Deception Is All They Have Left

Sunday, March 17, 2019
By Paul Martin

by Sven Henrich via NorthmanTrader.com,
ZeroHedge.com
Sun, 03/17/2019

We’re back in the phase of markets where bears look like idiots and bulls look like geniuses. In 2018, following the US tax cuts, a growing economy and expanding earnings had bears look the fools as markets moved on to record high after record high. By September and October bears had thrown in the towel so relentless was the constant drift higher amid shrinking volumes, dying volatility and uniform bullish consensus. It was a very deceptive environment as divergences and negative signals were ignored and markets ended up dropping 20% into December.

Now, ironically, it’s a slowing economy and slowing earnings, the very thing bears had predicted last year, that has bears on the ropes again. Why? Because it’s not the economy stupid. It’s liquidity. The oversold rally emerging from the depths of the December carnage has morphed into a liquidity bonanza as record buybacks are flushing relentlessly through the system and central banks have flip flopped on their previous policy stances. With algos latching onto any tweet or newsflash promising a coming recovery from the current slowing growth environment (think China deal) the liquidity machine has once again set markets on a relentless path of magic levitation accentuated by overnight gaps and market open ramps, tight intra-day ranges and magic risk free Fridays:

The Rest…HERE

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