A Trading Veteran's Market Perspective

A Trading Veteran's Market Perspective

We finally got the "required" breaks in Amazon (AMZN) and Netflix (NFLX), not to mention the Tesla (TSLA) fantasy. Also of note are Disney (DIS) and General Electric (GE) - key members of the equity cult. The big buy back announcement from GE, that got the idiots all fired up, fizzled (back below the pre-announcement level) and the straight up, mindless pursuit of "momentum" in DIS, got the "attention" of the robots when it broke - not a healthy sign when one of the key components of "The Dow" gets slapped hard (this gets the attention of all the soccer moms and bartenders who recently "discovered" the stock market.)

The hype surrounding the 200-day moving average (MA) is another ominous signal. The 200-day MA is a time tested support when in a bull market. There will be anywhere from two to as many as four or five VERY QUICK tests of that support. However, what all these "newbies" don't understand, is the fact that each "test" drains more and more firepower behind the bull move. 

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In the Wilderness - Paul Singer, Elliott Management Corporation

In the Wilderness - Paul Singer, Elliott Management Corporation

[T]he financial system (including the institutions themselves, products traded, and risks taken) has "gotten away from" the Fed's ability to comprehend. The Fed is primarily responsible for that state of affairs, and it is out of its depth. Former Chairman Greenspan created -- and reveled in -- a cult of personality centered on himself, and in the process created a tremendous and growing moral hazard. By successive bailouts and purporting to understand (to a higher and higher level of expressed confidence) a quickly changing financial system of growing complexity and leverage, he cultivated an ever-increasing (but unjustified) faith in the Fed's apparent ability to fine-tune the American (and, by extension, the world's) economy.

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