Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
Again, not much to add to this market in terms of analysis – nothing matters other than central banks. Last Wednesday/Thursday there were some 9 economic reports, 7 of which were disappointing or could be considered as such and all it got was one rare day down, and then new highs Friday. Markets are up 10 of the past 12 sessions and 17 of 21. Friday’s move to 1666 was an exact 1000 point rally from March 2009’s 666 bottom. Since this most recent leg of the move has been medium fast rather than a huge spike ala 1999, things are not necessarily overbought on the daily chart but we are seeing extremely rare action on the monthly and weekly chart, due to a lack of any correction this year. Aside from being above the monthly upper bollinger band the S&P 500 is some 12.5%+ over its 200 day moving average; over 10% is rare. The DJIA has been up 18 Tuesdays in a row. Etc etc.
It is a quiet week economically – a few housing reports and such but again last week the market ignored all the bad economic news and two mildly positive reports Friday were celebrated. It’s that sort of market. All that matters are central banks and on that end Bernanke visits Congress Wednesday at 10 AM – with the FOMC minutes of the last meeting that afternoon. The normal clucking about tapering begins and that is about the only thing the market sees as a reason to selloff for nowadays. Of course the FOMC just added language at the last meeting about “reducing OR increasing” bond purchases so the taper talk is ironic. Expect hours of analysis about nothing ahead of Bernanke.
In terms of sector rotation last week was all about financials…
… but over the past month all the ‘right’ groups have taken charge, along with small caps regaining strength. (to remind “cyclicals on he far left = consumer discretionary/retail). Not much to poke holes at in this market about other than any lack of pullback and weekly/monthly overbought conditions and seemingly no reaction to any news for more than an hour before a resumption of the melt up.
Not much more else can be said about this market.
Disclosure Notice
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
