We were taught that stocks and bonds should move together. Ditto dollar and commodities, only inversely. Then stocks and bonds flipped. Then it was the euro that moved opposite stocks. And now its bonds down, stocks up, gold up and dollar down. Did a butterfly just flap its wings?
Basically, everything that moved with or against each other thing did something different. Was it BP testifying before the gods, er, congress? Manufacturing data? It certainly was not housing data.
The real question, unless you are an academic wonk, and I mean that with love, is what the Hades to we do about it all?
I refer back to my column where I laid out the head-and-shoulders patter in progress. The S&P 500 right should is supposed to be at 1150 and if true we are in no-man’s land between support and resistance. It is a loser bet since risk/reward is poor for both bulls and bears alike.
How about this? Since an awful lot of people have seen or are about to see the head-and-shoulders we can assume it won’t work as expected. Again, what do we do? How about preserving capital?
Have you seen the pending death cross in the NYSE composite? Barring say back to back 400-Dow point up days, the math says it will cross next week.
Enjoy it while you still can.
