by Gavin M.
Before you read any further, read our disclaimer. Anything we write on our blogs are opinions not trade advice. You trade at your own risk. Furthermore, know that I am a notable bear or sell side trader so I could be wrong 100% of the time, you never know.
Alright, now that we have got that out of the way, where is the market going? I think we go higher. Why? Well, if you have been paying attention since Monday, the market does not want to go any lower. Sure, Greece is bad. Sure the entire world is on the verge of World War 3, but look at the US or even Chinese stock markets, they're both partying like it's 1999.
Yellen specifically told all of you to go long because "she got this" homie. The words "accommodative policy" and "focus on the trajectory not the timing of the rate hikes" just goes to show that Yellen does not want to spook the markets. She wants it to keep going higher so that it looks good and it feels good. It doesn't matter if our fundamentals is getting shot. It is actually better for her because she will keep saying they are data-dependent and really are ready to raise rates. The truth is that they will keep waiting until such time the data starts to get a bit worse, so that they will have cause for another stimulus package a la QE4 or something interesting.
I sound like a bearish, doomsday hack on TV or on some random blog somewhere. I am not David Faber or Peter Schiff. I am just a trader trying to accept what is in front of me while suspending my own version of reality. You have stupid analysts out there touting the long USD trade to their clients for weeks now only to see the USD further sink into the abyss. I would know because these are the same analysts who said to go long USD when EUR was at 1.08 or Cable was at 1.53. How many of those traders who followed these people have lost their arms and legs?
I used to be extremely bearish in the markets only trying to do the short trades. I am not capitulating either. I guess what makes me mad is it took me awhile to really stop using my brain and just accept this new form of reality. When the markets show resilience in the face of worsening fundamentals, you really have to do what you got to do and go with the market direction.
Some idiot on twitter was being a jerk to me saying I did not put my money where my mouth is about going long ES. Just because I am bullish does not mean I have to go long ES. There are a ton of trading products out there I can use to be long the market. For example, I was monkey hammering the VIX into submission instead of going long ES. I did also mention that I met my weekly quota so there was no need to deploy capital where it is no longer needed.
What I find funny are people following me on twitter trying to find my flaws. Better yet, they get mad if I do not provide some proof of my trade. What are we 7? The premium trade ideas we provide, we give to our clients. These retail clients pay us $100 a month for these ideas. Why, oh why, would I suddenly give good trade ideas for free? The whole idea of capitalism is to make profits, not to be charitable.
The markets are going to go higher like I said. The only thing that would ever take these markets down are either one or a combination of the following:
1. Greece's utter collapse and contagion really hitting Euro area banks
2. Some other G7 nation collapses
3. The Central Banks' running out of ammo
4. The FED miraculously gets indicted for criminal act (unlikely, but hey, let's be hypothetical and dreamy)
5. World War 3 (well, bullish if you're long BA, LMT, GD)
Even if we get an economic crash, the central banks of the world will do their best to mask the effects by pumping massive amounts of liquidity. When all of the central banks' resources are exhausted, then, and only then can we really see a real market crash. But hey, on this note, as a bear, I am perfectly happy being terribly wrong.
But for now, you either go LONG or go HOME.
Traders from Equity Sense will be writing on this blog on positions and other market-related things.