Stock Market: In the Bag?

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So is whatever spooked Dennis Gartman on Friday behind us now? The dovish Fed story is getting played today. It’s the ‘beat the crap out of ’em and then wash-rinse-repeat’ market. Longs, shorts, everybody into the spin cycle. All because this market is still 100% enthralled with these clowns and that makes it difficult to manage.

SPX held support (60 min. view below), Semiconductors never lost the uptrend and now the Fed comes with some dovish love making for the market. A bounce at the least was in the bag.


But the SPX did hold at support as everyone should have noted and so people who missed the downside kick off should not have been shorting it above support. Only on a breakdown should the market be shorted; a breakdown followed by shortable bounces.

A daily view is even more concerning for the bear case. My main question was not ‘is this the start of the bear market?’ (I continue to lean toward that not being the case). My main question has been will this interim correction be a mini or a maxi?


Today wants us to believe the answer would be ‘mini’ (2 down days is hardly a correction) as with the one from early March and unlike the nice one in January. One thing the bears have going is that today was pumped by the pathetic fretting of our friendly interest rate manipulators. The market ate out of their hand today. But inflammatory news usually does not build good rallies, or going the other way with negative stuff (like oh… Ukraine), corrections.

Unlike SPX, the NDX has established upside overhead resistance, but the bounce target is higher still. As for shorting it, that would depend on what the rest of the market looks like at the time NDX reaches resistance.


Again, NFTRH’s stance is and has been that new highs are very possible, with weird bearish events like the last few days serving as bull fuel. In fact, manic new highs are very possible because that remains the most likely eventual killer of this bull; pure momentum into which the last buyer buys silver circa 2011, err the stock market.

In other words, if people see enough of these supposedly bearish events neutered they eventually tune them out. That’s when they will be ripe. There has been too much doubt built in to this phase of the bull. And I am talking about late 2012 with the election hysterics, the Fiscal Cliff Kabuki Dance, the Cyprus confiscation mania on through the Ukraine, HFT and the well traveled 1929 Analog. All frigging bullish my friends.

I believe the only thing that will kill this market is bullishness.

We’ll see. But the bears have some decision making to do now. The SOX as we have been noting is in 10 year breakout territory. The NDX can get fixed in a nanosecond as everybody buys the post-split Google and realizes that Microsoft thinks it’s a tech stock again. Apple? Was that just a pause to refresh?

Am I a good buyer of this market. Yes, a fair one. I get a little skittish with its emotionalism and its utter enthrallment with the creeps at the Fed. But have bought some items for the bounce (or more). But it is no secret what I think of this in the big picture. Interest rate policy has manipulated a market to desired ends. Hence I can chart this market, I can advise a skittish financial adviser brother in law “BULLISH” in Q4 2012… but I am no bull, and that’s no bull.

When the market bites the hand that feeds it – and it will – I would not want to be holding Uranium circa 2007… err stocks, Crude Oil circa 2008…err stocks, Copper circa 2011… err, stocks, Silver circa 2011… err, stocks.

Or better yet, I would not want to be holding stocks circa 2000… err, stocks! Ha ha ha.

Hey, happy birthday to me. The kids are making a cake right now! 🙂 Off to go for a run so the cake will be earned.

[edit] Here is what the Fed Minutes jawbone did to the yield curve. So gold got to play too. The 2’s got hammered and the yield curve shot higher. Compare the end of day Bloomberg graphic (1st one) to the one shown this morning.