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Good News, Bad News And A Bull That Just Won’t Die

Random musings and such.

Random musings and such.
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6 comments on “Good News, Bad News And A Bull That Just Won’t Die

  1. You have to put “bad news bulls” on the table speculating that the FED must be done, based on their own numbers (look at crude also). Then you have the fact that bear market rallies are very strong…..

  2. This market is crazy. Seems like folks (computers) were offsides on expiration, hedged into Friday and Monday and then got caught. Does anyone really think Powell is safe because Kevin said so? No one that has paid attention does. Did fundy guys chase today? Doubt it but with y/e never know. I think we try to make sense of the senseless too much, whether it is Trump or trading. Today is one of those days (like many this month) where one just says “ok, tomorrow is a new day and literally anything can happen”. The market looks more and more like it is uninvestable. A fed remark could cause it to rally hard or sell off hard (as things and people chase), a tweet, a “we’ll see”, a crazy comment, a policy out of left field, a firing, an impeachment, a return to normal order, a backing off a trade war, an escalation of a trade war and on and on. Anyone says they are confident in what is coming is either a liar or a fool. Excluding Trump who is both.

  3. Friday’s SPX futures/options settlement large gap was likely due to the fact that on Thursday futures surged 1% in the last 20 minutes of trading. Only 5m with stocks trading, a mismatch of 0.8% between futures and stocks was created.
    The settlement price of the index is not calculated using futures. A special opening quotation system is used. Instead of calculating the index from futures, the index is calculated using such special opening quotation for stocks.

    I had noticed analogies between this 2018 correction and the 1962 bear market (also tweeted).
    From a 50 pages report I had read in February after the sudden drop, concerning the 1962 bear market, I took note of this sentence: “Just as the break …was unusual and generally unexpected, the pace of the subsequent price recovery was equally unusual.”

    This correction started when bond yields went to 3.25%, and some labour data were released. Initially it was an inflation concern. After a few weeks, likely taking cue mainly from oil prices dropping (due to a whole range of factors were fundamentals were only a part, see Kashoggi/Iran), it turned into an almost recession narrative. The market overshot higher in summer ignoring Chinese data and rest of the world, but later it also overshot down. Lack of liquidity, technical trading (levels broken and trend following), gamma, noise trading mistakenly taken as fundamental info snowballed all together and created this absurd quarter.

    It could affect expectations, and turn into a real economy mess.
    Maybe to see that consumers spent and weren’t hindered by the stock market fall was a trigger, who knows.

    At 2600-50 spx may stabilize and range trade for a while. The right balance between expectations, China, macrodata, QT, and positive corporate earnings in a framework of slower growth.

  4. Lance Manly

    Richmond Fed collapsed

    All of the regional surveys have been slumping. There will be some serious gnashing of teeth if PMI goes south.

  5. Franceska–thank you for your comments and insight. Makes sense what you are saying. I hope we get to 2600 as it seems like that will be strong resistance.

  6. The market is grasping for air like a person drowning. There appears to be some gulps of air but the air is running tight. Absent a life saver, the last gulp of air is coming soon.

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