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I did a twitter poll yesterday asking three separate questions.
- Do you think the fed’s new QE is one of the main factors of the current push up?
- Are the next 30 handles up or down?
- Are you bullish or bearish?
82% polled said yes the new QE was behind the current push up to new highs. 55% said the next 30 handles are up and 45% said down and 60% (not much there) and 60% said they were bullish and 40% said they were bearish (kind of hard to believe). While some of this may be benign I think the polls speak for themselves. That said I think the outcome is pretty much what I expected. The markets are fully back up by the feds printing presses, so far the fed has added $360 billion in new liquidity and as of yesterday the fed went from $60 billion a day to $120 billion a day and plan on adding another $356 billion from now till the end of January.
When the PitBull called me yesterday he asked me two questions. The first was what I thought and I told him the trend is your friend and don’t fight the fed. And the other thing he asked was what levels and I told him 3194, 3204 and 3220.
As most of you know I have been very bullish and the beginning of the year call was for ES 3200 and now I am thinking the ES could be heading to 3250 to 3270.. By year’s end! I know that many of the ‘market timers’ are saying the ES will not go up as much next year and I agree but as long as the fed ‘s printing money there is no way S&P is going down.
Our view, The ES has rallied over 4% in the last 45 sessions and as much as I think higher I think the next 25 to 30 handles is going to be down. In most cases, an average pull back from a new high is 40 handles. The other odd thing is over the last few days they have been pumping up the premium in the SPX, OEX and S&P options while the VIX traded under 12. I do not know what that’s about but it’s not a good sign. Our lean is to sell the rally with tight stops.
DBoy
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