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Peak "Greater Fools"?
The ratio of bulls to bears has never (that is ever) been higher according to (the perhaps ironically names) Investor's Intelligence. There are now more than 4x more bulls than bears and even more concerning, the only time "bears" have been lower than the current 14.3% was in the spring of 1987...
h/t @Not_Jim_Cramer
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a bearded academic might consider this proof-positive that this is the right time to taper? of course there is no chance of a QE feedback mechanism here. none.
Is the bearded one taking self-admiring selfies ?
A job well done indeed ??
Go and buy puts.
Go and buy December 2014 puts on the S&P and DJI. Then just wait.
Wait for what..? For your puts to expire worthless courtesy of the decay & the Fed?
Given the death of the "market" I don't think that bears capitulating is indicitive of any market correction.
To me it merely displays that everyone knows that there's only one game in town, and when it blows, there will be NO winners.
Armstrong - How is this a bubble if retail isnt involved?
every muppet waiter is a finance expert now. perhaps 'retail' doens't have any disposable income to throw away and 'be involved'
Erm there's this thing called the 'taper' where $1trillion a year of price ignorant buying dries up.
Oh yes... the Taper.... right next to the fairy, the mermaid and the unicorn.
The only thing that determines the price of anything is the flow of buyers and sellers, everything else is merely a second tier factor.
The special thing about QE is that it represents a gigantic buyer who is not in any way price sensitive, the Fed has promised to spend $85bn a month NO MATTER WHAT THE PRICE IS. That is why markets have rallied to silly heights. Because no matter how high the price, the flow of buyers remains stable.
Courtesy of the Federal Reserve the flow of buying is not slowed when economy of price becomes less favourable.
If Ben Bernanke were buying sand he would buy $85bn of it, no matter if it were $100 a ton, $1,000 a ton, $1m an oz, or $85bn a grain. No matter what the price, he is going to spend the full $85bn. QE is perfectly ignorant money. Ben Bernanke has an infinite supply of it.
It is the Holy Grail of asset bubbles.
That is why the taper represents the precipice. Few people understand how far the market will fall before buying flow and selling flow reach an new equilibrium.
It is also why few people understand just how badly $1trillion of perfectly ignorant money can destroy prudent capital allocation.
"'Ben Bernanke has an infinite supply of it (money). To the extent that the Fed conjures into existence a Trillion dollars of FRNs, they create a claim on U.S. dollar denominated assets. So the supply isn't infinite.
But only time will tell when/if the Fed can continue. Increasing "excess reserves" is a pretty good indication that someone doesn't want more liquidity out in the real economy.
NO, THE bid-ask spread is a function of the brokers & the HFT algorithms and far exceeds the % moves of the buyers & sellers in the options market.
You can only win maybe 1% of the time against those front-running cheaters unless your game is a very long one, weeks to months, not hours.
Yeah, even if you're right on the direction, the market makers will steal all your money on 'time decay' and volatility. If you can sell uncovered calls and are a big-time gambler, sure, sell December 2014 calls. I think even the 3x ETFs are less rigged than the options market.
Ya, it's obvious in the bid-ask spreads. There's times when the bid to sell it back is way, way off, as if you were another 5 out of the money, and then what do you do? The ask will look as what you expect but the bid?
No, very far off.
So how did my puts do today?
Oh look, they're up dramatically.
And remember to take profits quick. In 2008 the Reverse 2 and 3 x index ETFs soared from $ 40.00 - $ 50.00 to $ 600 - $ 800.00.
The calls soared higher, but they did'nt stay at that price for more than a couple of days.
I like the trade. Vol has been very low, thus time values are depressed. Buy 'em well out of the money and you're not spending a lot of money. It's like putting your chips on a corner at roulette and getting single-number returns.
Odds that you hit are low, but it's a cheap bet.
It is astounding how many people still think they are going to time this crash. Bernanke/Yellen's fingernails will be left in the ledge when this one falls off the cliff. They are going to hold on for dear life and then some. If you want to pretend you know when that will be, be my guest but you are greatly fooling yourself.
puts can be priced too expensively & expire.
HVU, VXX, UVXY don't expire & are big inverse ETF's for the market indexes, UVXY & HVU both being -11x roughly.
11x power multiplier inverse to the market sounds like a very good idea. Today the constant is around 217 for HVU but normally sits around 219, for this equation:
219 = HVU 1/11 x SPY
for UVXY I found the constant is around 232 but the equation is the same. No expiry, cheap share prices. Just figure how many shares = 1 options contract & realize they don't expire... therefore a lot of time-risk is removed.
They all have ETF decay but that's not the same as a sharp drop to zero at a hard-set date.
Instead of removing the punch bowl, it was refilled and supplemented with a Cocaine tray.
Party on....
The Euro is being bid as a safe haven and a spot for hot money.
Somebody is spikking their cocaine with heroine.
I prefer a Cocaine Tree. And a lady in a turban. It is Xmas after all.
Just put on your sailing shoes ...
Hmmmmm.....1987...That year rings a bell.
I am afraid we have fools who are greater than your little chart there.
Steve Liesman?
His name should be on the chart.
Hmmmmm...This load of BULLS definitely BEARS watching.
Thank god some common sense prevails on Z/H.
Why the ' long faces ' peeps? 'Twas only last week that John Kerry gave me permission to land my small private jet on his as his yacht was undergoing some minor renovations.
Love the title! Thanks for the smile....
"the only time "bears" have been lower than the current 14.3% was in the spring of 1987..."
I think what Taylor is trying to tell us is to buy now, and sell for a nice profit in about 5.5 months...
lol. Peak idiots.
Nothing could go wrong.
Hahaha
I'm waiting for the days that nothing will make the market go up.
Ah but hell the FED can just start adding zeros. But heck once debt gives negative GWOTH - the more zeros they print the more our economy will go to hell.
And what does "intellect" has to do with all this? Nada!
Peaks and shallows; a tongue in cheek response :
...There have never been so many greater "shallow" fools than the austerity Bears today;... would laugh the Bulls on a 2014 rampage.
"We can see the light at the end of the tunnel !"
Hahaha...Limelight or... "fire damp" in the coal mine... and then Boom!
Nice contrarian dream of Bulls stampeding into the WS kaboom. Chinese new year 2015 will be fun.
Ofcourse, after the world cup of Brazil; Heaven can wait before unleashing the Kraken.
Quick! Everyone drive headfirst into the (ces)pool before it gets drained.
As for me, I have no stomach for all the madness, HFT algos, moral hazzard, POMOs, and USSA debt, so it's FINI for me boys! The last held security in the portfolio was sold as a short term cap gain this morning with a 350+% return. Its physical assets for me until furture major disruptions in the hologram playout. Just observing the expansion and probabilities as a bystander. Enjoy.
http://www.youtube.com/watch?v=jKpVlDSIz9o
If I had billions of other people's money to gamble with, I'd short the shit out of this market, but I don't, and I can't afford to be anally non-tapered by the FED.
The 'social media' group (TWTR, FB, GRPN) bucks the trend today, rising into falling indices. If EUR/JPY is actually what's driving the market, this is either showing some incredible optimism or incredible naivety - but I would think there's no better place to draw in the last of the retailers than the social media sector....
Smith and Wesson doing alright on actual fundamentals...like sales of guns... stuff that used to matter.
"Now, Smith and Wesson Holding (SWHC), which reported earnings of $0.28 a share after the bell yesterday beating estimates of $0.21, though profits fell from last year when the company posted $0.31. Revenues did rise 2% to $139.3 million. Even though demand for handguns has been on the rise and sales were up, the company blames the loss in profits on costs being higher. Smith & Wessen is up almost 42% year to date."
http://finance.yahoo.com/blogs/hot-stock-minute/costco-misses-estimates-...
Oh, and there is no inflation.
Can we we that on a log scale?