I Told You I Ain't Got No Agua

Dip-buyers continue to operate under the assumption that the liquidity bonanza markets enjoyed since 2009--and then especially since March 2020--is still in full force despite The Fed's recent efforts to make it clear that is no longer the case. At times, they appear to be begging The Fed and massaging the data to infer a much-beloved "dovish pivot" is imminent to restore liquidity, not unlike the Mexican gentleman in the clip below begging Llewelyn Moss for water in his native language. 

Indeed, old habits die hard, as we are seeing in real-time right now.

History says dip-buyers in bear markets eventually give up in a rather emotional way, as they finally realize the prior, V-shaped rallies to new bull market highs are in the rear view mirror. At that point, markets become prone to fear upticking as selling intensifies and, therefore, down we go with some incredible velocity. 

As it stands now, we appear to slowly be getting towards that stage, right on time, too, in terms of seasonality and summer trading having concluded. 

Just this morning, with rates and the U.S. Dollar both surging higher again we have a green-to-red open with tech leading lower, namely software. While bulls have been valiantly holding out for another "wall of worry" and "hated bottom," the technicals, macro picture, Fed stance, and seasonality all point towards bulls having finally trapped themselves this time after years of using QE and ZIRP to their advantage to trap bears. 

Thus, I have no plans to cover my current equity shorts, nor my short on TLT which I have been holding for quite some time.