(The Danish summer this morning!!!!!! - feels like gr8 analogy to markets)
Back from Tour De France - thkx to my friend Kevin Connors( & Alex) for hosting me for a gr8 week-end in Verbier. I tip my hat - again - to the TdF riders... they are some of the greatest atlethes around and most of them perfect Gentlemans to....and Verbier remains one of the coolest places to hang out.... period!
In the markets I have been losing, losing and then losing some more - all I got left is small optionality and the frustrated trader in me......
The more I think about this market, the more "untradeable" it becomes - take this link:
So... there are simply less stocks to short - obvisiously major part of this "drift higher" in stocks, one would argue the pension funds are serving self-interest, but long term they are merely helping bidding up stocks to unrealistic valuations based on "scarcity" of short base.....making the whole valuation "articificial" and increasing the event risk when the "mini Ponzi" scheme breaks down.
The trend of the market becoming more and more driven by technical factors, rather than valuation metrics, is one major concern for me as macro manager, although I trade high frequency and hence have better flexibility.
Short- and long-term managers have to "adapt" to political non-sense and crazy central bankers trying to "buy even more time" - where it in early July looked like the 5th leg (down) had started, we are now back to the neutral zone of 950-1050, which still remains my "Maximum valuation" range considering the odds of higher unemployment, output gap and lack on "real credit"
This macro guy is going to wait out balance of July for more signs - but I remains extremely sceptical on this market, as nothing seems to happen except market going up 5 pbs every day.....
so.... it's back to the hammock for me, althoug the weather here in "Summerland" is dire........
Macro program: Down 150 bps for YTD (Since Mid-June)