Reasons the market looks ready to pull back May-July:
- Treasuries have a relentless bid recently, and as I have discussed recently there was major accumulation of 80,000 Treasury (TLT) July $113 calls. Although this is just one large position, action in the TLT has tended to be right, and can see my call from 2013 to short the TLT in the 120's before it crashed to below 105.
- Sector flows showing a flight to safety. The consumer staple names and large caps are starting to outperform, a risk-off market, and options action dictating the same with most of the sizable call buying occurring in boring large cap names like McDonald's, Wal-Mart, Pepsi, along with Energy.
- Seasonality - The market tends to struggle in the May-July period, and although I do not have the numbers on me, @RyanDetrick is always posting great data, and also aligns with the Presidential cycle.
- Price-Action in Momentum - I am watching a premiere growth name like Under Armour…