I am still awaiting more data points. I will soon share a 2016 outlook (for better or worse) that hypothesizes a scenario for the remainder of the year.