Trading the Indices on Fundamentals

[FXtrader8911]

It is to be noted that Buffett was a net seller of equities this past quarter. Buffett does not make many mistakes, so, the fact that he is sitting on over $100b cash tells me that he is in the camp that stocks are overvalued, the fact that he was a net seller tells me that he does not think that prices will rise much more and in fact, are likely to ease, so profit-taking is in order. Of cause, Buffett is old-school, making decisions on fundamentals, he does not account for sentiment which is currently higher than it should be, making timing the markets very difficult.

The Buffett indicator (S&P500 v. GDP) is currently sitting at 204%, some 60% above previous peaks.

I remain net Short on US markets and net Long the Southern EU markets (MIB & IBEX)

 

[FXtrader8911]

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[FXtrader8911]

Friday's markets reaction to the bad jobs data was not expected, I guess markets took the data as a counter to the speculations that Fed's rates would go higher sooner than later (something that's been brewing due to bond prices and then magnified by Yellen's Thu comments)

Either Yellin is losing her marbles in pre-empting what the Fed might do, or, as has been speculated, the announcement was a test to see how sensitive markets are to a possible rate change. Yellin lovers think she can't ever err, my view is that she simply screwed up.

.

 

[Relentless]

Are you still net short U.S. markets?

 

[Overnight]

...Yellin lovers think she can't ever err, my view is that she simply screwed up.

.

She used to coo like a dove. When she tried to squawk like a hawk, she got burned and walked it all back.

 

[FXtrader8911]

Are you still net short U.S. markets?

Yes, for now. The NQ & Russell are not participating in the strong rallies of the DOW and S&P so overall I'm not yet in the red for the US and quite a bit in the black with the EU longs. Wait and see is the game for now as there is no justification I see for the DOW and S&P to sustain Friday's levels. The VIX level (particularly the month-out futures being 2½ full units over the current month) does indicate that the S&P should not be where it is. Don't follow me though, these markets are indeed unpredictable and logic often does not apply.

 

[Overnight]

...as there is no justification I see for the DOW and S&P to sustain Friday's levels. The VIX level (particularly the month-out futures being 2½ full units over the current month) does indicate that the S&P should not be where it is...

Oh pfffhhht! There was no justification for the NDX to start collapsing into a correction in February, but it did! And there was no justification for the markets to collapse for a day, the week before last when Biden mentioned his cap. gain. tax increase, but it did!

Forget using the VIX as a guidepost for the SP. That idea is as muddied as "sell in May and go away". The granularity is now lost at these lofty SP levels.

 

[FXtrader8911]

She used to coo like a dove. When she tried to squawk like a hawk, she got burned and walked it all back.

Isn't it dull without Trump tweets in the mix?

 

[Overnight]

Isn't it dull without Trump tweets in the mix?

Nope, we gots plenty of motion in the ocean without that assclown dropping markets 2% in 10 seconds after a Tweet because he hates Xi and CHYNA.

 

[FXtrader8911]

The granularity is now lost at these lofty SP levels

Well, you got the mindless dip buyers facilitated by RobbinHood and directed by the Reddit trade, then you got the fund managers compelled to play along but believe prices are rich so they buy insurance, the VIX still has relevance.