Loading ...I have tried twice to short the S&P 500 since the lows in late-December taking small losses in January and a very small profit mid-March when it lost almost 100 points from the first assault on 2,800. Now we are comfortably above 2,900 and within 1.13% of all-time highs as macro-economic risks have been ignored as investors correctly EMBRACE, rather than FIGHT, the Fed and the tape. In early January, I was ruminating over the obscenity of the Fed and Treasury Department interference so blatant in late December and early January when I typed: “However, as I debate the notion of a V-shaped bottom for stocks leading to new highs in 2019, I am mindful of the results of the results of the Santa Claus rally and the First Five Trading Days rule which would suggest that 2019 has a 70-80% chance of being an “up” year.” Would that I could have listened to my own advice by going outright long instead of awaiting the now-archaic “re-test” which can only occur in free markets, not the abominations with which we must contend today. We are so very close to all-time highs with the interventions so powerful that it is a near certainty that 2,940 will soon be in the rearview mirror. I will refrain from joining the crowd of euphoria and avoid long positions but I will be looking to establish shorts in the event that the champagne corks are popping in the next two weeks. For the gold sector, the danger lies in the disappearance of “The Fear Trade” and with the seasonally-dormant “Love Trade” (Indian wedding season and Italian jewellery trade) purchases months away, the precious metals are vulnerable to irrelevancy, no surprise given the hostility of the interventionalists and the fickleness of cannabis and crypto zealots.
MJB