The underinvested funds are scrambling here looking at a market going away without them. This train has left the station without many passengers on board. We are up almost 40 points in 3 days. All dips will be voraciously bought by the underinvested longs who don't want to watch another runaway move go without them.
We've got one of the biggest hurdles that was in the market's way out of the picture. Greece is no longer a worry, at least for a couple of months. The prices should naturally be higher after they get their bailout. This move probably has at least a month to go, so you have to be careful shorting here. Look to buy, not short.
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9 comments:
This is too easy.
The market is moving EXACTLY as everyone thought it would. This in and of itself is frightening.
Next stop- a move lower after July 4th,, maybe for a week or 2.
Then the debt ceiling is raised. The markets move higher til the end of July.
Any worries on QE2 ending?
It isn't moving like a lot of people thought. People hedged their long exposures or reduced it on QE and Greek worries and now are finding the market runs away without them.
A lot of people also thought they could buy at 1250. Many of them are going to be buying dips here (because a buyer is a buyer, he'll get in sometime) because it's not going to 1250 anytime soon.
So everyone thought the market would continue higher, but most of them also thought it would be after hitting 1250 or lower still. So in that sense it is doing something completely different, messing up all those hopes and dreams of a nice clean entry at 1250.
Exactly! That is why I didn't think we would hit 1250, because we had already gotten a lot of bearishness when we were trading at 1260-1270 SPX. There are still not a lot of believers in this market despite the 3 strong up days. That tells me a lot right there.
No, I am not worried about QE2 ending. The liquidity is not being taken away, it is being left there with reinvestments. I would be worried about a downturn if they let their balance sheet gradually shrink.
Really?
Ok, then we shall do a little poll of your readers.
Who missed this 3 day rally and are you chasing it now?
I'm long 2 positions, also 80% cash and NOT chasing. I think we go back down soon. I Say we hit 1280 before 1340.
This market is trading similar to last year. The only reason we rallied hard the last 4 months of 2010 was QE2...which we lose tomorrow.
You bulls better pray the economic numbers start coming in Much better!
You said it you are 80% cash... you will eventually buy the dips... clearly I am not 80% cash but I run a an OTM put strategy for the real unexpected.
they planned the greek charades squeezeathon 2 days prior to the end of qe2.
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