"The trap door is there. Just short the market, and collect."
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federal reserves...
I see what you are saying, but I do not think it is that easy or simple -- even though I am sitting on a fair number of shorts, I am also ready to cover in a heartbeat if I decide my timing was off. Fundamentally, I see no convincing arguments whatsoever for the market to be at current valuations and looking just at that plus the very extended technicals and very bearish indicators I would normally be heavily short without fear.
But this is no ordinary market rally that we are in, and it has been initiated and driven the whole way by the Fed, which is a bottomless pit of money doing everything possible to make the shorts suffer and drive the markets ever higher. In turn, the Fed is driven by the knowledge that if it were to fail in this Gambit, the result will be a global recession (or worse) that will be very difficult to recover from. For the Fed, and for the nation, there is a lot at stake.
The hedge funds and mo-mo boyz are driven by the safety net that they see the Fed has placed under the markets, and as long as they trust that safety net, they will help drive the markets up with little fear. On the other hand, they saw the rug of an almost identical safety net pulled out from under the bond market with disastrous consequences (we have yet to learn all the damage done there) for the carry trade and derivative players who leveraged their bets based on trusting the safety net of the Bernanke put. That has to have put at least some fear in the hearts of the equity traders and I think that at the first sign of AG losing control they will lock in profits and bail.
Until that happens, though, AG has been given a green light to drive the markets higher with no argument from the funds and mo-mo boyz even though they no longer seem eager to help with aggressive buying of their own.
mlsoft
AI
Market Data 
Markets 
