Lance Jepsen's  Instablog

Lance Jepsen
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I have been trading in the markets since the 90's. I'm the owner of the stock trading blog and the StockTradingMaster channel on YouTube. I've transitioned, like most, from a longer term buy and hold strategy to a shorter term swing trading strategy. I like trading in... More
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  • US Economy To Strengthen Rest Of Year - I Call BS! 0 comments
    Mar 29, 2014 8:41 PM

    Institutional traders and money managers are going all over the mainstream financial media talking about how the economy is going to improve for the rest of 2014.

    The Federal Reserve said the same thing, after all, that is why they are tapering... isn't it?

    There are two big problems I have with the endless looping, "economy will strengthen next quarter" logic. In fact, I call BS.

    The first problem is the money, as in follow the money. It's always more important to track what institutional traders and money managers are doing with clients money rather than to listen to what they are actually saying. If you follow the money, you'll see how institutional selling was detected for the first time in 2014, on March 24th, 2014 using the TICK. Follow my logic here. If institutional traders and money managers really believed that the economy was going to power-strong higher because it's been like a coiled spring pushed down by unseasonably cold weather, then why aren't these same institutional traders and money managers buying with both hands? Instead, they are selling as evidenced by the TICK last week!

    It gets even worse when you consider than the S&P 500 closed the week on March 28th, 2014 at around 1857. That's almost the same level that it was at on January 1st 2014! The market has gone no where over the last 4 months.

    If money managers and hedge funds really believed that things were going to get rocking-awesome for the economy once the winter weather was over, then why haven't we seen institutional traders and money managers buying like crazy since January 1st 2014?

    The second problem I have with the "economy will get stronger over next few quarters" logic is that it suggests to the lay-person that they should buy stocks now. This is the time of year that it is very dangerous to buy stocks. April is the last month of the best 6 months of the year. In fact, many traders play the "sell in May and go away" sell-off early because they don't want to rush for the exit all at the same time.

    In this weekend's show, I look at a lot of charts and show you why I think the Bears actually control the market right now and why the Employment Situation report next Friday is so important. I also show you the institutional trader selling that took place on the TICK last Monday, March 24th 2014.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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