Beware the Nice Guy Syndrome

We have ourselves another day on Wall Street with extremely wide price swings. And, yet, it is another day where, as I write this, we are well off session lows into the final ninety minutes of the session as bulls continue to pound the table for a good bottom being firmly in place for equities. 

Beyond the wild volatility, we have gold (and miners) going ballistic to the upside, with rates on the long end of the curve remaining, no doubt, far more resilient than the White House would prefer But perhaps the cherry on top of cross-asset issues may very well be the Japanese Yen continuing to move higher. 

In this sort of market climate, what with all of the uncertainty which makes even the cockiest of market players and pundits blush, it can be rather symptomatic of human nature to simply revert to following the pack--Many folks on social media and financial television are so sure a bottom is already in place that they are either all-in long or are confidently building positions as we speak. 

But that begs the question of whether the right view to have here is also the one which takes courage: To avoid being the stereotypical "nice guy" simply agreeing that a bottom is in place in order to not upset the apple cart of bottom-pickers. 

In other words, in a non-QE/non-ZIRP world, this sort of price volatility is historically not bullish at a minimum, if not outright horrifically bearish. The swings denote the amount of indecision and the issues the market is having properly evaluating equities for what they should be worth. And the constant barrage of news flow is now taken with heightened sensitivity by equities, something so often ignored during the silky smooth uptrends. 

If you believe QE and/or ZIRP are coming back imminently then perhaps a bottom case can be made. But given the long end of the curve it seems like Powell and company will try to jawbone at first before taking action at the next FOMC, despite this morning's cool CPI print. 

Either way, it takes courage here to disagree with the many bottom-callers who have already planted that flag in the ground. The amount of exuberance and cheerleading we saw during yesterday's epic rally is not something you saw in March 2009, for example, let alone off bottoms like 1982, 2003, 2011, 

I will side with pre-QE/pre-ZIRP history on this one.