Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
While European markets are closed today, the U.S. gets back to work after the three day weekend. Friday the S&P 500 finally broke over a level it had been beating its head against for three weeks, the October 2007 highs. Slightly above this level is the intraday high and from there it’s all new territory. The DJIA of course did this a few weeks ago, while the NASDAQ is thousands of points away from repeating the claim, due to the Greenspan fed 1999 bubble. Everyone continues to look for some form of meaningful correction but thus far it has eluded all. Go forward we’ll have two support lines in the S&P 500 chart – the “accelerated” trend if you will which has been broken a few times now, and the “line in the sand” trend which connects the bottoms of November, December, and February.
With the inverse head and shoulder patterns from mid November to mid February “completed” in the mid 1520s, and the mini inverse H&S from mid February fulfilled at the mid 1560s (both of which presented resistance), one has to look at some very long term views to see any patterns. [Mar 15, 2013: The Mother of All Inverse Head and Shoulder Targets]
We continue to see a market led by healthcare and consumer staples (which have gone parabolic relative to their “slow growth” status) – normally a cautionary sign.
We continue to see a breakdown in copper – normally a caution sign.
We continue to see less stocks participate as new highs are created – normally a caution sign.
We continue to see emerging markets lag tremendously – normally a caution sign.
But right now nothing matters.
This week economic data will return to the forefront as will central bankers across the globe.
Today, the widely watched ISM Manufacturing data at 10 AM; forecast is for a small drop from 54.2 to 54.0. Construction spending also hits at the same time.
ADP Employment hits Wednesday premarket; forecast +205K. ISM Non Manufacturing at 10 AM; forecast for a flat 56.0 versus previous month.
Friday is the March employment data – estimates call for +193K versus last month’s +236K with an unchanged unemployment rate of 7.7%.
Central bankers meet at the ECB, Bank of England, and Japan this week as well – people expect fireworks from Japan (which has led to a massive rally and yen devaluation – let’s see if there is a sell the news reaction), and pressure is building for more from the ECB.
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Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
