After the long weekend with the markets closed as we honored those who have fallen while serving the United States in the armed forces, we return to trading today. Things this week look very familiar.
The melt up is accelerating and with the momentum tailwind back, newsflow is once again irrelevant: any news that is even remotely good is trumpeted, and any bad news - such as Europe's right storm rising in the northern states, and left storm surge in the states that demand more handouts from the northern states or China sinking a Vietnamese boat, the most serious bilateral incident since 2007 - are once again (and as usual) nothing more than a catalyst for hope for even more liquidity injections. End result: the S&P futures this morning are 5 points above Goldman's year end target of 1900 and 45 points away from its June 30, 2015 target. Can this breakneck scramble on zero volume continue until Grantham's bubble peak level of 2,200 is hit? Well of course: after all anything goes in the centrally-planned new normal.
We have a relatively quiet day ahead as market participants in the UK and US return to their desks. The ECB's policy forum continues in Lisbon today so expect some headlines. US durable goods orders, Consumer Confidence and Case-Shiller home prices are the main events on the data calendar. Our own DB Global Financial Services Investor Conference kicks off today in NY where there will be a number of Bank and Financials CEOs speaking. EU leaders meet in Brussels to begin talks to choose a next European Commission president. In the EM world, we have the Hungarian rate decision and South African GDP on today's calendar.
Basically, the more things are different, the more they remain the same.
The major averages finished in the green Friday, capping off a week of choppy trading. Seeing how buyers were looking to hold through the holiday weekend. It can signal a bullish open to this week's trading. With trading volume remaining light, it will be interesting to see if we are getting into the summer doldrums. I can see the markets remaining range bound, with the occasional all time high being tossed in for fun.
Being a retail trader can be very different than being a professional trader/market maker. The biggest difference...commissions. A professional trader can trad virtually for free where a retail trader can expect 20% or more of their profits to go towards fees and commissions. We have to keep this fact in mind when generating our signals. Sometimes it does make sense for us to adjust an existing position though.
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