Bears are eyeing this tape nervously...why? In theory, bears should be delighted: the language from the ECB was somewhat dovish, with growth targets lowered — and everyone knows September is the worst month for the stock market, right?
After everyone with a long bias got killed in August, traders have hunkered down to face this dreaded September — filled not just with bad history, but also with all sorts of political land mines in the U.S. and Europe.
No surprise that traders are reporting higher cash levels, if not higher short positions.
And Goldman Sachs has just taken note of the surprising July trade data and now sees UPSIDE risk to their 1 percent Q3 GDP growth forecast. And Nomura, based on the same data, has just RAISED their Q3 estimate to 2.6 percent from 2.4 percent.
Does this sound like a perfect scenario for everyone to get killed — again? Because it looks to me like the risk is on the upside: September could very well be an up month, judging by the trading trends so far.
Maybe we should throw out the "September is the worst month" mantra. How about, "The market always hurts the greatest number of traders." Now there's a Wall Street axiom to tuck away.
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