Most Perfect storm brewing... all technicals at massively overbought conditions as we head in to earnings week.
Put buying on SPY squashes call buying.
Gap up, distribute...gap up, distribute...gap up, distribute (all gaps up on no volume)
Every polyana under the sun literally screaming at you to buy stock. Even telling you to buy the banks.
Housing in double dip, Fed going to pull the punch bowl, the treasury yields are at levels they were before QE after the fed buys 850B in toilet paper bonds. Interest rates rise as the bond market knows the inflation that awaits
Weekly bear report shows the biggest drop in 7 years down to 15%; contrasted with last year's 24% of bulls in August lows
Gas already at $4 a gallon, AND WILL GO HIGHER as the prices today hit the gas pumps tomorrow---yet retail stocks shoot to the moon.
Government shut down as spending is being cut...government jobs being sliced in local and state entities.
VIX at 52 week low this entire week (shot up today).
And yet things just couldn't be better.
I read an interview with Rickards. Long read, but very interesting. He makes some great arguments on why he thinks their will be more QE after June, but he also thinks that the Fed/United States is effed no matter what. Either way, more QE or not, the markets and the global economy is going to get messier. Hyper inflation around the corner I guess.
I agree there will be perceived tightening. Many in the market may are thinking now is a good time to start pulling investments due to the general consensus that there will no more QE. The idea is to destroy the USD and other currencies so they can bring one in that the world accepts.
Always a pleasure to exchange with you, thank you.
I like the phrase you developed... "Eye on the Prize". That pretty much sums it up. Their myopia and focus will keep their eyes on the prize.
I could post links all day as well. Some commentary would be great....I don't mean to be offensive to you at all, but whenever I hear, "will never stop" or people making extreme claims, it just gives me pause.
I agree with most of your points and line of thinking. All my reasoning is based of the fact that the corporately run goverment could care less about actual public sentiment, we all know where their true interests lie. In short, I am COUNTING ON the Government Inc. to do what is in there best interest.
Maybe they will implement some sort of easing policy "as needed", but most of the Fed Heads seem to oppose it and they have their eyes on the prize, which is to maintain control over the global currency system and control over the world supply of oil. THE FED KNOWS EXACTLY what level of inflation risk they have created, what the likely effect it will have on our economy and are organizing for it appropriately. They have done all they can to hold back the tsunami of inflation that is about to run through our country(and the entire world BTW) and they will control it to a large degree, but it is coming. They are not going to risk killing the sacred cow (control of the global reserve currency) just to run up the market a bit more and make some pocket change. After QE2, QE enmasse is over. When the realization starts to set in (as it is right now) that the liquidity in the markets is "drying up" along with all the speculative money that is going to be sucked out, I expect a significant pullback in the global markets.
I do expect a drop in the markets. I think there will be a major correction due to no more QE3..Good for FAZ
You asked for a reference on why QE will never stop: