This market is enough to drive traders to drink
Well, you’d have thought so, but actually not so much.
Personally, I think that the world is ready for an alcohol-like drug which doesn’t cause all the health downside of alcohol. This might be what the future tastes like.
There is no clear direction to this market, although it’s a Monday so of course the Nasdaq is up.
Commodities are weak, bonds are up so my gut says we’re due for a down day in equities, in spite of the initial buoyancy.
Mind of Wall Street
I’m reading this book.
It’s an enjoyable fast read.
There is still a chunk left to read, but the main takeaway I have is that the conventional wisdom is always wrong,
in the end, but it’s hard to stick to your views when the world thinks you’re wrong.
This site is good for seeing what hedge funds really think about high-flying stocks.
Mike Green of Logica Advisors has identified having a low-float and being part of a big index (ideally the SPX) as the source of momentum. Basically, trackers have to buy as investors move money flow into passive funds, so those with a low float get bid up beyond all fundamentals. $TSLA is not in the index, but it probably has the lowest free float of any stock.
At some point, maybe a long time from now, when the last discretionary fund has shuttered, passive funds will become net sellers. Once this happens, we will see this whole thing go into reverse.
There is a similar service in the UK.
Close
There is a meme on Twitter that if it’s a Monday then the Nasdaq will be green.
It seems to have worked for a bit, but I never took it seriously.
Well, it happened again tonight, just before the close.
It doesn’t seem possible that a single agency could manipulate such a liquid index,
but I cannot see any other explanation.
One thing a few people on Twitter noted was that VXN (the Nasdaq equivalent of the VIX) was up 4.75% vs the VIX being down 3.58%. Obviously, these are derived from expectations of future volatility, implied by option prices.
It may be nothing.
Certainly, the bears seem to be scraping the bottom of the barrel now, but it’s hard to see that there are any shorts left to squeeze.
Bonds are very slightly down (yields up), as you’d expect from a risk on day. DX was flat.
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