Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
Friday was pretty typical of the year – when a key technical level was needed to be broken it happened in premarket. There were 3 economic data points, 2 (including ISM Non Manufacturing) missed, but all that mattered was the employment report. More broadly speaking with 5-6 weeks of weakening economic data all the market really did was go sideways in a wide range. And that ended Friday with the break out of the S&P 500; even the lagging Russell 2000 joined in.
At this point there just appears no reason to do analysis anymore – the central banker liquidity seems to have bid up nearly every market and whatever the news it only matters for hours or at most days until the next wave of buying comes in. We saw a bunch of high volume distribution days over the past month; that used to matter – but no more. Breaks of technical support – doesn’t matter. At this point it has to be put on the table that a 1999 scenario awaits, although not so concentrated in one index (NASDAQ) as 1999 was. Everything high end is soaring – art, collectibles, farmland, equities, bonds. So this worldwide QE seems to be inflating anything ex gold and some commodities which are still Chinese dependent; considering what is being done globally makes Greenspan’s 1998 (LTCM bailout) and 1999 (Y2K prevention) actions seem like a pittance it appears Tepper has had it right all along. Already 2013 is the first year in 17 without a 5% correction in the first four months, and the DJIA has not had a 3 day losing streak this year – the longest streak to begin a year since 1958… so we now just sit and watch to see what other records break. Economic data quiets down this week after a heavy dose last week, but again – it appears moot anyways.
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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
