Pretty funny to compare the news flow today to the market action
1) Job losses increase
2) Official government "inflation" shows signs of deflation
3) Spanish and Italian bond yields blow out
Conclusion: the market must go up, because it means intervention.
Same old, same old.
We are the top of this recent range after being near the bottom of it early in the day. It's almost the exact opposite of yesterday which was the opposite of the previous day which was the opposite… well you get the picture. We're flip flopping around.
By this time everyone recognize S&P 1340 to the topside as an obvious "buy point" so one wonders if we're going to get it just to suck in longs. I'd also like to point out we have a gap down in the 129.26 range on the SPY which is in the low 1290s. Doesn't need to fill anytime soon but those almost always fill within a few months on the indexes.
As for today's action, not much is going on in the go to tech stocks as a lot of beaten down merchandise is popping today. But these names were the ones hit hardest yesterday. Etc Etc. The lack of a leadership group remains an issue (ex utilities) as most of the winners right now are "one offs" and very few are able to maintain a breakout past a day or two.
This environment is not pleasant as everyone awaits a bipolar outcome – almost one event every week. It is like an earnings report for the entire market. Either everything will ramp or everything will get crushed…. it's a roulette table based on intervention. Black or red. Next week there will be 2 of these events - Greek elections and FOMC meeting. Then the G20 meets shortly after and everyone will predict some global intervention from that. Last week it was Spanish bank rescue. And so on and on it goes in the constant hope for a rescue. And in the background remains the slowing economy but of course that ALSO can be fixed with more intervention Frankly it is amazing with all these issues the market is down so little on a relative basis in the U.S. with this backdrop. So perhaps that is "bullish". Or simply a reflection of an environment where every 10% drop in stocks demands central authorities to come in and "fix" things. (pun intended)
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