MTBigsky
Short

Something has got to Give

AMEX:SPY   SPDR S&P 500 ETF
145 4 0
Being a Bear has been an extremely tough gig in this market. This latest violent V-Shaped rally has fucked me up, eviscerating all of the gains I made in the October plunge. There has been an immense amount of Central Bank manipulation in the biggest Ponzi scheme in the world.
When the markets finally started to correct in October; a harmless, natural correction, Fed chairman Bullard was quick to hop in and jawbone them higher suggesting that more drugs ( QE             ) could be coming in the future. When the Federal Reserve finally announced that for sure they were done with the 'money printing' treasury purchasing aspect of QE             (although they were not going to raise interest rates for a long time) Markets ended a relatively volatile session flat to positive. Overnight before Sellers had a chance the BOJ announces a massive QE             program, dwarfing any other they have had in the past in an effort to produce economic growth using more of the same policy that has been so infective in generating wealth for anyone who wasn't the top 1%.
Finally momentum began to stall in the slow drift higher. All of a sudden Chinas Central Bank announces that they are cutting rates in order to spur more economic growth. Nobody sees this as an albatross that their economy is weak and so they feel they need to supercharge it. Instead investors only see more easy cheap money and one again gapped the market higher. The bulk majority of the moves in this rally have happened in gaps overnight.
It has gotten to the point where short sellers are dead in this market. Bullish Euphoria is at an all time high.
This rally is now historical remaining above the 5day MA for 29 days in a row! A phenomena not seen since 1927.
We are now extremely Overbought by the RSI . Something has got to give. I suspect we are in the midst of some sort of blow off top and the end result is not going to be pretty. If we do actually raise interest rates, the result will be a recession as all of the malinvestments spurred on by free money provided by the Fed gets washed out by the market.
I don't know when exactly this will happen as Central Banks have proven to have immense power in manipulating capital markets. But this Will happen at some point and I suspect it will happen in the near future.
http://www.bigskyinvestments.com/blog/something-has-got-to-give
Justiceisfalse
2 years ago
Raise rates?!?!? No way!!!!! How many mortgage defaults does that engender?
The night moves: I remember GC was doing the same (down side) for a long time on the last major leg down.
I agree, this will come to an end - maybe the commodity selloff and treasury melt up are finally saying something?
I am watching the IWM and VIX with impatience.
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MTBigsky Justiceisfalse
2 years ago
It's crazy, this game of musical chairs. Everyone loves a bubble until it bursts...
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Schopenhauer64
2 years ago
Agree with everything you're saying here. I'm short the SPY and long TVIX, but we're now locked in a range between 207.50 and 210. We'd really need some kind of big catalyst for a major correction, and I don't see one in the near future. But once it *does* happen, the party's over big time.
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thatguy
2 years ago
The market can remain irrational longer than you can remain solvent.
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