The collision of global markets and social mood

Monday, April 22, 2013

The Fishy Bull

Asia's major bourses (ex-Shanghai) are higher along with Europe. S&P futures are higher too, looking like a rising wedge overnight. I continue to see the potential for higher prices, possibly 1575 or more, before more downside.

The teeny gap at 1588.85 remains, though it may be quite a stretch at this time. Most scenarios still point to eventual higher prices, while some patterns suggest a top is in. I currently disagree with the latter, even though I recgonize more downside could come, but am open to change.

One thing I didn't like on Friday was seeing what seemed like the lowest volume ever on an option expiration. I have no idea what it means, but it got my attention. Volume has been cockeyed since shortly after the 2009 lows, but still, it's yet another indication of imbalance. Historically, bull markets move higher on higher volume. Friday was just another example that something is fishy.

Some of India's largest companies are experiencing severe water shortages causing the government to embark on a $20 billion infrastructure spending plan for water resources. Water is a huge macro story moving forward, especially for China and India, two countries that need vast improvements in the way they handle not only water, but spent water and sewage.

Other news with large possible ramifications: CAT missed earnings, missed on revenues, gave lower guidance, lower forecasts, and all of its cash flow was attributed to net working capital, which is never a good sign.

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