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.

0312-dow


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.

0312-hui

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.

0312-ndx

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.