What Are They Thinking?

Well the market is closing today without substantial change again, having been brought back one more time, most likely by the HFT boyz.

Of course, they have been ably assisted in this mission by the dip buyers, and by the absence of any real selling. I have no idea what anyone sitting on a long position in this market is thinking.

The Fed most likely realizes that it has created a disaster with excessively low rates and is trying to correct the problem. In my opinion, it is likely to raise rates at the next meeting regardless of economic data flow between now and then. Any raise is likely to produce a re-pricing of markets.

Yes,  the economy is rolling over fast.  There’s nothing the Fed can do about that, and it probably knows that. All it can do is try to deflect the blame, which is why it will raise rates regardless of the economic data flow.

Yes, sentiment is bearish. But it has been excessively bullish all the way up the rally and the market went up regardless. Sentiment is over-rated as an indicator in my opinion in a market driven by central banks and algos. This market can go down despite bearish sentiment.

Yes, oil is still going up in price. Even today, and in the face of steadily rising inventories. $50 oil puts many of the shale producers back in business and I’m sure they are selling futures at these prices with both hands. The muppets will eventually figure this out, and stampede.

The bears will soon have their day.

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