The collision of global markets and social mood

Wednesday, March 6, 2013


Sure there were the obligatory headlines yesterday . . .

Dow passes intraday trading record

Dow Jones industrial average surges to an all-time high, beating 2007 peak

Dow surges to record on optimism about economy

Dow average blows past its 2007 record high

Dow Jones industrial average surges to record

Dow sails past all-time high

How to Celebrate the Dow Jones Record

Dow Jones industrial average trades at a new high

Dow Climbs to Highest Level on Central Bank Optimism

Dow Reaches Record High, Spurred by Fed and Profits

"An historic day" (Fast Money comment)

New Dow Highs Usually Spur More Buying

Dow Theorists Licking Their Chops

Dow Jones Holds Record High

Dow Index Spikes to All-Time Record

Stock Traders Celebrate

. . . but the sentiment wasn't as unanimous as I would have liked.

Dow Hits Record High: Here's Why It Doesn't Matter

The Dow Isn't Really At A Record High (And It Wouldn't Matter If It Were)

Dow Jones high should not be mistaken for growth in the US economy

Dow hits record high but may be facing new ceiling

Even Jim Cramer was somewhat balanced.

I truly feel that sentiment is muted because collectively we have felt our purchasing power slide since 2000, and that it is quite possible that the market has been in a topping pattern ever since. That might explain the low volume, the weak internals, the sloppy patterns, and the host of other negatives that the markets have shrugged off.

Perhaps better said was this quote:

"Plenty of risks remain, but they are smaller - and they feel smaller to investors," said David Kelly, Managing Director and Chief Market Strategist at JP Morgan Asset Management in New York.

Until there is the feeling of No Risk Whatsoever, investors may remain on the sidelines and the markets may continue their patterns, whatever they may be.

Here's how one of the best investors ever, Stanley Druckenmiller, sums it up:

"The Fed is printing a lot of money. They are forcing people into markets. You shouldn't be buying securities because you're forced to buy them by zero rates. you should buy them because you think they're great value. They're great value only relative to zero interest rates. They're not great value on an absolute basis."

Futures are up today as Asia followed through and Europe has too, only less enthusiastically. At best, the Fibonacci cluster at 1542 slowed the rally, but 1550 remains a key target, and 1600 looms higher as a 13-year trend line target.

Cracks remain in the foundation, though, and I will still act on them. The VIX did not plunge to a new low yesterday as the markets were surging. I was a buyer of VIX April 18 calls. Or maybe it was this little guy.

I also heard a cool reggae mash up by Bob Marley's youngest son Damian Marley featuring his brother Stephen. What a great, hip sound. With the markets this high, everyone needs a little reggae.

All Night > Stepen Marley by Damian Marley on Grooveshark

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