Bulls Will Buy Every Low

Bullish investors are like broken clocks. They will buy every dip with a Pavlovian consistency. Here is the Nasdaq 100 futures, NQ. There is a series of double-bottoms on shorter and longer time frames. Naturally, a new low must first cross the prior low. These moves lower are continually interrupted by bulls buying when the former low is reached. This morning was a failed breakdown in the NQ, which is also a reason for bulls to buy. At some point, a real sustainably rally will follow, but I still don't think that time has arrived yet. Note that these may be good setups on shorter time frames. I'm not arguing there should be no rallies, only that I sense the market is stubbornly grinding lower because a seemingly endless supply of dip buyers ensures that there are no catastrophic drops that cause widespread panic/capitulation. There is localized collapse in stocks such as DOCU, COUP, FB an so on, but not a systemic capitulation that turns off the dip-buying impulse.

The bond market suddenly priced in a 50bps rate hike:

This is also a reason to buy because "all the bad news is priced in." Except all the bad news isn't priced in because every day brings more bad news. Only when the market anticipates more bad news, when the market imagines an apocalyptic future that is very unlikely, often at a moment when the leading indicators are already turning positive, then the final low will be in.