"Worried about a Melt-UP"

don' t melts up occurr in the last phase of a bull market ? to me the most logic thing would be 200 ema touch and then slowly down to revisit the lows. it would mean something like 3% more and then game over for a few months  

don' t melts up occurr in the last phase of a bull market ? to me the most logic thing would be 200 ema touch and then slowly down to revisit the lows. it would mean something like 3% more and then game over for a few months  

no...........

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..."

 

MoneyMarkets05-15-20.gif

why worry about a predicted melt up?      watchin the sky has put a crick in my neck since 09

What would you call the move after the break above 195 on the Qs?

It is actually approaching the highs FASTER than then the original meltup move since the break over 195.

Bears DO NOT want to see SPX above 3030....

This looks like re-ignition after a shakeout to me on Qs....

That previous high likely to be taken out soon now...and left in the dust....

Look at the break out in momo on this move up....not what you would expect to see at a top...

Edited by K Wave, 18 May 2020 - 01:18 PM.

And here is the Dow, which appears to be reclaiming the 900 day MA today while obliterating the right shoulder of the potential, now failed, H&S setup.

IF this launches from here over the next few days, and momo breaks out to fresh highs, do you really want to short into that?

You could turn out to be right, and we are close to a top....but have a Plan B...

looking at the tech indexes it's a melt up for sure, but the spx isn' t even close to that so far. So which one of the two sectors tells the truth ? 

And here is the Dow, which appears to be reclaiming the 900 day MA today while obliterating the right shoulder of the potential, now failed, H&S setup.

 

IF this launches from here over the next few days, and momo breaks out to fresh highs, do you really want to short into that?

 

You could turn out to be right, and we are close to a top....but have a Plan B...

 

 

 

the failed h&s is a right observation, that I also noticed and the target of the 900 ma is right too...........but then ?

And here is the Dow, which appears to be reclaiming the 900 day MA today while obliterating the right shoulder of the potential, now failed, H&S setup.

 

IF this launches from here over the next few days, and momo breaks out to fresh highs, do you really want to short into that?

 

You could turn out to be right, and we are close to a top....but have a Plan B...

 

 

 

If it goes to new all time highs from here ... it will be the largest double top in all of history..

Edited by Dex, 18 May 2020 - 01:37 PM.

The $3,000,000,000,000 money inserted in circulation has to have an effect, with another $3,000,000,000,000 in works.

Also as Mark points out, 2-Month AA Financial Commercial Paper is yielding just 19bp is guaranteed loss net of inflation and is TAXABLE income.

Negative rates anyone? Is it any wonder the cash is stampeding into stocks? Myself included! I hate monopoly money  

It's Trump money, which is much lower grade than monopoly money.  Isn't any one concerned? This morning Kudlow was floating another corp tax cut to 10%. Absolutely no benefits from trade deals.  We went through 3-1/2 years of verbal market manipulation with trade deals and now we're talking about tariffs again. Tough talk with China ensures huge military spending and billions more aid for farmers - 47 billion so far. It seems that everyone just cares about a rally but these guys love leverage and debt without any way to pay for it and you-know-who is doing it with our money this time.  In '80 we had stagflation and 19% interest rates, 40 years of rallies and we have 0%....anybody ready for stagflation and some..... POTTERSVILLE?