Buyback Wave Coming

Now that most earnings reports are out, the stock buyback surge is coming.  With the lack of retail involvement, the corporations are mostly sitting on their positions, so the driver are institutions buying back stock to drive up share prices.  This wave should start in earnest in May, but with earnings worries now in the rear view mirror, its once again "too bright gotta wear shares" market.  I will not fight it, not with the ease with which the S&P has shrugged off European weakness, and the kickoff from the nonfarm payrolls bottom only 3 weeks ago.  I need to give this move more time to develop, as I feel like marginal new highs will get the crowd bullish and that will be the setup to short.  Not now, right at all time highs.  Triple tops are rare, and this is the third time we are visiting this SPX 2120 area, and I expect it to bust through with ease in the coming weeks.

I am still not seeing enough equity excitement to make me comfortable shorting the S&P here, and the VIX is just too low, I would like to see the VIX rise with the market, as a sign that the end is coming soon.

I have noticed that the WTI-Brent spread is blowing out again, which is not a good sign for WTI as this is the time of year when the US should start playing catch up with refinery demand picking up.  I will look to play short on crude oil on rips again in the near future.  Brent crude will have a hard time staying above $65/barrel.