DaBoyz milked the impending trade deal for all it was worth last week, squeezing shorts relentlessly until they evidently exhausted themselves on Friday before dawn. I can’t recall a more enticing instance of ‘buy the rumor, sell the news’. The trouble is, both rumor and news have exhibited manic bipolarity on a weekly basis, to the point where the usual idiots who have fixated on Trump’s tweets and nothing else have turned the stock market even more psychotic than usual.
Still, there is little reason to doubt that the ratcheting short squeeze begun a week ago will sputter out somewhere shy of July’s highs, since the U.S. economy, if not yet the widespread perception of it, is moving toward a recessionary tipping point. An opportunity to leverage an autumn crash would appear to be nigh, even if Mr. Market is not making it easy for us. The mere fact that it looks like such a juicy bet implies that an unpleasant surprise may yet lie ahead for righteous bears.