investmentresearchdynamics.com / Dave Kranzler / Feb 1, 2016
Toward the end of last week, when the S&P jumped 58 points (3%) for the week, 46 on Friday alone. The negative interest rate announcement by the Bank of Japan triggered the move on Friday. Earlier in the week the bottom-callers in oil were on their megaphone proclaiming a new bull market in oil, which got the stock market permabull drones all giddy. The trading action last week was entirely characteristic of a typical bear market short-squeeze rally fueled by momentum-chasing hedge funds and daytraders who had piled into the short side of the market as they chased momentum lower.
Typically these bear market counter-trend rallies are short-lived and are followed by sell-offs to new bear market lows.
I was quite dismayed by all of the stock market bottom-callers who jumped out of hiding to announce that the stock market “water” was warm and that it’s safe to jump in. Several of these mentally challenged mutual fund manager drones were on bubblevision Friday. These guys are either complete morons or ethically challenged. If it’s the latter case, then they are breaching their fiduciary duty by encouraging the public to put more money in their funds.
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