What Did That Two Points Cost?

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Well, your federal government spent several billion more dollars today propping up the market, and for their money (actually, your great-grandchildren's tax dollars), they got two points on the Dow. I just calculated what that is in percent terms, but the result is shown using negative exponents, and I don't want to bother figuring out the value. Suffice it to say, the nimrods at the Fed are willing to pay any price to get a new record on the Dow, day after day.

I have little or nothing new to say about the market, but I feel compelled to say something, particularly with the dearth of non-Tim content, so here we go:

First, here's the Dow. The picture speaks for itself, and today's spinning top doesn't exactly suggest lots of underlying strength.


The only area I've been bullish has been precious metals, and those are firming up nicely. Some of the smaller miners are up about 20% from recent lows, and I think there's plenty of gas left in the tank. But once we get near those retracement levels, it's party time for the bears. I think precious metals and miners are going to head into a gut-wrenching free-fall. For now, I remain bullish.


As simple-minded as it may seem, the pathway below for the NASDAQ seems to be the most likely, and it is certainly the cleanest from a charting perspective. Obviously, even if we finally do get a downturn, it's not going to just sail lower as shown here; I'm simply suggesting a diminishment in prices lasting through about early- to mid-May.


Now that we're wrapping up just about 4 months of an unrelenting rally in the context of a 4 year unrelenting rally, I confess to feeling more than a little shellshocked. At this point, I am keeping my commitment level firm but non-insane at 60%, with the rest in cash, and I refuse to ramp up positions until a meaningful downtrend has revealed itself. It needs to be measured in at least days, as opposed to minutes.

See you Wednesday for more punishment.