Trade Desk Client Note
Global Futures Review
Quote of the Week: “Ahhhh, poor thing. You still own stocks?”
No wonder the US equity rally could not sustain itself on the strength of a $5bn purchase of Bank of America shares by Warren Buffet. Stock market moves are smoke and mirrors ahead of the single most anticipated speech yet from Ben Bernanke at Jackson Hole on Friday.
There are no long-sided equity participants of note, and when compared to downside volume rallies the upside pushes are anemic. As August started we warned those who were not akin to shorting stocks to get to cash, and that mandate still holds.
We noted that equities would struggle to rise unless XLF, the financial ETF, closed a week above 13.50. It failed to break again today. Fundamental opinions alone are not holding water at this time, and technical reviews are changing in-line with breaking news.
The markets are not broken; the markets are reflecting a broken 3-year economic trial that failed to produce growth. The normal pattern of trade has no room for long-term investors, unless they are prepared to sit out some sickening ups and downs.
Short-term outlooks, near-term targets, making use of cash, and controlling exposure and risk are dominating proceedings. We have issued signals on gold and silver, and outside of those two plays are quite content to grab a chair, a cup of tea, and watch.