Since the first moment of September’s trading, virtually every equity index and commodity has raced higher. If I knew nothing about anything I would say that a new Bull Market was being birthed. But maybe I know too much…
Anyhoo, the fundamental backdrop of the country,economy and markets remains the same as it was two months ago when the market was on the see-saw. Yet something has happened.
I love to hear the perma-bulls or perma-bears on TV. Most have not a clue as they are mired in indicators that went stale in 1999. Markets have changed a lot since straight-up technical analysis worked as the primary trading tool and mechanism. Take your “Edwards & Magee” and throw it away, because it needs a re-write.
Sentiment readings mean nothing because most every marginal investor is out of the stock market. Speculators have given up. Pimco has their money in safekeeping. The only folks left are the long-holders. the prop-traders and the algos. The long holders must have equity exposure as per their mandate. Even if the sun went Supernova, they would not sell. The prop traders will trade whichever way the wind blows and they will spin on a dime. They don’t give a shit about fundies or anything else for that matter. They are just trading against their customers (just my opinion!). And the algo’s trade off of Forex, period. So who’s left? The doom and gloomers.
They know how miserable everything really is, because they are “realistic”. They know the market is rigged and that prices are unsustainable. It’s all a sick joke and Zero Hedge has them digging their bomb shelters.
Listen, I’m sure we humans will kill ourselves one day. But that day is not today. Nor will it be tomorrow. The stock market has spent six months consolidating and driving out the marginal stock investor who has simply given up.
There are still October hedges out there that must “burn” like September’s. It is the end of the quarter. It is about to be earnings season. It is the historically best time of the year. The election is close. The yearly highs are in sight. The coast is clear.
You should be positioned for this as it has been all we’ve talked about for months. Now that you know, it’s time to begin thinking about how this ends. But we’ll save that for another day…
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