Popping bubbles of this magnitude - doesn't come easily. October's very successful downside move was in my view a harbinger of what can happen; and in that essence 'they' had to bring it back to prevent a serious debacle.
I believe it's essential to keep in mind real disconnects between delusional optimism at high levels; seasonality that is typically firm; economic realities that have not changed for the better that much (and if they had that presses the Fed for faster addressing of their zero-level pinch they created); plus the technically extended levels and leadership erosion that should be troubling.
On Friday the market seemed fascinated with the total irrelevance of hitting a psychologically-watched (by who aside media?) Dow 18,000 level; while it ignored the continued erosion of big caps needed to sustain upside grinds; like the Oil stocks (which were under pressure most of the afternoon).
This is a troubled market where managers 'simply don't want to let go'. They want (their objectives and rationale and how high is high are discussed with our ingerletter.com members; we invite you to join our nightly reports).
In summary (weekend video describes): high-yield spreads widen; we have had the 3rd Hindenburg Omen (not always valid); we have VIX (reserved).
Daily action - left us flat the S&P both position-posture and over-weekend; as noted thoroughly in lengthy videos describing our perspective here.
The new week will also be challenging; and barring over-weekend news, we suspect they'll try again, in an effort to press S&P 2100 of course. By the way on December 11 (notable remark pertaining to this).
Lots of hard challenges progressively resolving in markets; as progress is a fleeting goal in global economics and geopolitics. Increasing awareness and sobriety belatedly dawning on analysts. Investors grasp implications of unsustainable financially-engineered moves; that took equity markets beyond delusional optimism. Now, are these levels suspect?
Gene Inger
www.ingerletter.com
