Trader: "It's Amazing What Just Happened On Tuesday"

If, or more likely when, regulators ease restrictions on proprietary risk and position sizes, things will be slow to start, because traders are out of practice and market structure isn’t really set up for it. No matter the protests to the contrary. Of course, as long as central banks remain activist investors, it may not matter all that much.

Many of us assume that in fairly short order, U.S. equity markets will print new all-time highs. The templates to announce it are already written. Champagne corks will pop. The temptation to take a peak at your 401(k) will be overwhelming. The GDP and employment reports were strong. Actually, better than they were given credit for. Earnings have mostly done their part, notable exceptions notwithstanding.

But, make no mistake, the U.S. stock market is a favorite flight-to-safety vehicle. Big, liquid and simple. It is, counter-intuitively and simultaneously, benefiting from good fundamentals and the fact that everyone is scared.

Try this one on for size. If the world were to calm down and more level heads to prevail, you might find it the perfect time to be lightening up. Who would have thought that the analysts calling for a major correction might just be the optimists out there.

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