What is obvious is obviously wrong is one of my favorite sayings in the markets. Contrarianism as a foundation for speculation, just like everything else, is subject to a changing of the locks just when an investor or trader thinks they have in their possession a master key.
It's important to realize that when everybody is suddenly right about a scenario and the market agrees with the majority, powerful moves will occur in favor of consensus opinion.
We are very obviously being pelted by trade news with China on a near hourly basis as the situation remains extremely fluid. Nearly everyone is concerned about the outcome of the trade negotiations. Nearly everyone has taken some sort of precaution with respect to the negotiations, whether in the form of raising cash, hedging or being net short. Simple because everyone is prepared for the worst case scenario doesn't necessarily mean that market won't react negatively if it comes to pass.
I posted last night about the absurd symmetry being demonstrated by the market on the bearish side of things. It's the same kind of technical symmetry that the market was demonstrating at the market bottom in December, only in the opposite direction at present.
This type of symmetry when being met by fundamental information confirming the direction of the reaction is rarely coincidental. Leading me to believe that, at a minimum, a defensive stance is warranted through the summer. At maximum, a net short or 100% cash position can be justified.
The markets may just be worth avoiding until the September to October time period, with the exception of select opportunities.
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