Friday, August 29, 2014

Immune to Ukraine

The first week of September should be bullish, as the fund managers return from Labor Day weekend and pile on risk ahead of the ECB and nonfarm payrolls report next week.  Ukraine situation is smoldering in the background, but it is something for the Europeans to worry about, the US will not be affected much.

Yesterday, we had a Ukraine scare and it dissipated within hours and those who sold in the hole regretted it a few hours later.  If you look at the charts, you can see the underlying strength of this market, oozing with buyers lurking on every dip, and bear catalysts hardly present.  Yellen ain't going to spoil this party unless every one is smashed out drunk and puking all over the dance floor.  Right now, the bulls have a good buzz going, and have yet to get out of control.  If we do get out of control, you will see it with the momo tech names, which have been very strong during the August pullback.  Stocks like TSLA, FB, TWTR, and even AAPL etc will start to go bonkers to the upside.  We are not there yet.

Bonds look overstretched here, but they move like a supertanker, they will only reverse direction when there is the all-clear and those waiting to buy bonds can't wait anymore and just hit the offer.  We are close to that point, if not there right now.  But shorting bonds is always tough, and you have to have very good timing to pull off a good short trade.

You either ride this US equity bubble or get out of the way.  I am not good at riding bubbles, so I am getting out of the way.

No comments: