Feeling Manic?

We have been talking about how bullish the US stock market is.  It has been bullish uninterrupted for most of 2016 and that includes the Brexit buying opportunity.  We then expected and got a test of major support.  Now, with the Trump whipsaw and reversal we have the 2nd thrust in breadth and breakout, after Brexit.  Here’s the broad market view we keep tabs on.  It never went bearish.  All it did was test support across various indexes.


The thing is flat out bullish and as we noted in the NFTRH 422, is receiving what look like manic inputs, which should result in a blow off and fall out.  So risk is most assuredly rising along with stocks.  But I have been through enough major market events to think I can play this one.  So far so good.  I’ll just stand well away from the punch bowl this holiday season, which means a right-minded risk averse approach can take over at any time.

One of several groups we have been highlighting in NFTRH are the FANGs, which got clobbered on Trump fears.  I took GOOGL and FB, but the chart of AMZN has also looked good.  You can’t really tell by this weekly chart, but the gains have already been decent off the lows.  Well, about 4%.  I’ve preferred using the stuff that got clobbered on Trump as opposed to the stuff that ramped on Trump.

fb, amzn, nflx, googl

I plan to ride this little holiday mania as best that my conservative self can and then I look forward to a massive contrary play when this thing burns out.  Think about all the sons of Stan Druckenmiller out there.  He was a bear and gold bug right into this month’s changes and now he’s a mega bull looking through a political lens.  I wonder if some of those who couldn’t stand me writing bullish things about the Semis and cautious things on gold are thinking of following Druck now.  Some people want experts after all, in order to have someone to follow.

Well, Druck’s a billionaire and that makes him right I guess.  Everybody over to the Druck side of the boat because Trump’s gonna trickle down just like Reagan did.  Except Reagan inherited a lousy market, not one that has nearly tripled during the prior phase.

As NFTRH 422 concluded…

“I am thinking about what kind of power may have been unleashed by the market’s view of ‘liberation’ from the yoke of socialism that it perceives had been constraining things. One problem with that bias is this chart of the Dow showing what the market did during that socialist phase of constraint (green channel). An opportunity for a contrary play?”


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