Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
The action in Powershares QQQ (QQQ) continues. This is the ETF that has been up 12 weeks in a row, and is working on #13. Recall I mentioned a few days ago that even in the bubble that was NASDAQ 1999, QQQ only had a streak of 11 weeks in a row. So this is quite unprecedented action. Today is a great example – we had a small selloff after the initial morning pop and while a slew of sectors got hit, QQQ never even went back to flat, not to mention negative. Apparently big cap technology is immune from the global cycle. 
Actually this reminds me a lot of fall 2007 when every hedge fund on earth was hiding in commodities. Then we started seeing some very weird dislocations in August 2007 – stocks I was holding or watching like Mosiac (MOS) and CF Industries (CF) would drop 8% out of the blue in a benign tape. Later there were stories in the financial media about how so many quants had gone into the same names with the exact same strategies it was feeding on itself; it had created instability. At some point, somehow, this feels like a similar outcome is waiting. Who knows when, but this has become an incredibly crowded trade.
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Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
