You got it.*
From ZeroHedge:
Over the past few weeks we have been inundated with countless headlines declaring that this is the best start to the year for US stocks [since] 1998, the best start to the year for global stocks since 1991, the best start for BBB bonds since 1995, and so on. But today's Flow Show report from Bank of America's Michael Hartnett takes the prize: according to the bank's Chief Investment Officer, with commodities annualizing a price return of 84.8% YTD, better than 1973 which was the best year ever for commodities, and more importantly, global stocks are annualizing 67.9%, i.e., better than 1933 which - in the depths of the Great Depression - was the best year ever for stocks, it is shaping up as "the best year ever" for markets.
Another way of putting it: complacency and euphoria abound. Yet while it would only be logical to take profits amid this wholesale (buyback and short squeeze) stampede, Hartnett notes that it is still early to sell as BofA's "Bull & Bear Indicator" remains unchanged at 4.4. And while it remains a mystery who is buying - with equity funds suffering another $7.7BN in outflows in the latest week (more on this below) - according to BofA it is the latest re-emergence of "green shoots" that is boosting asset prices because consensus positioned for "secular stagnation" (via credit, EM debt & tech) not "cyclical recovery" (via stocks, Europe, financials). It is also the reason why most hedge funds have been trampled by the recent surge higher, which - adding insult to underinvested injury - has seen momentum names crushed....MORE
While the ZH piece goes on to say the liquidity tide is receding:
credit to remain bid, we see SPX >3000 driven by oil & banks, expect "top" in Q2, see secular deflation ghettos such as Eurozone as rent not own as long-term debasement relative to US continues (Chart 7); note EUR now disconnected from positive cyclical signals, such as rising oil prices.We are sticking by the S&P >3000 target we purloined from an obviously intoxicated Jeremy Grantham 2 1/2 years ago (Mr. G. has long-since wimped out) with no explanation for the highly uncharacteristic ebullience. By December we were thinking we'd see the big fat round number by the end of the first quarter '19 but it was not to be. Today's close 2894.72.
*January 20, 2019
Equities: Dear Santa,
I'm done playing with the triple leveraged long ETFs you brought me and will put them away.
Regarding the options on the S&P e-mini futures: what is my tax basis on a gift?
Thanks Santa
Previously:
Dec. 26
Equities: Thank You Santa
I received the options on the S&P futures and I have to say, earlier this morning I thought XXL was far too bigDec. 20
And on top of that I was a bit nervous about having gone public with December 20's Hulbert: "Santa Claus is coming to Wall Street — after Christmas", reiterated as the first sentence in Dec. 23's Equities: "Nothing Goes to Hell in a Straight Line, Not Even Stocks".
If you hadn't come through all those young people on the internet might have lost faith and stopped believing,
But you delivered Santa, you did!
Right down to the minute!....
Hulbert: "Santa Claus is coming to Wall Street — after Christmas"
This piece was published ~45 hours—i.e. ~1000 DJIA points—ago. Some say Santa has left the building or, even worse, that there is no Santa but that question was answered, in the affirmative, by the New York Sun long ago (1897):
DEAR EDITOR: I am 8 years old.And here to answer the question once again is Mark Hulbert at MarketWatch, Dec 18, 2018 5:18 p.m. ET.
Some of my little friends say there is no Santa Claus.
Papa says, ‘If you see it in THE SUN it’s so.’
Please tell me the truth; is there a Santa Claus?
VIRGINIA O’HANLON.
115 WEST NINETY-FIFTH STREET.
VIRGINIA, your little friends are wrong. They have been affected by the skepticism of a skeptical age. They do not believe except they see. They think that nothing can be which is not comprehensible by their little minds. All minds, Virginia, whether they be men’s or children’s, are little. In this great universe of ours man is a mere insect, an ant, in his intellect, as compared with the boundless world about him, as measured by the intelligence capable of grasping the whole of truth and knowledge.
Yes, VIRGINIA, there is a Santa Claus. He exists as certainly as love and generosity and devotion exist, and you know that they abound and give to your life its highest beauty and joy. Alas! how dreary would be the world if there were no Santa Claus. It would be as dreary as if there were no VIRGINIAS. There would be no childlike faith then, no poetry, no romance to make tolerable this existence. We should have no enjoyment, except in sense and sight. The eternal light with which childhood fills the world would be extinguished....MORE
While calendar-based trades are usually bunk, at this time of year it's good to reflect on the true meaning of Christmas.
Santa will be a little late with presents for stock investors...
***
...Virginia, the DJIA may be down 453.22 (-1.94%) at 22,870.44 but Santa is
coming, so ask him for some OTM calls on the ES. Or get your name on
some triple leveraged long ETFs. He's on his way.And I will drop Mr. Hulbert a line re: the 1914 shutdown and reopening and remind him he knows the details and could have taken another paragraph to explain index construction.
Well, as we all know the major indices continued lower right up until the Christmas Eve early close, the DJIA's intra-day low that session was 21,792.20 but come Boxing Day: Hooray!
And now a break in the action.
January 23, 2019
IBD: "Dow Jones Rises 3,100 Points From Dec. 26 Low; 6 Top Stocks Break Out"
