It takes a Lot…
For me to say I cannot believe what I am seeing.
Fifty years of trading did not prepare me for the election response I am seeing the past two days.
Undoubtedly I am looking at markets as an old man, not the youngsters who are leading the charge. And we no doubt are seeing the older pension fund managers totally afraid to go against this tide and analyze markets on a risk adjusted basis. So we are at some point in the FED funny money blow-off that started in Bernanke’s 2011 QE2 adventure.
Here is our updated (today at 10:00 AM CST) Macro Economic Cycle chart. The upside bounce, maybe should call it something else, is unbelievable to me.
A bounce like this means one of two things, either the stock market is going a lot higher, or the youngsters are totally out over their ski’s on this move.
Over the past two months I was feeling really good about the August 7 Macro Economic call and even today it is kind of ok, stocks are up around 6 % from that day while gold and bonds are down around 6 %, kind of a wash.
Election Response – A Strong Dollar ??
In my search for insight here and help me decide if the youngsters are wrong on stocks, I am watching and putting on a trade to reflect my thinking that if Biden is confirmed as President, that we will see the world look much more favorably to the US dollar. So here is a chart that monitors that scenario, it is long the dollar and bonds, and short Gold, the S&P and Nasdaq 100, equal 20 % weighting. If my view is correct, we should see the index double in the next 6 months.