Think like a billionaire. Right now it's either 10 year bond or the S&P500. The 10 year treasury rate is a measly 0.63% and most billionaires are already heavy in bonds, and right now the market is over hedged (puts). That Economist article opened my eyes. Why wouldn't you just buy SPY and risk some capital when bonds are so low. Everyone is already a bear and think the market should go down, including me but the bond market is bigger than the stock market and billionaires are sort of forced to go and buy stocks along with unemployed people who are getting free money not working. Cash is trash, anything is better. Maybe this is the top since its converting bears like me lol but just follow the trend and it will work out.
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I'm still very bearish on this market, because its not running on fundamentals anymore, It hasn't even had a real pullback after these crazy rallies which lead me to believe that its running on FOMO and Greed with FED intervention. I do recognize that markets can remain irrational longer than you can remain solvent. So the only way this boat goes down is when we see the economic data in the next 2 quarters and even then the FED might still be in the equation. To me the "death cross" is the unemployment unless they really prep us for UBI I don't see that happening in this country without turmoil and inefficiencies that run even with current unemployment claims. This country barely wanted to solve homelessness when the good times were rolling, and now they barely want to give out stimulus to main street. Then there is the shifting markets with the pandemic still going and on top of the GDP contraction. This isn't like 1918 Spanish Flue when we barely had a giant economy if bulls want to make that comparison. Good Luck with that market bottom. Maybe the Stock Market will become like the Japanese one finally with fed intervention.
Ive been bear the whole time, Ive been losing most of the time because of not following the trend. Predicting the future that the market will go down. Im really frustrated about this rally. I just want to ride the boat because this FED intervention. I was watching the future market ES, at night it would just go up buy buy, something really wrong, FED pumping the market, so I will just go with the flow
BuckiTrader
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@seanarlan, Once all the retail bears are converted, they'll take 'er down. The masses are usually wrong...
supere
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Thank you for your post. However, consider what kind of dangerous proposition you are proposing? Leave all money in the safe haven of bonds into an asset class that is many folds riskier? Sounds like a disaster recipe for losing everything imho. What is so bad about cash?
carlos5577
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@supere, cash depreciates especially with talks of going to negative rates and the stimulus on top of proposed new stimulus money. Billionaires already have the capital to go and buy the market. It's not about going all in on SPY its about risk management and seeing the trend pointing upwards. Only thing that can make the market go lower is the VIX shooting up right now IMO. I'm starting to think we're going to get a "W" to ATH because of all the FOMO. Gold is too ancient and Crypto is still unusable to protect from hyperinflation. Only Options is Stocks and Bonds and in terms of returns stocks win right now.