Who Cares About Indifference?
What if you threw a party and no one showed up?
Editor's Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next discussion with that very intent.
Does the market's relative indifference to today's action represent:
1) Manipulation (plunge protection)
2) Strength of the market
3) Underrepresentation of risk
4) All of the above
First of all, Scott Reamer's work shows this to be extremely corrective, a psychological reaction. He expects the market to turn down from around these levels.
I certainly think the Fed has been active one way or another today, reinforcing the reaction to buy dips.
The strength of the market is high if you attribute it to liquidity and low if you attribute it to fundamentals.
And of course, I think the market is way off on risk.
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