Trading the Indices on Fundamentals

If traders needed confirmation of how irrational markets can be, today is a good example. Powell Spoke sending Mixed Messages, however, players sent markets to new ATH.

Powell predicted no end to rising inflation yet confirmed a rate cut(s) at some point this year. My read on what Powell said is that the economy and growth are at risk which should be negative for markets but instead, a Strong Rally to ATH was initiated. However, Gold also rallied, indicating that some players got the hidden message and were hedging their buying frenzy.

 
Interesting movements in the US markets over the last 2 months with players going from predicting 5 rate cuts this year pushing the Indecies to new ATH (Exp the Russell) to accepting that only one, if at all, will happen. All US Markets are above the 200 DMA but below their ATH.

Across the Atlantic things ere different, the EU Indecies have been hitting new ATH almost daily. FTSE, DAX and CAC have hit a new ATH again on Friday.

If all major indices are averaged, Friday reached a 2024 high at 7.64% above the 2023 closing.

The Buffett indicator reached 185.5% on Friday, the highest it has been in 2024 indicating that the US Markets are overvalued.

I was a heavy buyer of US markets in mid April, ½ of these positions were closed off on Friday while another ¼ were hedged with Shorts as I'm anticipating a mild sell-off before a renewed surge by month's end. On balance, I am Long in the US, neutral in the EU and zero in the NIK225 but with some NIK225 buy orders below the 35,000 200DMA which could be reached with intervention assistance from the BOJ.
 
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