Another overnight reversal of lower prices.
I like bond guy Jeff Gundlach, but he was just quoted as saying something peculiar.
"If [the S&P 500] breaks to the upside, which I define as accelerating above 2,200, it is a good, low-risk, ‘go with’ buy."
"Low-risk, go-with buy" sounds suspicious. I have multi-year Fibonacci extension targets at 2222.37 and 2223.46.
Or maybe it was seeing this yesterday that made me suspicious.
The author felt the need to antidote what he perceives to be a Permabear epidemic, while at the same time, according to Goldman Sachs, the median S&P 500 stock trades at the 99th percentile of historical valuation on most metrics.
"So here’s my permanently bullish thought: The world is going to keep getting better in the long run. But practically any measure global wealth and well being will improve over the rest of my lifetime, and my children’s lifetimes. Along the way there will be panics and crashes and bubbles and politicians you hate and horrifying global events. Asset prices will rise and fall and rise again, because that is what asset prices do. Competitive corporations will seek new ways to increase revenues and profitability. Many will fail. In a long enough time period, any single company is all but guaranteed to fail. But the collective whole will succeed, and shareholders will benefit. If this all sounds a bit too Pollyanna for you, maybe long-term investing in stocks isn’t for you."
Notice the subtle put down at the end? It reminded me of this whopper from 1999.
We're facing 25 years of prosperity, freedom, and a better environment
for the whole world. You got a problem with that?
See the subtle challenge here too?
When people are so convinced of their opinion that they antagonize opposing views, they send a clear message that a trend has been in force for some time and could be ready to reverse.
Ironically, saw a great bumper sticker yesterday that suggested "don't react, rejoice."
Elsewhere, Spain's Banco Popular decided it suddenly needed €2 billion, so it sold a bunch of shares. This spooked investors so much that the stock cratered over 20%. Could there be smoke in Spain?
USD weakness met with JPY and CHF strength. Not encouraging.
Continue to look sloppy.
WTI crude followed Brent crude above 50. NG rollover gap higher and now correcting from it.
Bounce in gold looks weaker than silver's. Platinum, palladium, and copper higher as well.
Here's the current dilemma. If the S&P hits the expected 2100 level, it will also complete a 161.8% Fibonacci extension at 2099.75, which could raise the odds that current action is an impulsive move leading to new highs rather than a b-wave leading to a continued correction.