Friday, 27 February 2015

Is nothing priced in anymore?

The rampant up moves in Equities beggars the question whether any news is priced in anymore. In the past month, with markets and Stocks being at all time highs, any news that's slightly positive is met with the type of buying you would expect when stocks are at lows. You would have thought the DAX move from 9600 to 11200 would be pricing in something, but German acceptance of the Greek bailout extension for example propels the market up like there is no tomorrow and without sucking out all the volatility in this market. You know things are bad when the markets rally close to all time highs today on the back of a rumor denial of a Greek Bank running out of cash. I mean there was no real sell off on the rumor in the first place, which just shows the Algos wired into trade headlines are pushing this thin markets to more stretched valuations on a daily basis.

The words sluggish, tough, tepid are the words of choice for this market to continue its march higher. As long as the market remains this way rates will stay low and that's all it takes. A massive miss in Chicago PMI data, briefly lead to a dip in this market, for it then to rally all the way back up, because it was probably a buy the dip opportunity. There is no such things as fundamentals mattering to this market any more, its just demand and supply. Too much cash and no where else for it to go. Eventually there has to be some kind of re balance and when that will be who knows, but when it does happen, its going to be a wild ride.

1 comment:

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