Wednesday, May 18, 2016

Bots are extra bullish now

My S&P 500 market bots have become even more optimistic about the U.S. stock market's prospects for the next few months.  The Internal Price Forces number has risen to 7.9, which is fully bullish. When the bots are this bullish, only a pre-crash signal a la 1929 or 1987 can make them switch to a bearish stance. 

Despite the bots I remain in my bullish-foreign-stocks/short-U.S.-stocks stance.  The Federal Reserve Bank has been the driver of the U.S. stock market since 2009, and that's not going to change any time soon.  Presently the Fed has taken a pause in the money printing and that leaves the market vulnerable.  When the Fed resumes printing (and it will resume printing) the market will start climbing again and the bots will be proven right, but for the wrong reasons.

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