Stubborn VIX and Fat Cats
Looks like we may have to consolidate in the 285-295 range over the next couple of weeks or so. My "feeling" is that VIX has to get down to low 30s for the leg down to start. We will look pretty overbought by next week. Trading should be in tight range over the next couple of weeks, appearing like consolidation.
Big Money is here to make money. They don't give a rat's backside if the market is up or down. Right now, they have an all-you-can-eat buffet from Fed who will backstop every bad loan. What advantage does Big Money have in selling/shorting this market? If you are part of the Fat Cat elite, you don't want to be the one to sell as other cats are likely gang up against you. At least you are not likely to short unless everyone gets in on the program. With the Fed as the backer of all debt, who dares sell?
Still, technicals and fundamentals mean something. We reached here with money "from" nothing but to stay here, we need fresh supply. How do you make Fed print more? How about a threat to sell?! We should see whipsaws over the next few weeks and months. With elections coming up, each of the contestant is likely to outdo the other in largess. The bear case is getting distant by the day.
Big Money is here to make money. They don't give a rat's backside if the market is up or down. Right now, they have an all-you-can-eat buffet from Fed who will backstop every bad loan. What advantage does Big Money have in selling/shorting this market? If you are part of the Fat Cat elite, you don't want to be the one to sell as other cats are likely gang up against you. At least you are not likely to short unless everyone gets in on the program. With the Fed as the backer of all debt, who dares sell?
Still, technicals and fundamentals mean something. We reached here with money "from" nothing but to stay here, we need fresh supply. How do you make Fed print more? How about a threat to sell?! We should see whipsaws over the next few weeks and months. With elections coming up, each of the contestant is likely to outdo the other in largess. The bear case is getting distant by the day.
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