Yes those pesky supply chain interruptions that were caused by the Japanese earthquake/tsunami/Nuclear disaster are beginning to go away and the consumer confidence is coming back so everything is grand in the ole US of A. Yes traders cheered for the Chicago PMI this morning, shrugging off the unemployment numbers that are still horrendous. Though none of this is a surprise to some, since there is still quite a bit of cheap money floating around :
As Robert Wenzel puts it:
Here's what happen after the first of the year with non-seasonal 13 week annualized money supply:
May + 6.0%
"I am not, yet, a full out bull here because the money supply numbers are jumping around, but only economists not following money supply would simply forecast a continued downward trend."
So everything is going swimmingly and looking at Zerohedge just now there is an article describing "Irrational Exuberance is back". I am not sure when the equity markets are going to take a dump, but sometime in the near future they will. (6 months-3 years?) I'm thinking of shorting every rally in hopes for the homerun. This can't continue.
I've been watching the VIX. I think once we get into the 15's it would be a good time to load up some more shorts.
The casino just has to run it self out. It's not sustainable and will not end well. When? I suppose when every last penny is extracted and Blankfein has his 5th mansion on Nantucket.
so the only things I can still see derailing the stock market are:
1) earnings getting hit. I think this is entirely possible, even likely, but I don't have a team of researchers to confirm it, I am just betting that things can't be great out there, you know the story, unemployment, higher input costs, consumer debt, housing market, etc etc
2) Interest rates really moving up now that QE2 is done. Also quite possible, but again I am not sure. Long term it's a sure thing, but yeah, maybe it's 2 or 3 years away? WTFK?
So I am staying out completely for now. Might try to short a little bit via SDS, but no way am I stepping in front of this train just yet.