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The Heads I Win, Tails You Lose Market.
If you recall, I predicted a six month bull market in global equities on September 1, inviting much abuse at the time (click here for “My Equity Scenario for the Rest of 2010” at http://www.madhedgefundtrader.com/september-1-2010-3.html ). My logic then was that once the market spent six months sucking in bears into expanding their positions, it would quickly reverse and race to the upside.
The triggers would be better than expected corporate earnings, and the removal of the midterm elections as an unknown. What I did not expect was the Bernanke assist. After spreading gasoline everywhere with zero interest rates, Ben has now slyly produced a book of matches.
As you can see from the chart below, the stimulative impact of his strategy began to work almost immediately. Monetary inflation took off like a rocket in September and is about to punch through the threshold to positive numbers. Emboldened “double dippers” were pooh poohing this prospect only four weeks ago. Those few of us long enough in the tooth to remember real price hikes can tell you that monetary inflation is the certain precursor of the real kind, where the prices of actual goods and services go up.
The net net of all of this is that we may see the broad based rally in the prices of everything continue far longer than we realize. It makes the 1220 target for the S&P 500 I put out only a few weeks ago look conservative (click here for “Bring on the Bernanke Put” at http://www.madhedgefundtrader.com/september-27-2010.html ). We may get some profit taking and a dip going into the midterm elections. If we do, get on board the money train for a year end ride.
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
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good call but as i started in this wild west world of "financial blogging" i have never strayed from my focus on the governments and not the markets per se. in short "your call is good" but "government is in disarray."
The joke is on all those who think there is actually a coin.
This is just the "you lose" market. No choice, nothing random, one side market.
MHFT-
From what I am seeing ,I agree with you .
Long inflationary commodities !!!!
Food #1
Fuel #2
PM 's #3
Agri #4
Wow. Quite a revelation! Anyone with grey hair involved in the 70's ramp-up in all U.S.$ - denominated assets knows that one must NEVER UNDERESTIMATE THE REPLACEMENT POWER OF EQUITIES WITHIN AN INFLATIONARY SPIRAL. It is also helpful to be humble.
Don't confuse inflationary monetarist printing-press-driven bulls markets with brains.
A trained chimp could make money with Uncle Ben in charge of the inkjet.
So you were right for the wrong reasons?
better to be lucky than good!!
First post for a newbie. I understand how HFT skims a bit of money off of the retail investor, but am I missing the larger picture? Watching this crazy september into october market and I can't help but think that there is collusion going on between the TBTF banks. If GS sells SPY to MS for price x, then MS sells back to GS for x+1, then GS sells back to MS for x+2, ad infinitum, they can raise the price level of SPY to anything they want for essentially no cost, but increase their book value/reserve levels. Do people here think this is happening? Is this what is implied with the HFT that I just didn't get until recently? How do you hedge it (other than PM and agriculture commodities), or do you just ride the wave? I have a friend who always bets with the house at craps because it's the best odds in the casino. The rest of the table glares at him all night, but he always eats a free steak dinner in vegas...
i see you have been watching well. welcome.
Just stealing the opening spot. Nothing else...............
Just stealing the opening spot. Nothing else...............
Just stealing the opening spot. Nothing else...............
i thought that was funny. okay, back to work.