That is one of the huge disadvantages that they have versus the bulls on the board in making money in the market. The other thing I have noticed is that there are not any bears who understand the role that the futures market has to determining the level of the stock indicies. They also fail to understand the role that computerized trading and liquidity has in the market. In summary, seems to me that most board bears are 10 to 15 years behind the times. It is like they are bringing a knife to a gun fight.
You don't understand the liquidity piece of the equation so let me explain it to you. The market shot higher on $85B of bond purchases/mo that lasted for about a year. The Fed is now purchasing $45B/mo. Let me stress this -- it does not matter that they are still purchasing bonds because they are no longer at the level they need to be for the market to continue significantly higher. And when they're reduced by another $20B, the market almost certainly will decline. Let me give you an extreme an example so that you can properly process this and not make another dumbshyte post (I can't take them anymore). If the Fed expands its B/S by another $6T through further QE (which will eventually happen of course) and then stops, and then announces another QE program of $20B in bond purchases/mo, that would be terrible despite the additional liquidity. Because the money supply is so large in this example, additional liquidity of this proportion would not matter. Going back to reality, the economy and the stock market will soon need more than $85B per month in bond purchases in order to keep the economy slowly dragging forward. $45B or less, considering the money supply, cannot propel the economy and the market higher.
Sentiment: Strong Sell
I understand t/a well enough. But I find it of no use at all anymore in a totally Fed controlled, unidirectional market environment. My methods only work in a economically driven free market with natural ebbs and flows. In the present environment one should either be long term long or short and not be trading short term at all.
I was directing my comments more at the puds of the board who read Zero Hedge and come away believing the market is going to drop 20% almost every time there is a bad news story. How many times have we heard "so it begins" out of jokers like pud and his dung beetles?