Considering the broad averages are trading near all-time highs, they are still managing to look like hell. Short-covering is the only source of buying power strong enough to push stocks above last week’s record peaks, but there was precious little of it for DaBoyz to milk yesterday. The E-Mini S&Ps, for one, stalled at a middling midpoint Hidden Pivot, but its ‘sibling’ 14 points above — equivalent to a 100-point rally in the Dow — remains viable.
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All bears are either in hibernation or been dropped off at a local taxidermist. With such a situation the years of blind bullishness of buy every dip will not produce the violent upmoves in the past as the now extinct bears would cover.
And thus when there is a decline in the near future there will be less of the cushioning factor of shorts covering as everyone tries to exit at the same time. Has not happened in the last three years and with every passing day the day of reckoning grows its potential energy. It will most likely come when the market finally realizes that the central banker cabal have no answer to solve a black swan event.
It’s hard to get blood out of a negative bond yield. If the bankers could they would have put the rate there years ago and kept them there.
But the accidents of currency devaluation by each and every bank thinking that inflation and piling on more debt is the only way to “work” your way out of debt. But this has led to nothing but borrowing even further into the future instead of dealing with the problems here and now.
The shadows are growing long as the sun sets. When it finally sets, suddenly everyone will realize that the central bankers all along have been whistling past a graveyard hoping that nothing scary jumps out of nowhere.
There has to be some less than obvious reason for keeping prices at these levels and with such low volatility. Are they waiting for a certain date to pass? Are they trying to draw even more pension money into equities? Do they believe that if they keep prices relatively range bound long enough time will eventually catch up to price? There’s something occurring that’s being omitted from general discussion in the media and/or by agents of government and/or the exchanges.