I don’t understand any of this. Looks like maybe he says the 3rd quarter could be ugly? Care to explain for a clueless person?
I mean calling exact timing is fool's errand. Not to mention, 3Q starts in three weeks so could be then or in September. I probably should have provided some background but didn't want to just regurgitate it. I mean, at the end of the day, you can always find indicators that point to buying or selling. Heck, people can look at the same indicator and call it bearish or bullish.
Full disclosure, I've been bearish on the way up. Didn't like the rally at 2,750, liked it less at 3,000 and obviously don't like it now. While the market is forward looking, it's just been awfully optimistic. Obviously that has been rewarded. But the main reason I posted that is that a lot of folks try to use that it's the most hated rally ever, there is a ton of money on the sidelines (via hedge funds and CTAs) with their net short positions in the futures indicate this could run a lot further as those funds will have to close out shorts and go long. You essentially need to start finding incremental buyers to keep it going higher.
So my big takeaway is just that some of the gasoline that people point out to to keep things going may not be as great as people think. If and when some of these long/short HFs turn bullish, it's unlikely they'll be able to carry the market that much higher. The put/call ratio is one of those that people can use to justify either position but I usually look at it as a contra-indicator. Essentially a put/call ratio below 1 means that people are buying more calls than puts. That means people are bullish and that is helping to carry the market higher but at least at extreme levels, it points to irrational exuberance. It means that people are getting complacent with this market and that people think the market will go higher so are likely fully invested. So if selling starts happening, you may not have a lot of money to buy the dip.
Like I said, you can probably find indicators that point to new ATHs. And that article doesn't necessarily dispute that. I think it just highlights that folks are actually invested in this market a lot more than people have said. I think on top of what that article stated, you're seeing '99 level irrationality driven by retail folks. How long can that last? Your guess is as good as mine. If you want to trade it and make money on a bankrupt Hertz? You can probably make some money. But if you're investing long-term, I'd just be cautious. I wouldn't be throwing a ton of money into this market right now and if you wanted to pare down your risk, assuming you've either ridden back the market or maybe invested at the bottom, I think that is prudent. Market irrationality can exist a long time and you're starting to see that with behavior in here or tweets like this (
https://twitter.com/stoolpresidente/status/1269706445299335171). In my experience, the people who do well in the long-term aren't worried about picking up pennies in front of steamroller or chasing markets like this. Stick to the game-plan. Don't take money out of your house or put any savings you may need into the market thinking it'll double or triple because you saw someone do that last month.
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Total NW, which had dropped almost $200k as of early April. The climb back has been pleasant.
