Mass-Scale Gross Outs And The Global Canary

If it can't go down, it must go up. I continue to see a path for higher prices. Even a worst case scenario at this point -- a flush to a normal Fibonacci retracement at 1646 -- would still keep the pattern looking good.

1646 just happens to coincide with a volume shelf at around 1650, so it's not too far out to consider.

The longer the market bides its time, though, the higher it can go should a breakout occur. Targets range from 1709-1732.

Elsewhere, however, the news is getting bleaker and the bifurcated mood conundrum is growing. Bloomberg reports Chipotle Eating Higher Avocado Cost Shows Fed Disinflation Worry.

"Chipotle Mexican Grill Inc. (CMG) isn’t charging diners more for guacamole this year, even though the restaurant chain expects to pay more for avocados. That isn’t an appetizing prospect for Federal Reserve policy makers."

Again, don't mention the word disinflation or deflation if you want to be popular in Social Media Land, but when companies such as Chipotle lack pricing power, it's not a good sign. I continue to suspect that their stellar numbers are due in large part to consumers downshifting to fast food when they choose to dine out.

Speaking of appetite, the New York Times reports that "the public seems to have an appetite for a mass-scale gross-out." Art That Turns Both Heads and Stomachs is an unusual read during a time that the markets are making new all-time highs. But it makes sense socionomically, to me anyway, because it is the latest example of bear market tastes being expressed during "bullish" market action.

The artist Paul McCarthy "has packed the Park Avenue Armory this summer with scenes of degradation, violence, nudity and sex in his reimagining of the Snow White fairy tale."

Degradation and violence are not happy, bull market moods. This is why I continue to think the markets have been in a bear market topping pattern since 2000, and are holding up in order for the Dow to reach the upper trend line of its broadening top around 16,000.

"Given the huge crowds flocking to the Armory show, the public seems to have an appetite for a mass-scale gross-out." Huge crowds -- that's the important take away. Always watch the crowd.

Lastly, Japanese Industrial Production numbers came out last night and were horrible. So horrible that the Nikkei went up 180 points and the yen weakened considerably. The estimate was for -1.5%. The actual reading was -3.3%.

Zero Hedge notes "the miss is the largest in 2013 (since Abenomics began) and makes it 6 of the last 8 months missing expectations. Household spending shrank for the 2nd month in a row, missing expectations for the 3rd month in a row."

I'm watching the Japanese markets carefully. Abenomics is the ultimate global canary.