Tepper and Hedgies

I see that David Tepper came out yesterday morning and talked bearish.  I didn't know who this guy was until he made a famous call on CNBC in 2010 that stocks would rally because of the Fed and QE.  His bearishness just confirms that he is probably heavily in cash and waiting to deploy it.  I am not going to say he is like the rest of the hedge fund managers, but he is a good representative of what the average hedgie is thinking.  What I noticed was that he said he would get more constructive if he heard the right things from the Fed.

And guess what?  The odds favor the Fed being dovish next week.  Since their last press conference meeting in June, oil has dropped from $60 to $45.  The SPX has dropped from 2100 to 1950.  And there have been no blowout jobs numbers.  You think they are going to raise rates into that?  Really?  The crew that is painfully slow to tighten monetary conditions despite a raging bull market and a strong labor market is going to suddenly raise now because people expected September as a time to raise rates?  I don't see that as being likely.

So you have a mountain of hedge fund fast money ready to be deployed as soon as Yellen confirms that yes, she is a dove and will not rock the markets at a vulnerable time.  Thus, I am playing the long side into the FOMC meeting next week.