Posts by "fisherking61"

VOTE:$1,080-1,150

The pent-up energy from 18 months of consolidation below 1000 is still there, so 1200 is a matter of when rather than if. At the same time, the trade is definitely crowded and considerably above 200MA and the psychological 1000 supports and still under the Damocle's sword of a possible countertrend rally in USD. The main obstacle to 1200 and above before year-end is how soon and how fast a correction will come, in my view the sooner and the harder, the better. I feel for the hundreds of rationalizations that bears keep on feeding nonstop to justify their view that we are in a bubble and a devastating correction is imminent. Mean-reversion thinking is an extremely dangerous sport in strong trends - even more so in totally uncharted territory - such as the one that we are witnessing right now. The market owes explanations to no one!

VOTE:$1.37-1.45

Once market participants realize the gap between their perceptions (one of the fastest stock market recoveries ever) and actual economic reality (unemployment rising fast, individuals and companies cutting costs left right and centre, still fragile housing and financial system, energy ?), THEN the $ may finally have its day in the sun. But it may take a while, say as long as 2-3 months, before actual numbers deliver the stark message and clear the current second-derivative-type thinking. It is also legitimate to question how just one NFP number (I spare you all the BLS adjustment details) could legitimately trigger such a radical change of perspective on the Fed switching to tightening before the end of the year - one of the key drivers of the $ sudden recovery. There is still plenty of dry powder on the sidelines of stock markets to buy the dips another time and delay a major drop for a while. Possible dislocations on the downside (< 1.37) could be:
1) The $ continues to rally and triggers a massive wave of stops from CTAs and quant shops around 1.37ish. Such a massive move would be driven by technicals and flows rather than fundamentals.
2) Something going seriously awry this side of the Ocean, particularly some credit blow-up in Eastern Europe (a la Latvia)
3) The market finally awakening to geopolitical risk - particularly in the Middle East.