Push Back Day 2.0

And of course nothing is ever easy for us bears. We got one nice drop and of course it is followed by a retracement. Never mind that the bulltards had one green candle after the other for months now – we bears actually have to earn our living 😉

This is where we are right now: Yesterday’s drop off the plate looks like a picturesque third wave to me and I expected a sluggish annoying fourth wave today – and we got it. There’s plenty of room for retracement as the first wave should be called Mr. Stumpy but I would not want to see it go much past the 38.2% fib line – 50% max which is around 1,088 on the SPX. But looking at all indicators right now the trend seems up and the remains in positive territory. NYSE A/D ratio is reading around 0.86 – but it’s still early.

Interesting news from the POMO front – seems the Fed is slowly draining the swamp – not that they have a choice with about $3 Billion left in their POMO arsenal. Remember that one single POMO auction usually accepted well over $6 Billion on average. Yes, it must suck when you’re used to free money and suddenly the well runs dry. Who moved my cheese??

The longer term chart gives you an idea of the insane amount of cash that has been pumped into equity markets since early March. And now we are in double digit territory compared with nearly $500 Billion seven months ago. That’s some real money folks – and it’s why we find ourselves 62% higher since the March lows.