From my weekend letter:
"...Normally, we should be heading for higher ground. I wouldn't blame anyone for doing so, but I'm looking at stuff that just makes me worry about a melt-UP. All that accumulative shorting in SH is one. Most of those traders are underwater, even if they are hedging, that has to hurt. Also, all the amateurs are Beared-up to the point of flashing Buys (TSP, AAII, and FinTwits). The Relative VIX remains quite high. Meanwhile, 2-Month AA Financial Commercial Paper is yielding just 19bp. That's a guaranteed loss net of inflation. This has to be a driver of massive sums into the market on every dip. Many of these pools of money aren't even seeking market returns, just something better than inflation. They can use the plethora of derivatives to customize those returns. Meanwhile, there is an absolute TON of money in money market funds (h/t to my colleague Callum Thomas--see chart below). There is such a Bearish lean and so much fuel for a rally, with no place else to go for a positive return, I wince at what will happen when the pain gets to be too great..."