I wrote last night about Bears in the Balance, musing that if we pushed a little higher, it was pretty much curtains for the bears. Well, that’s what happened: the S&P 500 and NASDAQ both closed at the highest levels ever recorded. The NQ has burst above its pattern, yielding a very bullish breakout:
Well, that’s just a shame. Add another potential reversal chart to the ashbin of permabull history. The Dow Jones Composite diamond pattern is no more….
February has been a wretched month for the bears (dare I use the plural anymore?). Let’s review where things stand as of Tuesday’s close. We’ve got a NASDAQ Composite which has broken out of a cleanly-defined range:
Well, the three remaining equity bears on Earth got their last hopes blow-torched overnight, as central banks continue to do what they do best – – – ease. China dropped interest rates (because God knows what’s holding the world economy back are the sky-high interest rates we’re all burdened with), and Europe decide to go Full Kuroda on their own “easing” (sending EUR/USD into a free-fall). Suffice it to say almost everything but the Euro – – crude oil, gold, equities – – is flying higher. Here’s the ES (including, for big laffz, the brief bout of weakness it had during the times of Ebola):
Early this morning, when the ES was down double digits, an esteemed Sloper made this remark:
Tonight I’m going to forego the usual quest for thin reeds on which to hang the equity bear case, and instead offer up reasons why all hope is lost for now. So here goes…..
First, the Dow Jones Composite has penetrated and successfully tested its former resistance line. This resistance is now acting as support, as illustrated by yesterday’s test of the line and today’s acceleration up and away from it.