Traders gunned for 2,100 on the S&P 500 last week. They briefly touched that level, but there was no follow through for the obvious reason: no one with a brain believes this rally.
We’ve broken above the downward trendline established by a series of lower highs in 2015. However, there’s a decent space between here and the all-time highs that has yet to be filled. And with momentum waning, it’s quite possible this move was a false breakout.
In truth it’s difficult to find just who is buying stocks right now.
- Corporate buybacks are in a blackout period, so it’s not that.
- Corporate insiders are selling the farm.
- Individual investors are pulling money out of stock funds.
- And institutional investors have been net sellers of stocks for weeks now.
This leaves Central Banks.
What used to be conspiracy theory is now a fact: the futures exchanges permit Central Banks to buy stock futures to provide “liquidity.” It is not coincidence that this policy occurred around the time the markets began to feel increasingly manipulated with stocks ramping higher for absolutely no reason at various points during the day.