Goodness, the weather has been stunningly beautiful here in California. It is one big reason I live here. Okay, so the weather is good and the market is, well, shoring up, two good things to start this Wednesday.
- This just in… We interrupt your regularly scheduled review of the big-picture market environment models with… some good news. Yes, fans, the bulls appear to have rediscovered their mojo.
Perhaps the above is true. I would like to think so, but the way the market has behaved this year, I will withhold judgment until the S&P hangs out above 1900 for more than two days, the Dow crosses the 17,000 barrier and holds, and the Russell 2000 climbs another 7 percent or so. The point is well taken, though – the market has sentimentally changed.
- The U.S. services sector expanded at its fastest rate in May since March 2012 as new job creation accelerated. Markit said its flash services Purchasing Managers Index hit 58.4 in May after April’s reading of 55.
- The Conference Board’s Consumer Confidence Index rose moderately in May to 83.0, up from 81.7 in April. The proportion of consumers expecting their incomes to grow over the next six months was 20.2%, the highest reading since December 2007.
You can find numerous, no, copious, no, voluminous market opinions that suggest the above is not the reason for the recent market sentiment change, but ignore “the man behind the curtain.” These folks pull the levers and spin the wheels creating a lot of smoke and booming noise to make it seem as if they know more than they do. There is no magic there. Like all of us, they look at their data and conclude. The problem I see with many of these folks, though, is their conclusions ignore the essential reality of the market – it trends on long-term fundamental data.
- If the rally is to last, it will most likely have to peel back, regroup somewhere around 1880 (for the S&P 500 anyway), and then get back on track. For the Russell 2000, the big line in the sand is the 200-day moving average line, around 1119.
See what I mean? The idea is that the numbers are everything. There is a complete disconnect from the economic fundamentals. I will grant you an important market fundamental is that many traders trade on technical analysis, but, in the end, the lines, the patterns, and the numbers matter little compared to the economic fundamentals.
- Let’s just agree to chill out here and let the market do its thing.
Yes, let the market do its thing, which at the moment appears to be deep breathing. As I write, the oh-so flat market is going about the business of consolidation, much as it has for most of this year. It is gathering in air at the new high altitude and considering the next hill.
The market is coming to terms with the reality that US economy is building momentum. So even if a “diagonal wedge” promising a breakdown or a “symmetrical triangle” promising a breakout is forming, look to the data for the market trend.
- Google is building cars that don’t have steering wheels, accelerator pedals or brake pedals, in an ambitious expansion of the Internet company’s efforts to develop self-driving cars.
I just love the above. It is so futuristic, so wild, so crazy, so real. Did I just say real? Yeh, I guess I did. I think I said that word because …
- A handful of U.S. states, including California and Nevada, have passed legislation to allow testing of self-driving cars on public roads.
Yes, I love living here in California. The weather is beautiful but the climate is, well, exploratory, forward looking, and supportive.
I can’t wait to see my first driverless car on the road here, the land of the car culture, the land of the crazy driver, the land of adventurous living.
Trade in the day; invest in your life …
