I normally don't take time on Sunday afternoon to do a post, but what we're seeing now is somewhat extraordinary, so I thought I would whip this up.
It seems this entire year, we've been going through a cycle of:
+ Market Panic
+ Some form of the game Kick-The-Can
+ Market Lurching to New Highs
Whether you are talking about the "Arab Spring" (ha!), the Japanese Earthquake, the Japanese Tidal Wave, the Japanese Nuclear Disaster, the Greek Bailout, or – right now – the threat of a US Default (can you even believe you are reading those words?) we are playing out the same tired old schtick which has, from this bear's point of view, been profoundly disappointing and exhausting.
So here we are at stage 2 again – market panic – acting as an answer to stage 1 – the debt crisis. I guarantee that within hours or days, a bevy of politicians will crumble like slivers of bonito flakes on top of a fresh serving of agedashi tofu and the market will vomit to new highs based on the stupidity and short-sightedness of your fellow citizens.
So, bears, enjoy this brief respite while it lasts. The NQ is down over 1%, and its "breakout" Friday has been badly damaged. Incredibly, the Euro is actually down somewhat as I am typing this, in spite of a belief the dollar would completely collapse. And – surprise, surprise! – precious metals are absolutely rocketing to the moon as the safe haven.
Anyway, since I'm largely short, I imagine tomorrow (Monday) will be a good day. But I have pretty much zero expectations that the good times will last. The political scumbags will kick the can down the road, and when the bear market finally does come, it will probably just take the Dow down 3000 points in a single session, and all the natural, God-given string of smaller drops will all be delivered in one fell swoop.
Have a nice evening.