Are the suckers flocking to a new asset bubble in stocks...?
Perhaps... But there is another more elegant explanation that does not require mania thinking to make it work...
Consider:
Everyone "knew" that after Sucker Season ended this week...and all the 401k and retirement money was "in play"... the market would decline... It always does...!
Apparently, a lot of "semi-smart" money was shorting this final Sucker Rally in hopes of covering in late April or early May for a profit on the short side...
Enter the "really-smart" money...which essentially is squeezing the semi-smart shorts in hopes of forcing them to cover their positions....
...BEFORE THE REAL DECLINE BEGINS..AFTER MID MAY...!
MY HUNCH IS THAT THE RECENT MEGA-RALLY; AFTER THE END OF SUCKER SEASON WAS AN ATTEMPT TO SQUEEZE THOSE WHO WERE SHORTING THE MARKET DURING THE TRADITIONAL RUN UP IN THE FIRST HALF OF THE YEAR.
LIKELY, THE MARKET MASTERS ARE BEHIND THIS MOVE...BECAUSE THEY LOVE TO TORTURE "LINEAR THINKERS" AND "MACRO THINKERS" LIKE YOU FIND RUNNING MANY HEDGE FUNDS... LOOK WHAT THEY DID TO THESE "SMART" PEOPLE LAST YEAR IN GOLD...!
In Any Event...
Once the weaker speculative shorts have been nicely squeezed...and the retail suckers are all in on the long side!!
THE REAL PLUNGE WILL START...AND IT COULD BE A GOOD ONE...
NO WEAK SHORTS TO COVER AND SUPPORT THE MARKET...
AND NO RETAIL LONGS WHO ALREADY BOUGHT IN AT NEAR THE TOP!!
ELEGANT! TOTALLY ELEGANT...!
REMEMBER THE STREET SPECIALIZES IN "CREATING SCENARIOS" THAT SEEM INEVITABLE .....BOTH LONG AND SHORT....
THESE RECENT MEGA RALLIES ABOUT BASICALLY NOTHING ARE A SHORT SQUEEZE ....
AND IT MIGHT LAST A LITTLE LONGER...PERHAPS UNTIL MAY 15th...
BUT IT SURELY WILL BE OVER BY THE END OF MAY...
THEN? ....THE DELUGE!
NO ONE TO BUYLONG! AND NO SHORTS TO FORCE TO COVER...
THE PERFECT STORM...!
P.S. And of course remember you heard it here first...
The beauty of this scenario is that it doesn't require the FED to "go insane" on inflation...
And better, it provides a micro, not a macro, explanation of recent events...which is always the good choice on Wall Street; which has devolved into a "trading" market...not an "investing" market...
