Thre Front Runners

The new narrative amongst the following class is that the emerging market crisis is causing temporary jitters affecting the US stock markets.

Meanwhile:

The Front Running class, otherwise known as Smart Money: which means money closest to the Fed, understands that the Fed is serious about reducing the rate of their balance sheet expansion.  The "returns" of this expansion are getting close to zero.  It doesn't matter that they're still expanding.  The fact that the rate of expansion is slowing is enough to make the Front Runners head for the exits on all of their trades.

The Front Runners are the ones who have single handedly pushed everything higher on the Knowledge that the Fed would keep increasing  the rate of expansion.  Emerging market currencies and markets: the US stock markets, and a host of derivatives.

Now the Front Runners will sell everything with the knowledge the rate of increase has reached its limit.  Then they'll put on massive short positions and the downswing gains momentum.

Who are these Front Runners?  They're the banks that own the Fed, and the Hedge Funds run by ex bankers who left to make even more money - but who still maintain their web of contacts.

Nothing else has moved the markets up.  Nothing else will move the markets down.  You'll hear lots of stories about economic data.  None of it will have any bearing on the markets. 

It's all about front running the Fed.