Greeting from our nation’s capital. Yes, Bear Force One and Air Force One are parked side-by-side, as I engage in a final whirlwind trip, this one measuring only thirty hours. All will be back to normal Tuesday morning, and Duke and I look forward to that.
Over the course of the evening, equities have softened, although by a very disappointing amount considering all the renewed Let’s Get China saber-rattling. (I would also note I am composing this little piece three hours before the opening bell, so don’t throw your wireless mouse at me if your chart looks different).
Over the course of the past week, equities slowly worked their way higher, completing their rise with the “international trade court” spike, then went on to unwind all those gains. Here is the /ES over the past seven trading days:
Even so, sentiment is doe-eyed, giddy, and exuberant.
Just one small chunk of the permabull site Zerohedge reveals, in short succession, one article about how reasonable equity valuations are, another about how Goldman Sachs (their lord and master) believes tech stocks will soar this summer, and yet another casually mentioning gross leverage at the 99th percentile, positioning that as a good thing. (If positioning was even partly in the other direction, believe me, they would treat it as a massive contra-indicator).
Suffice it to say that bulls are absolutely blind to any and all risks at this point.
Over the weekend, there has certainly been a ramping-up of geopolitical risk, which gold is celebrating. Here we sit a short-term inverted head and shoulders pattern, suggesting gold has a completely real chance of pushing to lifetime highs in the near future. Go, gold, go!
Sadly, crude oil is also spiking, but for different reasons. OPEC+ announced another boost in production, which I naively took as good news for my energy shorts, but evidently the market assumed the boost would be even bigger, so there’s a big 4% relief rally going on right now.
Due to my bearish energy plays, this could easily wind up as one of those days in which the equity indexes drop but I still wind up losing! We shall see.
Today will be the last “choppy” day for me, as I awkwardly balance Slope obligations with Other obligations. As I mentioned earlier, however, following my return home at 1 in the morning (!!!) I’ll be ready to get back to my beloved rut (not $RUT, but rut) at the opening bell.
