Question the Unquestioned

Pay attention

No one questioned Bernie Madoff until he couldn’t return their money. We often don’t question things when things seem good. Recently markets have semi-stabilized and seem to be moving up, yet Microsoft guided lower for the coming year. Teslas earnings seemed good but weak margins may be something to consider going forward. The unemployment rate is at 3 1/2%. Yet nobody question’s the fact that the labor pool is 63% of what it used to be. Wages continue to go higher because corporations and small businesses have to entice the small labor pole to come to work. This is called wage inflation.

We don’t question why the stock market continues to go up until it goes down dramatic fashion.

Recently I’ve spoken about zero days to expiration options and how they are suppressing volatility and propping up markets. Yesterday was another epic day on the SMP call options. The volume was north of 400,000. This is a sizable amount of money being pushed into these option contracts. Even though Microsoft guided down the night before markets rebounded, including the QQQ into the close.

-Source: Hedgeye.com

Question. Can markets continue to move higher even though the fundamentals are crashing and if so, for how long?

Live Loud!

Trent

P.S. Google laid off another 1800 California employees. Does that matter?

Disclaimer

This is not advise or a recommendation.