BULLS GETTING GREEDY AS SENTIMENT STRETCHED…BIG TIME

Headline:
Equity Markets Love Covid Driven Liquidity

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There Are Almost An Infinite Supply Of Equity Market Indicators.

Still…No One Indicator…Or Even A Cocktail Of Many Indicators…Is Even Close To Perfect…Let Alone Regularly Reliable.

Frankly…Most Indicators Are Entirely Useless…When Tested Across Vast Data Sets Over Just Medium Time Frames.

But A Select Few Do Merit Attention.

One Such Indicator…Is Investor’s Intelligence Weekly Bull/Bear Data.

Yet…Despite It’s Relatively Simple Presentation…This Data Series Can Be Surprisingly Subtle To Interpret…

As It Can Be “Sliced + Diced” Into Scores Of Iterations.

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Anyway…According To The “Sliced and Diced” Version…What Does It Currently Indicate?

That Professional Money Managers Are Excessively Bullish…To A Rare Extreme.

But Just Because This Contrarian Signal Is Flashing BRIGHT RED Does NOT Necessarily Indicate That Equity Markets Are Primed For A Short Term Sell-Off…Though That Could Easily Occur.

Further…Even At Presently Taut Levels This Particular Sentiment Indicator Could Prove “Sticky” For Several Months…Through Year End ’20 Without Much Of A Problem…As Its Tactical Value Is Debate-able.

Eventually Though…It Will Reverse…Its Strategic Worth Is Reliable + Solid As Texas Oak.

So When The Sentiment Data Actually Do Revert…Equity Markets Are Particularly Vulnerable To A Sharp Move Lower.

There Just Is Not Much Slack In The Markets For Any Unfavorable News…Or Just Maybe…Not Enough Favorable News To Maintain Richly Valued Indices/Shares.

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Thus…To NOT Include This Sentiment Data In A Quiver Of Broad Qualitative  + Quantitative Market Indicators…Could Be Costly…

As The Big 4 Equity Indices Have Rallied Tremendously Off Of Their March ’20 Lows…Without Much Of A Meaningful Pullback.

Consider The Following Returns Since March 23, 2020…

SPY = + 68.19% [see above]
DIA = + 65.29%
IWM = + 93.79%
QQQ = + 85.01%

In Just 8 Months = Simply Remarkable.

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The 4 Primary Reasons To Account For The Equity Rally…

1. Federal Reserve Liquidity Injections [see shaded portion of chart].
2. U.S. Treasury Liquidity Measures.
3. TINA = There Is No Alternative [to equities].
4. FOMO = Fear Of Missing Out [on equity gains].

…Are NOT ABSOLUTE + PERMANENT.

But…For Now…Are Perceived As Such…

Hence…Almost Unprecedented…Colossal + Unrestricted Bullishness.

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Naturally…Bullish Sentiment Could Elevate + Propel Even Higher…But That Scenario Would Likely Be Short Dated.

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Contact The Author: Dominate@GlobalSlant.com

JOHN Q. PUBLIC = A ROYAL PUSSY…AND THE FED LOVES PUSSIES…WHOM ENABLE THEIR RADICAL POLICIES

Headline:
Federal Reserve Has Assumed Total Control Of Financial Asset Prices…Equities “On Deck”.

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The Federal Reserve Balance Sheet Has Increased:
…29.4% In 3 Weeks.
…60.7% In 7+ Months.
…567% In 12 Years

Consider That…In Just The Past 3 Weeks…The Fed Has Bought 1.5x The Size Of The Entire Balance Sheet In 2009…Of Which It Took 75+ Years To Accumulate.

And…John Q. Public Could Not Care Any Less.

He Just Wants His 401k To Increase…No Matter What It Takes…

Even If It Requires Him To Assign The U.S.A.’s Current Liabilities To His Children + Grandchildren…As The Federal Reserve Buys Virtually All Indentured Financial Assets…INCLUDING Caverns Full Of U.S. Treasury Debt.

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So In The Midst Of A Global Economic Train-Wreck…The Federal Reserve Is Acquiring Any Debt Instrument It Can Get Its Claws On…Leveraging Both John Q. Public’s Fear + Ignorance…

While Augmenting Its Already Ridiculously Excessive Powers.

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Concurrent To The Real Economy Cratering…The Federal Reserve Miraculously Creates An Economic Mirage…Through The Lens Of The Financial Markets…That All Is Well…As They Yield Their Money Printing Superpowers.

Of Course…This Is “Old Hat” To The Fed…As The Decade [2009-2019] Of QE Inspired Financial Market Panacea Was Just A Primer To Today’s Jagnormous Market Manipulations.

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This Tweet…Courtesy Of Bloomberg’s Jonathan Ferro + Deutsche Bank Effectively Sums It Up…

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Naturally…John Q. Public…And So Many Other Pussies…Will Only Tremendously Applaud…

Because To Them…

ECONOMIC REALITY = “SUCKS
+
ZOMBIE MARKETS = “RULE.”

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Contact The Author: Dominate@GlobalSlant.com