Now Everyone’s A Bull

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Market On Open, Tuesday 14 April

by Alex King, CEO, Cestrian Capital Research, Inc.

The Nasdaq is looking towards all-time highs once more, and yet software is on the floor. Approximately 18-20% of the $QQQ is software, so in the event this most hated of assets bottoms out or, heaven forbid, start moving up, then there are going to be a lot of people sat out of the market shaking their heads and rushing to get back in. As noted in recent days, there is nothing in the real economy at present to justify why markets should be proving so resilient. I can only conclude that we have liquidity provision taking place beneath the hood, meaning that large price-setting accounts have more and cheaper and less regulated capital available to deploy into risk assets than they did a month back. All you can do in these environments - any market environment in fact - is go with the flow. Prices up, be long but don’t lose your head and think it’s permanent. Prices down, be in cash or short but don’t lose your head and thing it’s permanent. Sideways, go and find an asset that is actually moving up or down, unless you are very skilled at selling options (on which more in a couple weeks I hope).

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Alright. Let’s take a look at markets at the open.