I am here to say that the central bankers are scared and won’t ever let the stock or bond markets go down again. I would like every hedge fund to cover their shorts and go long the highest beta, lowest quality piece of crap you can find. No more of this market neutral nonsense or hedging. The average hedge fund has not done well this year. You know you have underperformed the market this year and your clients are getting ready to fire you. Some of you are negative and the market is up 10%. Your clients can do that for free. The only way you can win and redeem yourselves is to get maximum long this market and gun it into year end.
You must Ignore all the divergences that have built up over the year. You must ignore the awful breadth and the narrowing of the market. Don’t pay any attention to the DeMark 13’s on all the indices. You must dismiss the volatility in the currencies and the strength of the dollar. Pay no attention to crashing oil prices, all time high margin debt, widening high yield spreads and off the charts bullish sentiment. You must redeem yourselves and you all need to get long. Please do it tomorrow. The Turkey/Santa rally begins tomorrow. Don’t get left behind.
Food for thought. What if we already had the Santa Rally? That is crazy talk. Please get long and lets get this party started.
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true dat seasonality thing … I know an excellent h/f manager, who’s been at this game for a loooong time, great track record, and while he dabbles on the short side at any time of year, far far less right here & now, because of seasonals , damn all those divergences you mention
and it’s served him well throughout the years …. will this time be different? stay tuned … although the p/c remains high despite the low VIX, so insurance is being bought on the cheap
I agree. The seasonality thing usually works. In 2000 and 2007 it did not. How crazy would it be if we rolled over and took out the October lows before year end.
that would be Kuh-razy, but unlikely .. and I’d use that sentiment as bearish ! 🙂 I don’t know how many times, just before holidays, holiday weekends, that the market just seems to magically go up, so we will all feel rich & we can spend spend and keep this house of cards, uh, I mean, this economy going.
e.g. I wonder what the market stats are going into Black Friday or leading up to X-mas week? I bet they would rank as among the most positive days of the year.
But if now a hedge fund gives up and goes long, doesn’t the market also increase its YTD gain and thus no way to beat the market? The best hope is mean reversion – the market revert its gains and the shorts revert their losses.
It would be crazier still to hit new highs. Everyone hates this V shaped reversal.
Interesting food for thought, BS:CI. Have you considered applying for the technical analyst opening here? It would occupy your time while you wait for the next hurricane or eruption.
we finish the year on new highs. Then the shovel to back of the head in Jan.
Blue, I assume this is sarcasm, or are you throwing in the contrarian towel?
fifty2weekhi,
It depends, if they do it before all their other peers they win.
Groton,
I think OA is more qualified than me.
thegametheorist,
What do you think?
You seem a bit salty.
Alternate energy might be a serious short
Gorby,
I concur.
Bullish,
I am rather salty today yes.
Blue owns a Sarcasiam mine me thinks
jimmy two times.
My sarcasm mine is hitting new lows like commodities.
Blue
thats why i stick with Unobtanium imagine the pricing power!!
jimmy,
LOL
At first I thought this was capitulation from one of the more staunch bears I know of. But then I realized you were just “joshing”
For what its worth, the “thesis” you laid out here is one of the main reasons I remain long and will continue to be so until the CB’s actually pull back. I think you’re going to be right….at some point….But just not yet.
Blue. The “market” is rigged. The game is in the sectors and individual companies. Which will fly and crash then fly and crash. Obviously you know this. There are no jobs for the kids coming. There is no plan to create them. Just a rigged system that must have money dispersed to the people one way or another. The “top” will only happen as a last resort before an epic cattle call to defend the homeland. Timing that is not impossible. But is it now?
Figured a good conspiracy theory could add to your thesis. In the end rigged is rigged. When “they” want it to fall it will.
Martin Armstrong says it is a “real” bull market when a market hits highs in all currencies.i I’d personally interpret that more as a parabolic move, mania, run away bull market or “enthusiasm move” or global concentration…
Nevertheless, by that definition we are close to a “real” bull market in US stocks. If we could see the US dollar strengthen against the Indian rupee while the Russel in dollar terms also takes out it’s highs then it’s on.
As far as rigging goes the market has
always mostly been rigged . Today it’s
gov’t ,before it was enron, then banks before them railways and oil barons.
A huge portion of what we do is try
to figure who is manipulating what and
then try and trade around that. For my
part I have an oversized belief in the growth of the U.S economy and am trading old man companies in the belief
they and I will benefit. The free money
will continue for a good long time -24
months- and markets ,manipulated
as they are will do ok.
not forever.
So I agree that central banks will not let the market go down. Also, bond yields are ~1-2% and since everybody is Bullish based on what I’ve been reading, I would say the downside occurs in earnest when the expected returns on multiple timeframes are negative and there are enough people to long squeeze. I think the only way people will be in a long squeeze is another credit crisis, perhaps spurred by over-indebted companies or a raise in rates. Obviously the rates won’t raise if there are signs of market weakness. Well just have to see how long the buybacks last.
The Fed will NOT raise interest rates again—ever! (I stopped short of saying never). Look at all the QE and ZIRP and still the $USD is strong and has busted through a trendline going backto 2006! I tell you the Fed is scared, scared I tell you!
Hi Blue . I can’t figure why you try so hard against central banks , as you said central banks ( and they’re sub-banks which all we know the main investing firms now are , just look at rates.. ) will not allow the market to collapse again . so why bother ?
we have full european QE awaiting .. then some chinese QE into protocol .. then things will turn around again .. then there’s the fed machines that slow down the vix when it gets disturbing .. so?
ForgetAlpha,
Keep coming. I use you as well. Thats why I can’t get long. There are way more of you than me. have you checked the sentiment readings?
Ironbird,
thanks
bushwaker,
They are petrified.
bood,
Thanks for your comments. The CB candy is having an increasingly smaller and shorter effect. The set up for a crash are resetting faster and faster. We have had four set ups this year. Prior to that we have none. We are reaching maximum debt.
Blue,
Sentiment readings are volatile. I don’t love this market here, but I just don’t see the crash coming like you seem to be positioning for. Will there be a correction in the next few months? Yeah sure. But I don’t see the major red flags that would make me position for a 08-09 type situation.