Of course it’s Groundhog Day today.  

The movie “Groundhog Day” is one of my all-time favorite films and our foreign readers would do well to remember that we live in a country where thousands of people actually do gather each February 2nd in a small town in Pennsylvania where a dozen men in tuxedos pull a rodent out of a box to see how much longer winter will last based on whether or not it sees it’s shadow.
 
Perhaps the little ritual itself isn’t that strange but how seriously people in this country take it is downright weird!
 
In the movie, Bill Murray is forced to live the same day over and over, much like the trading range the markets have been stuck in for the past few weeks.  There’s nothing wrong with being in a trade channel if you learn to recognize the tops and bottoms – that’s why it’s so important we watch our breakout levels and don’t overcommit as we near the tops or bottoms of the range.  As I often say, “if there’s a real market rally, we have all the time in the world to participate” so we scale in slowly here, looking to see if we hold these levels but anticipating a very possible test of the 50 dmas – about 5% lower than we are now. 

The big news this morning is the BOJ, like our groundhog, coming out of their hole and declaring an early spring.  That was the topic of this morning’s newscast at Philstockworld:

It was BOJ Board Member Hidetoshi Kamezaki, who expressed an upbeat view of the Japanese economy, saying he expects the nation to pull out of its lull over the coming months and return to a moderate growth path.  “Japan’s economy is likely to gradually exit its standstill toward spring,” Mr. Kamezaki said after meeting business leaders in Saga, southern Japan.  Like our own Fed, the BOJ is out of firepower with zero interest rates and the printing presses running 24/7 so all they have left is the power of the other kind of press and every day we are hearing statements from Global Central Bankers and our own Fed Governors who tell us everything is fine BUT they are going to keep printing money until the cows come home.  

[HONDA]Only last week, Standard & Poor’s lowered Japan’s long-term sovereign-debt rating by one notch to AA-, the first downgrade for Tokyo since April 2002.…
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