Thursday, May 09, 2013
IS BROADENING MEGAPHONE PATTERN NEGATED?
The world markets are showing strength, like it or not. Economic fundies may be weakening, more on government assistance than ever before....but stocks still rising.
The FED, for now trumps all other developments. I would still argue this will not end well, but that is just my opinion, current stock action does not bear that out. Charts don't lie.
Does above "breakout" signal maybe Roubini comments looking for 2 more years of bull are accurate...then he says lookout. SPX could be at 1900 or more by then.
This is NOT a typical rally, or bull, let's at least get that straight. World Central banks are blowing bubbles like crazy to save us from the financial abyss and for now, judging by stocks it is working.
STock markets are supposed to be "discounting mechanisms", then they for now appear to be saying blue skies ahead.
When stocks continue higher, with fewer and fewer stocks participating, this will be seen by lagging Advance Decline line, THAT will be one of your warnings....THIS is not present today.
With 0% returns on anything else, stocks and riskier asset classes appear to be about only game in town....play or go home.
IMHO, what this WILL do, is set those staying TOO long to the FED punchbowl party for an Historic crash/decline. It would seem there is barely a BEAR left in the house.
Even if sentiment corrects, stocks develop a LITTLE weakness.....greedy hands await.....for now.
This can all change, like the grain of sand analogy....we dont know what or when, but a single grain of trouble could set the whole mess tumbling...we will either SEE it coming as suggested above, or we won't at all (Crash scenario)
Posted by Marc R at 1:41 AM