Weekly Pattern in AMC

 AMC is the centerpiece of the meme stock trade.  It trades the most dollar volume among the meme stocks, and often times the most options volume of all the stocks in the US.  It is retail driven, and there are distinct patterns that one can discern from retail traders.  

Retail traders are simple creatures.  You can see patterns in their behavior which repeat over and over again, more often than you would see in the general market.  These patterns are more reliable than ones that you see in a major market like the SPX.  

I will reveal probably the most profitable pattern that can be taken advantage of with size (AMC is a very liquid stock and option).  Its based on a behavioral patterns of retail traders.  

Here are the 3 basic reasons driving the AMC price action:  

1) Retail options traders mostly trade calls, and in particular, mostly calls with less than 1 week till expiration (weekly calls).  Almost exclusively long calls, rarely short them.  

2) Retail traders mostly buy weekly calls during the week that they expire.  They don't like to buy options right before the weekend.  The buying is heaviest on Monday, Tuesday, and Wednesday. 

3) They have limited capital, so they don't have the ability to take delivery of AMC stock if they're call options expire in the money, so they have to SELL the option before Friday expiration if its in the money. 

The reason they behave like this is simply that weekly options have the most gamma, and are the cheapest, and most volatile since they only have a few days till expiration.  This satisfies the gambling instinct of these options punters.  They know that options prices decay with time so they don't like to buy them on Friday ahead of the long weekend.  Also, they like to be in cash heading into the weekend.  These punters' way to manage risk is to be flat over the weekend.  That's their risk management strategy.   They almost exclusively bet on AMC going up, because that's what their group (Wall St. Bets) encourages.  They are herd animals.  More like wildebeests than apes.  

Let's look at a simple pattern driven by the options activity:  

As you can see, AMC has a tendency to rally on Mondays and Tuesdays, forming a short term top on Tues/Wed, driven by their herding behavior of buying calls heavily on those days.  It then weakens on Thursday and Friday as the calls are either sold or lose their delta as they get closer to being worthless as expiration nears as they are out of the money.  This force of call selling and delta going down drives dealer flows to sell their hedges, driving the stock lower into Friday, where it bottoms, to repeat the cycle again.  

If AMC doesn't rally on Monday and Tuesday, it means that AMC is in the middle of a strong downtrend (late June to mid July, late July to mid August) that overwhelms any call options activity, also it discourages retail betting on calls during these downtrends.

As expected, Powell was dovish as all get out at Jackson Hole, basically making it sound like it would be all but impossible to hike rates in the future, while also delaying taper anxiety by not even mentioning any specifics.  The SPX is running away from us, speculation is through the roof, it was the meme stocks last week, this week its an assortment of daytrader favorite shitcos with high short interest like SPRT and BBIG squeezing higher.  

Expecting a different tone in September, but I'm not betting on it.  SPX 4400 is now bedrock support and will be tough to crack much below that level.  SPX 4300 is now a pipe dream for dip buyers. 

Speculation is Coming Back

 Tuesday and Wednesday options activity reveals what is apparent from looking at Twitter, which is that the reopening bulls are back, and they brought along the meme stock bettors who have been piling into AMC options like last May/June.  

AMC traded more options than any other stock yesterday, easily more than AAPL, and with 3-1 call to put ratio.  The meme stocks have driven down the put/call ratios for the overall market to June levels.  From looking at my watch list, most of the speculative retail plays are rallying strongly over the past week.  

I am still hearing a lot of analysts calling for a pullback because its gone up too far, but less than back in June and July.   A couple of days ago on CNBC Fast Money, permabear Guy Adami basically threw in the towel, saying that the dip last week leading to new all time highs means market is probably going higher.  

I have been too bearish on the market, I expected the highs from earlier in the month right before last week's dip to be resistance but the market keeps making new all time highs.  At this point, I have little conviction on any market calls looking for a pullback, but a lot of conviction when it comes to buying those dips that don't last for long.  I have a feeling that things will change in September, with weak seasonality and each FOMC meeting a potential negative catalyst with taper announcement fears.  

But this market doesn't want to stay down, so you can't hesitate when those occasional selloffs come.  You have to rush in like a conditioned animal ready to buy the SPX on any 2-3% dips.  No questions asked.  You will not get a 5%+ dip unless there is a black swan.  And it doesn't pay to look for black swans.  

Boring bull market continues.  Not expecting anything meaningful out of Jackson Hole.  Powell is almost at the reappointment finish line, he will not be looking to rock the boat before Biden's decision.  Expect either status quo mumbo jumbo or a dovish lean. 

Caveman Discretionary Trading

In the beginning, it is about finding an edge, a setup that works over the long run, through multiple market cycles.  Backtesting that setup and also making sense of why there is that edge.  It is not some random thing that worked in the past that you just expect to keep working in the future.  There is an underlying bias or behavior among market participants that create the pattern. 

For example, a lot of retail traders are looking for a quick buck, a volatile small cap stock that is in play and going up on some hype press release from the company.  They see it going up and can't help themselves, they get FOMO and chase a stock that's already up a lot on nothing fundamental.  So they push the stock up to unsustainable levels.  Eventually it goes back down as they sell when the excitement fade away.  Some of these companies will take advantage of the higher price and volume generated by these traders and ram through a stock offering.  Even without an offering, the natural force is to the downside once the high volume frenzy calms down, usually within 2 days.  The classic pump and dump pattern.  

Finding an edge takes time and experience, but its only the first part of game.  The next part is discipline.  Discipline is mainly 2 things:  1) risk management.  2) trade selection.  Once you find your edge, keeping that edge is easier than keeping your discipline.  

For a lot of people, discipline is a function of results.  It is easier to maintain discipline when you are making money than when you are losing money.  There are a lot of trading cliches that are useless but the one about trading smaller after a big loss is useful, but psychologically difficult to implement.  That's due to our caveman roots.

After you have been winning, you feel good, and don't want to risk losing that good feeling by trading bigger, even though you can, with the same level of risk, because you now have more capital.  After you have been losing, you feel bad, and don't want to keep feeling bad.  So how do people cope with that feeling?  They trade bigger, even though they have less capital now, increasing the level of risk after losing.  That's revenge trading.  Taking less risk while winning, and taking more risk while losing. 

Revenge trading is what happens after you lose money on a trade and also lose your discipline.  It has been the bane of my existence.  If I never revenge traded in my career, I would have a lot more money right now.  And I don't think I'm the only one.  Its the caveman in us that is hard to contain.  The urge to double down.  This urge is especially strong in mean reversion traders.  That is the biggest edge that trend followers have over counter trend traders.  Trend followers have better risk management.  

The next aspect of discipline is trade selection.  Its much easier to maintain the same trade selection when you are winning than when you are losing.  When you are winning, you feel good, so you don't want to lose that feeling by making too many trades.  When you are losing, you feel bad, so you want to quickly get rid of that feeling, and become desperate to find the next trade to make back your losses, to get back to even.  So most end up loosening their trade criteria and get desperate trying to make their money back.  This can lead to a downward spiral of entering subpar setups which leads to more losses and more desperation.  It continues to feed on itself until you start making money again and even at that point, if you are still down a lot, you can still have that desperate mindset which makes it that much harder to get out of the hole.  

The flip side of compounding is losing so much that its almost impossible to come back.  If you start with 100, Losing 50% of your bankroll, and then making 50% back leaves you with 75, not 100.  Losing 90% of your bankroll and making 90% back leaves you with 19.  Excessive risk taking and volatility in your account is a negative drag on long term account growth.  I wrote about overbetting and  optimal bet size several years ago.   

That's why you can teach people the right setups to trade, and still the majority of them will screw it up because they lose their discipline.  

The bounce back from that overnight dip to 4350 in European hours on Thursday has gotten the SPX back to the pre-FOMC minutes break down level of 4440.  Call me old-fashioned, but the 15 minute chart looks like its begging for a retest of 4350 at a minimum in the coming days.  Definitely not shorting, as I refuse to short SPX until after the parabolic rally phase, but it seems odds favor the bears here.  Also, I find it interesting that you got the biggest equity inflows since March 24 last week, as the SPX was weakening from all time highs.  It looks like FOMO has finally caught up as the SPX kept grinding to new all time highs.  Those on the sidelines couldn't take it any longer and decided to pile into equities.  Seems somewhat ominous to me, but doesn't derail me from the BTFD strategy. 

If we do get back down to 4350 or even lower this week, I would be a buyer expecting Powell to be a cooing dove at Jackson Hole ahead of his reappointment decision, with Delta variant as a very convenient excuse. 

Similarly, I am a buyer of dips in Treasuries ahead of the 2/5/7 year auctions and Jackson Hole.  The power flattening over the past several days is consistent with tapering fears in the market, and everything in my gut tells me that Powell will be more dovish than expected on Friday. 

Dips are Fleeting

You can tell the strength of the market by seeing how much time it spends near the highs, how much time it spends near the lows.  The SPX is a textbook example of a market that spends most of its time near the highs, making those occasional selloffs look like crashes, because traders aren't used to the SPX going down and staying down.  Its like trying to keep a beach ball underwater!  

You can't keep a strong market down for long, and that dip from Thursday pre-market during European trading hours was like red meat to the bulls, who ate it up ravenously.  The SPX basically shot out of a cannon on that gap down open.  You see things like that and you know that the next time there is a dip, you can't hesitate, you have to be ready to act, know your levels where you want to get long and then buy when it gets there.  

I managed to get a partial long position in the premarket on Thursday, but wasn't able to get full size as I was waiting for the cash market to open to see if there would be some options hedge sellers coming in to sell the SPX, to add more.  It was the opposite. 

I still think there is another dip waiting within the coming days, with Jackson Hole coming up next Friday and with traders cautious heading into September.  Get your shopping lists ready, this market won't give you much time to get long when it gets down to low risk buy levels.

Dying on the Hill of Reopening/Reflation

It feels like we are at the beginning stage of a risk off period for the SPX, but all signs point to it being a shallow pullback.  

The main reason for just a shallow pullback is the pure strength of the SPX and its outperformance vs. global indices, with very few dips, steady uptrend without a euphoric parabolic rise.  With Powell blatantly pandering to the stock market and trying his best to get reappointed by Biden, you will not hear anything hawkish from him for at least another couple of months.  Jackson Hole will be an exercise in mealy mouth rationalizations for staying dovish.  No way he sets the alarm clock for tapering there.  

Another thing I've noticed is a slight bearish shift in investor attitudes towards individual stocks, especially cyclicals and reopening trades.   They are still bullish, but not as loud as before since they are losing money.  With SPX holding up so well, they definitely have not given up on their trades and are hanging on hopes that the market rotates from growth to value. 

Watching CNBC and Bloomberg, Twitter, etc., I still get the same takeway.  There are a LOT of reinflation/reopening believers, many of them die hards.  They are willing to die on that hill of reinflation/reopening/higher rates.  They are seeing small cap underperformance as a buying opportunity.  They dismiss leading indicators, crude oil weakness, Delta variant, slowing China, and downtrending 10 year yields.  

Maybe they will be right, but the weak price action going counter to their beliefs shows that the pain trade is still lower for the industrials, financials, commodities, materials, consumer discretionary, etc. plays.  

We will need to see these reopening trade investors throw in the towel and give up before you get a long term tradeable bottom in small caps.  Seeing how weak Russell 2000 is, it won't take a big down move in SPX for that to happen.  A move down to 4350 on SPX would probably be enough to do it.  Or a choppy 2-3 week period of pullback to 4400 -rally- pullback to 4400 would also get the job done.   

Here is a video from Wall St Jesus, who captures the current environment well.  Not as bearish as he is, but do expect a shakeout of weak longs in the coming weeks.

With such a dovish Fed, you have an implicit put on the market, so the long term risk reward for longs are favorable, even if you buy all time highs.  The wall of worry is still there, with Delta and Fed tapering still keeping investors from going all in.  As long as that wall of worry is there, and there is no euphoria, you can stay long term bullish.  

Targeting 4380-4400 on SPX for a dip buy.  

All Time High Household Equity Allocation

There is a reason for the underlying bid in this market.  Investors are piling money in at a rate of over $1 trillion annualized into equity funds in 2021.  Compare this to the previous 20 years.  Post 2008, the only years that are over $250 billion are 2013 and 2017.  It just so happens that those were 2 years when bonds were heavily sold and out of favor, just like this year.   2021 is 2017 on steroids and HGH.

Also adding fuel to the runup is the post earnings season buyback window coming in, with stock buybacks providing even more buying power.   Equity fund inflows + corporate stock buybacks + $120B/month in QE.  Also don't forget retail accounts that are now massively invested in individual stocks, more than any time since 2000.  Those are the liquidity forces that bears are battling here.  It is a powerful force in this market, but it will not last forever.  

Counter-acting those forces are IPOs, SPACs, secondary offerings, corporate stock option issuance, which are all substantial, but not on the same scale as the flood of money coming into the market.   

With further Covid stimulus unlikely and the infrastructure package being spread out over several years, the government will have a much smaller footprint on the market over the next 3 years (assuming Republicans win either House or Senate, which is high probability just looking at history of midterms), it will come down to animal spirits and investor psychology and willingness to go even heavier into equities, which are already at all time highs, even higher than 2000 bubble highs.  Below is as of June 2021, so the household equities percentage of total assets is even higher today.

Combine this with record high valuations and the TINA (there is no alternative) sentiment about stocks vs. everything else, it is a long term warning sign. 

The bears have been crushed since March 2020, and most of the time from 2009 to 2021.  Trees don't grow to the sky.  There is long term confidence and  blind optimism towards stocks, passive investing and putting money into S&P index funds as a result of a 12 year bull market.  This is reflected in household equity allocations and this year's massive equity fund inflows.  With a Fed asleep at the wheel and Powell recklessly staying dovish as he seeks Biden's approval and reappointment, I still see several more months left in this SPX up cycle, but all the flashing amber lights are there.  

1999-2000 was a Nasdaq bubble that took the SPX along for the ride.  This time, its a SPX bubble that is taking bitcoin, art, alternative assets, etc. along for the ride.   The breadth and magnitude of this bubble is the biggest in the history of mankind.  And unlike previous bubbles when governments were either on a gold standard or didn't embrace simultaneous bazooka QE and fiscal stimulus, this time, the bailout mentality is off the charts.  

In all likelihood, the bubble will pop in 2022, and the Fed, with their plans on hiking in 2023 will be stuck on zero.  There is no way Powell tries to force even one rate hike like Yellen did in December 2015 into a global slowdown.  The question will be after the taper, will the Fed sit on the sidelines as the bubble pops, waiting for the economy to get worse before acting, or will they reinforce their bailout credentials and preempt the downturn by announcing QE infinity 2.0?  I think it will be the latter.  

But unless Powell decides to buy $120+B/month in equity ETFs on the backside of the bubble, he's not going to stop the bear market.  The Fed is all in on keeping stock prices high.  Powell is Draghi Part 2.  I'm sure he will try to do whatever it takes to keep stocks from going down, and try to be a hero, but in the process, guarantee stagflation and earn him the title of worst Fed chairman of all time. 

The SPX is forming the front side of a massive mountain, the biggest we've ever seen.  It likely goes over 5000 before the top is in.  The higher it goes, the harder the fall.  The back side will be painful for those that are unfamiliar with extended bear markets.  Bitcoin will be destroyed.  If bitcoin can go from 60K to 30K while the SPX is making all time highs almost every day, I can't imagine how low it will go when the SPX enters a full blown bear market.  Sub 10K is likely.  For those that think bitcoin is the new digital gold, you are off your gourd.  Bitcoin and SPX are positively correlated.  Just look at the historical charts. 

August 2011, August 2015, December 2018, and March 2020 were quick drops and quick recoveries.  They have conditioned investors to buy the big corrections, as the market always comes back and makes new 52 week highs within a few months.  But those big drops didn't come after these kind of astronomical equity inflows or household equity allocations.  Long term sentiment towards stocks was never this frothy in 2011, 2015, 2018, or 2020.  Its a different story now.  It will get interesting in 2022 and 2023, when I expect the volatility to come back with a vengeance.  

For the bears:  it will be your time coming up in 2022, if you can survive the parabolic up phase over the next 6 months.  

For the rational speculator:  either take a long break until spring 2022 or hold your nose and go long SPX for the next 4 months and get out before the top.  Or if you don't have FOMO, just wait for a high probability setup to buy on a dip and hold on till year end. 

Gamblers, Speculators, and Investors

Deep down, there is not much separating gambling and investing.  There are 3 levels I would separate them to.  

1. Gambling:  short term bets:  sports betting, casino games like slot machines, blackjack, poker, roulette, craps, etc.  

Most forms of gambling are pure luck, but there is skill involved in poker, blackjack, and sports betting.  The outcome of most bets happen quickly, so they attract the impatient and thrill seekers.  A negative stigma attached to gamblers, even professional gamblers.  Not many people look up to successful blackjack players or sports bettors.  I guess some people look up to successful poker players in the past 20 years due to the poker boom showing up on TV and youtube, but not really a respected profession among the general population. 

2. Speculating:  short to intermediate term bets on stocks, options, futures, bitcoin & cryptos, FX, and other alternative assets.

This is the bridge between gambling and investing.  There are speculators that are like gamblers and there are speculators that are like investors.  This is the most crowded space in the financial community.  This is where the action is.  This is where the money is made and the blood is spilled.  The biggest group of speculators that move markets are hedge fund managers that need to keep up with the averages, that can't afford to have several down months in a row, that can't afford to think in the really long term.  Leads to some irrational price movements from stop losses and forced risk reduction.  I would argue that prices are made by speculators who move in and out regularly, not by long term investors.  If you want to win, you have to know what these guys are thinking and be one step ahead, predicting their next move. 

Choosing the right products and stocks to trade is also an edge.   So is choosing the right time frame where there is the least competition or the softest competition.   

In the markets, the shorter the time frame, the more competitive it gets and the harder it is to have an edge.  I know that if I try to scalp SPX against the HFTs, I'll probably lose.  But if I take the other side of swing trades over 3 to 5 days in pump and dumps traded heavily by greedy retail traders, I have a big edge and will win in the long run.  

With the really long term time frames, valuations usually merge much closer to long term fundamentals, which are much easier to analyze and predict than investor psychology during a bubble.  For example, I have no idea what TSLA will do in the next hour or the next week, but over the next 5 years, just based on fundamentals, I have a lot of conviction that it will be much lower in price.  This is not just TSLA.  Considering how much flotsam has bubbled up in the past 12 months based off of ESG hype, bitcoin hype, biotech hype, I can name probably another 200+ tickers that would go down as much if not more than TSLA over the next 5 years. 

3. Investing:  long term bets on stocks, bonds, real estate, and alternative assets.  

There is a big edge in having a longer time frame than those that are price makers (e.g., hedge funds, short term traders, trend followers).   But there is a caveat.  You can't be leveraged.  You have to be able to withstand big drawdowns.  The market can stay irrational longer than you can stay solvent IF you are leveraged.  If you aren't leveraged, then you can stay solvent regardless of where the prices go in the short term.  

There is a reason why the top of the world's richest are investors not speculators.  That's why Buffett is richer than Soros or all the other hedge fund managers out there who charge exorbitant fees and still can't amass more money than Buffett.  

But in some cases, its better to not be a long term investor.  Like 1999 or 2000.  Like now.  When you are in a raging bubble, and you decided to invest for the long term, that is asking for trouble.  Not all stock markets have been as bullish as the US during its history.  Look at China, Japan, Europe, and some of the emerging markets.  The stock market doesn't guarantee good returns like many believe.  A lot of the SPX outperformance vs global equities is due to corporate welfare in the US. Don't confuse brains with a bull market.

The SPX continues with the low volatility grind higher.  But both bonds and industrial commodities weakening lately.  It feels like a shoe is going to drop at anytime.  Would much rather be in bonds than stocks here.

Meme Stock Graveyard

Retail traders can move stocks up temporarily, but they can't fight the forces of fundamentals weighing down on their favorite names.  Meme stocks are a collection of some of the worst stocks in the market, defunct businesses and or pipe dream stocks that have become massively overvalued due to nonstop pumps from retail and the inflow of dumb money.  

History doesn't repeat, but it does rhyme.  GME, AMC, CLOV, and SPCE are good charts to review and study what happens to meme stocks at the start of the feeding frenzy, and what happens afterwards when the stock gets bogged down by a boatload of stuck bagholders clinging to hopes of a revival to past highs.  GME is the most seasoned of the post peak meme stock plays.  After its crazy run up in January, the lack of new retail money, high prices, and weak fundamentals bear their weight on the stock price.  AMC is entering this phase of the post peak meme stock cycle, as it is now down over 50% from the peak, but still at ridiculous price levels.  There will be occasional spikes higher, echo pumps, along the way, but expect it to go down gradually over time as the bagholder hopes slowly fade away.  Similar story for CLOV and SPCE. 

I bring up the meme stocks because we've got a new one on the horizon, HOOD.  HOOD is a little bit of a special case in the meme stock world, because its a fresh IPO, and the free float is a small percentage of the overall shares outstanding.  Also, unlike GME, AMC, CLOV and SPCE, the fundamentals are not bad.  I would argue that its probably the highest quality meme stock out there, and probably the least overvalued. 

 

I am not saying that HOOD is a good long term stock to own, but I can definitely picture it going much higher due to the small float and the relatively decent fundamentals.  The fact that most of these retail newbies who are piling into the meme stocks have brokerage accounts there probably gives it more staying power and long term popularity.  It is probably the best meme stock "story" of the group.  

HOOD has instantly become a daytrader favorite, and that in itself probably will give it a premium multiple compared to other retail brokers.  It is probably no coincidence that the other main meme stock, AMC, has done poorly in the past few days as HOOD has skyrocketed.  HOOD is taking up all the retail buying power, taking away the fuel that  AMC constantly needs in order to keep the stock price up, which is difficult at these inflated levels.  

The S&P 500 has gone nowhere for the past several days.  A boring market.  Nothing going on, although I still expect a sudden pullback later this month.  Complacency is building up slowly, yesterday was the first day post Monday, July 19 dip that the put/call ratios got to low enough levels that are a warning sign.  A few more days of these low put/call ratios and sideways price action will set this market up for a quick drop.  That is the hope, at least.  I am not making any bearish bets.  Just hoping for a dip to buy. 

2017 Template

I mentioned several weeks ago about the similarities that I see between 2017 and 2021. Another similarity is the behavior of bond yields.  After a big bond selloff post 2016 election, the bond market rallied from March 2017 to September 2017, going from 2.62% 10 yr yields down to 2.03%.  After a big bond selloff post Georgia runoff election in January 2021, 10 yr yields got up to 1.75% in March.  It has been rallying ever since, with 10 yr yields now down below 1.20%.  Both of these bond rallies occurred as the SPX kept making new all time highs, staying above the 50 day moving average, with infrequent, brief, and shallow corrections throughout. 

2021 SPX chart

2017 SPX chart

 

The big difference between 2017 and 2021 is that the Fed was actually hiking rates and tightening monetary policy in 2017, which would eventually lead to a market top in 2018.  This time, the Fed has stayed super dovish and only hinted at a possible taper.

The Fed has now backed itself into a corner, nurturing the biggest bubble in financial history with any kind of rate hikes probably causing a 2008 style collapse in the stock market.  

We've gone beyond the moral hazard of the 2008 and 2009 bailouts.  Almost everyone who is investing now believes that Fed will come to rescue whenever there is a correction in the stock market and the Fed is basically a meme now cranking the printer going brrrr.  

Tapering QE is now like rate hikes back in the old days.  Rate hikes are now a long term theoretical construct which were possible in a pre-bubble environment with decent organic growth, but are untenable in a zombified overindebted corporate financial system that relies on super low interest rates and an implicit Fed backstop during stock market corrections.  Rate hikes in this era would collapse the house of cards that has been built and violently pop the biggest bubble ever, so they are out of the question.   

The bond market is beginning to sniff out the distinct possibility that the Fed is basically at the same spot that BOJ was in the early 2000s, and the ECB was in the early 2010s.  5 year yields are now trading under 65 bps.  Once this bubble pops, whether it be 2022 or 2023, that will effectively kill any chances of raising rates during the boom portion of this cycle even as inflation stays high for an extended period of time.  At that point, you are probably looking at the 5 year being back at their 2020 levels of 0.25%, and 10 year yields going back towards 0.50%.  At that point, there will probably be serious discussions about negative interest rates in order to see if the positives of the wealth effect from higher bond prices and lower corporate bond yields would be worth it to cross the Rubicon and accelerate the de-dollarization of the financial system.  

Financial history shows that when the masses start investing heavily in stocks as they are now, with the highest valuations in the history of the US stock market, bad things will happen.  Its not a matter of if, but when.  My bet is that the shit hits the fan in the second half of the 2022, as the midterm elections get closer, with a high probability that the Republicans will win either the House or Senate, if not both.  Once the realization of gridlock and no more fiscal stimulus till 2025 hits, it will make the fiscal cliff of late 2012 look like child's play.  No more fiscal stimulus would be one of the worst pieces of news that the market could get.  After all, there is no organic growth, it is all fueled by fiscal and monetary largesse.  Even with QE, unless the Fed jumps the shark and goes full BOJ and starts buying equity ETFs, the stock market will be in big trouble. 

But let's not get carried away and think too far ahead.  The bubble will get bigger before its all over, so its still better to look for longs than shorts.  Price action and the charts tell you that its still a BTFD market, as the dips are rare, and when they come, they don't last for long before V bottoming and going back to all time highs.