I don’t expect much movement over the next two days as traders are now shifting into a holding pattern in anticipation of the Jackson Hole meeting this coming Friday. Both Janet Yellen and Mario Draghi are scheduled to deliver speeches that day, which could potentially roil markets on both sides of the Atlantic. Of course beyond a momentary excuse for spiking volatility nobody really cares about what Yellen has to say anymore at this point, as she’s basically turned into the central banker equivalent of your problem tenant repeatedly promising to drop by that overdue rent check but never actually doing it.
I wish it wasn’t so but every single campaign I am currently holding or considering as an entry is tied to the greenback, at least to some extent. This unfortunately is the state of affairs in the age of perpetual quantitive easing, which over the past decade has become the primary purveyor of perceived growth and the number one determinant of market direction. Cut off the easy money injections and down goes the market, simple. Everyone knows it and the longer this drags out the more violent the patient is expected to respond when finally forced to face cold turkey.
It seems like we were subjected to an enforced trading diet late Friday, and apparently it’s working since as you can see my abs are starting to show. By the way, sorry if you just lost your breakfast. Obviously this isn’t a big surprise to anyone as fast drops/advances *ahead of medium or long term inflection points* usually are quickly followed by a shake out. Pay attention now as this is important: Especially on the sell side the dynamics shift considerably once those inflection points have been breached, as violent selling usually tapers out more slowly before a bounce.
I can’t believe it’s Friday already, this year seems to be passing by me like a flash and there never seem to be enough hours in the day. Burning the candle on both ends doesn’t really help matters either as it only leads to less productivity afterward. Perhaps if all that science fiction one day turns into science fact and we get to live another 50 or 100 years then I may just be able to complete all those projects and various studies I constantly seem to be immersed in. But at least years of hard work continues to pay off today. Let’s review where we are: