Todd Horwitz Chief Strategist BubbaTrading.com
Be Prepared not Surprised.
After a brief pause a few weeks ago the Dow and S+P have made all time new highs while the Nasdaq is closing in, The Russell which has once again become the laggard looks primed and ready to join the party.
The cheap money continues to fuel the markets which has been driven by the minority on light volume. The sellers have stepped away letting the bulls have their way. The only real worry in these markets are the Bond markets who continue to insist that rates are too low.
Although the FED refuses to acknowledge that inflation exists their continued expansion of the money supply keeps the buyers flowing and the money cheap. There will be a point and time when markets recognize the underlying issues including record margin debt.
The options markets remain bullish in fact this may be the most positive they have been since the bull market began a year ago. 4 of the top 5 strategies are bullish with long calls taking the top spot for the 20th week in a row.
The top five bullish symbols are all tech AAPL, SQ, QQQ, TSLA and MSFT obviously relayed in the big move in the Nasdaq. Bears have moved back to TLT, SPX, XLU, CVX and FXI showing us the risk on environment.
Adding in a falling VIX and it’s apparently the Bulls are the strong hands, and the rally should continue to roll. However, there is a saying that “complacency is the architecture of our downfall”. For now, it looks like we rally on.
Todd “Bubba” Horwitz