As I have noted in the past year the bid and offer is solely in control of upstairs traders. Yes truly upstairs traders not the institutional sales traders. Although, institutional sales traders do like to believe they are in control. Yes the Fed Banks and their unlimited cash printing abilities are in power. They got their pals in the media to create a big enough short sentiment leading up to the elections and the short squeeze has pushed the equity markets to new highs. As always a good trader just sits and waits for blood and then pounces like a wolf when the so called smart people are wrong. Special thanks to CNBC for their market commentary leading up to the Presidential election and getting a lot of amateurs short.
So does this mean the Dow and the S&P are going to fall off a cliff. Probably not. It would not surprise me to see equities continue on upward for a little while till reality sets in. The long awaited spec bid is here and I will sit back and let it ride it’s course and then wait for my friends in the media to promote unstoppable momentum in equities as that usually signals that the top is almost put in place.
The action has really been in the bonds and the dollar since President Elect Trump started touting his idea to make other countries pay for US protection. Looks like there was a lot a of selling in the US treasuries market and a lot of buying in US dollars. The 30 year Treasury is severely oversold and due for a bounce. If the commentators on the news channels start screaming about bonds going to zero then it will be time to look at the technicals for a bear trap just as we should be looking for a bull trap in the equities markets.
Anyway I hope the long only community enjoys the holiday Spec bid while it lasts.