All it takes to find out just how much conviction so called bulls have in this rigged, centrally-planned market and short squeeze, which only goes on as long as faith in central planning still exists, is a major intraday reversal, coupled with a surge in gold. Like the one today in the aftermath of Draghi's abysmal press conference. The result: first Goldman saying "the recent relief rally might be short-lived", and now here is Evercore ISI's Rich Ross with a note in which he once again expected the S&P to plunge to 1,670 in a note titled simply enough...
My Bullish tactical call is over. While we have repeatedly highlighted 2030 as our upside target, the rapid post ECB reversals in the cross asset technicals dictates that we abandon our tactical view at this time in favor of a far more defensive posture. Our structural Bear Market call with downside to 1,670 remains intact. We would sell Global Equities and Commodity Currencies (BRL, CAD, RUB) on the back of recent countertrend strength and buy Gold.
I do not expect the world to end overnight, but I do feel strongly that the countertrend rally in risky assets has likely run its course and that the risk/reward to continue to play for tactical upside is simply not acceptable given the current macro technical backdrop.
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Expect many more formerly bullish flip-floppers now that faith in central planning is shaken to the core.