iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
20,954 Blog Posts

We Should Be Getting Hammered Today

But we’re not.

Crude is off almost 5%. European stocks are off by 1%+. Gold and bonds are higher, yet the NASDAQ is up.

Why?

Tech stocks are being accumulated. Stocks like GRPN, YELP, YHOO and even ETSY are higher. While commodity related names get poleaxed into oblivion, WDAY, PANW, QUNR and DATA are up.

Inside Exodus, my bubble basket is higher by 0.5%, while the commodity basket is off by 2.7%.

Thanks to AMAT, semis are up too.

In my opinion, this is indicative of institutional accumulation in undervalued, or beaten down, tech names, whose growth prospects are now attractive relative to their valuations. The rallies are too broad based for it to be a coincidence.

As an investor, you’re running out of spots to place your money. If you’re not interested in gold or bonds, what can you buy? Do you want to chase CLX and MO after the runs they’ve been on? They’re not cheap. You’re not buying commodities. The cycle is over.

The only place that makes sense, if you’re a bull, is tech. For the most part, balance sheets are clean. They’re making a lot of money and valuations have shrunk.

Whether or not this thesis ends up being correct remains to be seen. As of right now, looking at the screen in front of me, this is the bet that is being placed by money managers.

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13 comments

  1. probucks

    Threshold for pain seemed to have move about a week ago to $29/barrel

    Crude futures also roll soon.

    The April’s r still above $31

    so sub 29 for March contracts and/or sub 31ish for April would prolly tank market

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  2. frog2

    or oil is rolling over first b4 the market

    right now is the perfect low risk spot to put on heavy shorts with a stop at the SPX Feb highs

    oil getting rejected at the 30day

    I thought we would rally more than this so the pause here might just be trap to kill bears, but you can’t ask for a more clear stop

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  3. frog

    I still think earl is making a bottom here. But even so, it’s not going back up to previous highs any time soon. And it, and JWN, and numerous other factors in the markets and the economy are showing no signs of this inflation that the Fed sees.

    It’s certainly possible that inflation may be coming. But the evidence for it sure is not there yet. The Fed’s inflation expectations are beginning to sound like the weapons of mass destruction in Iraq– a delusion that people need to be cured of– not a fact that ought to be acted upon.

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    • zerosum

      I think the Fed has a desire to restock its arsenal against the possibility of another major banking crisis, but they got the timing 100% wrong. T

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  4. infinitezuul

    Today is an extremely boring day.

    I think that’s a pretty big positive.

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  5. blahblahblah

    it takes time to create fresh negative drama

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  6. tradingnymph

    Market is acting just the way I am expecting it to. Equities SMELL the possibility of Central Bank COCAINE. They are NOT going to sell off hard until we go thru the G20 (In hopes of a MASTER PLAN of COCAINE, which IMHO they won’t come up with cuz it’s a Photo Op) AND THE ECB and BoJ MEETINGS at the start of MARCH. BULLS WANT COKE and Draghi, China and Japan totally TEASED the Bulls with it starting last Friday. For the mean time ROFL, a bit of Trivia…did you know that the G20 meeting next week will be at the Shanghai Hyatt and is sponsored by a number of leading institutions, including ICBC, Bank of China, China Life, HSBC, Bank Mandiri, China Great Wall Asset Management, China Huarong Asset Management, Dubai International Financial Centre (DIFC) Authority, Pramerica, SWIFT, and Visa.

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  7. anjing bau

    TCK is close to confirming a bottom on a monthly and quarterly basis……there is a new dawn approaching for the commodes…. TCK seems to be about a quarter ahead of the rest of the pack

    Nymph trade both sides of the market then you won’t sound so shrill… traders take what the market offers not what their bias tells them should be.

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    • tradingnymph

      @anjing, I will after my Bubble Study of 2009 is finished. I promised myself I will stay focused on it until we finally wash out around SPX 577ish. Which it will, cuz Bubbles always Pop.The Global Govts/Central Banks have created such a Major Ugly Bubble based on the over production of Commodities and the use of those commodities to finance so many risky loans and investments. Central Banks Will Give Up at some point. Bubbles don’t last forever. ROFL ok I do sound Shrill.

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      • anjing bau

        577ish. … the first time I saw you post up that number I thought it was a typo…..but I guess that is what your target is….have you come to a conclusion about the time it will take to get to your tgt?

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      • tradingnymph

        Around June/Oct 2017ish….all depends what BoJ and ECB does, QQE delays the calculation of a date.

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  8. anjing bau

    Why?

    Tech stocks are being accumulated.

    Possible answer/ Large cap tech Giants with balance sheets full of cash trading at lower multiples than recently will attract capital. Value investors will look at these names as a defensive component of a balanced portfolio…..

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