Dip Buyers Win Again

You would think that such a simple strategy, buying a pullback in the SPX, could not possibly have such a high risk/reward and an amazing win rate.  The market has done it again.  Another V bottom, frustrating bears looking for a more substantial pullback, and too much too fast fund managers who can't fathom buying up here, after such a strong rally and already up 450 points, which is12% on the year with more than 7 months remaining.  

The bubble keeps getting bigger.  And it is a resilient bubble.  Very calm uptrend, the dips are brief and not even that scary, if you look at the daily chart.  Of course, if you are a minute to minute daytrader trading with $500 margins on ES, the volatility will blow you up easily.  But for a position trader with proper risk sizing, the volatility is rather tame, especially relative to a VIX that has been trading between 20 to 30 for most of the year.

I saw a chart on Twitter yesterday showing the current inflows into equity funds.  The pace would put it at the most since 2000.  And although earlier this year, a lot of that demand was met with new supply, recently, there haven't been so many IPOs/SPACs, and stock buyback announcements are already back towards the previous huge amounts.  So supply/demand from money flows have been providing upward pressure for the stock indices.  

Bitcoin has bounced back strongly again off the dip towards the $30K level, and risk appetite comes back quickly in this environment.  Investors will occasionally get scared, but they don't stay scared for long.  Thus the V bottom patterns. 

My forecast for more choppiness, and another move towards 4060 this week has been completely wrong.  I have no edge here, with the SPX back above 4200.  Too early to short, and too late to buy.