Wednesday, December 3, 2014

First Dip Always Bought

Monday was the first closing dip we had since October 22.  What I mean is that we've had a couple of intraday dips, but they ended up coming up by the close.  Well guess what, the first dip was voraciously bought, as we went straight up off the opening bell yesterday.  I don't see any catalysts to take this market lower, lower oil prices is not going to do it.  The anticipation of ECB QE will keep a bid under the European indices.  If you keep Europe under control, then really there is no boogie man out there except China, and they are on the monetary easing path with that surprise interest rate cut.  And more to come for sure.  So no negative global catalysts.  None.

So all the monetary spigots are open, and the Fed will not do anything to disrupt the party until we get a full blown bubble.  We have a long ways to go to get that full blown bubble.

You need to see interest rates going higher in order to even get a small hint that the rally is in the late innings.  Rates are not going higher yet.  So rally still has much more to go.  Same old, same old.  Game plan is to look to short crude oil between $69 and $70, and buy any 1% dips in S&P.    On bonds, just play the 10 yr range, from 2.20% to 2.40% for the rest of the year.  In the middle right now, so wait for 2.38-2.40 area to get long bonds, or wait for 2.20 to get short bonds.


Anonymous said...

What happened to the crude oil show?

Is oil still going lower dawg?

Market Owl said...

Yes, oil will keep going lower. No bottom here. Maybe when we get to $60, I'll be interested in bottom picking.

Anonymous said...

Where's the floor on the Yen?

Where's the ceiling on the SPX?

Market Owl said...

Yen floor around USDJPY of 124, which is the high in 2007 before it went down to 76.

I have no ceiling for the SPX. No ceiling. Short SPX if you want to lose money.

Anonymous said...

Sounds like the USD/JPY short very soon maybe a fat trade

Market Owl said...

2015 will be the time to go countertrend these monster moves in USD/JPY and SPX. Maybe we get some yen buying for year end due to Yen repatriation.