Still on Wall Street we climb the wall of worry, inexorably higher, creeping like a vine up the side of a building, seeming to defy the laws of nature and what “ought to be”. Its a market, like the vines on a building, that creeps higher at an intolerably slow pace, seeming to do most of its growing out of sight and mind.
Like the forests of Mt. St. Helen’s after the last eruption, tiny shoots of green give way to a new growth forest, in a wasteland which looks as if it couldn’t ever support life.
Can anyone imagine a scenario where an apparent keystone cop version of a terrorist attack takes place in Time Square, and is simply sloughed off by the general population. Die hard New Yorkers, along with tourists from sleepy towns in Mid America, shrug it off as if it were a daily occurrence. You’d think it was downtown Beirut in the 80’s. I love the fact that Americans have adjusted to what ever may come down the pike in that department. I also love the fact that, try as they might, the nattering naysayers of doom (better known as TV “journalists” were unable to fan the flames of fear. Try as they may to spook the herd, the herd looked, listened, and rightly returned to eating grass and drinking water from the watering hole.
Similarly, I think this is a metaphor for this market. It has recovered from the depths of panic and despair in March of 2009. 666 seems like a distant memory in the S&P cash as we seem poised to go for the 62% retracement of the 3 year old correction, right at 1228.
I think we will rally into Friday’s unemployment number, get a better than expected number, and then ironically, have a correction of that number. The number will be bullish, the bulls will step in expecting a higher pop, only to receive a shock from an electric cattle prod.
The profits are going to those who went against the popular feeling of doom, distrust, and distress over the past 14 months. Those who have waited til we got “good fundamentals” are going to find out that good fundamentals often result in interesting funnymentals. Ed Seykota was the first person I ever heard utter those words, so I have to give credit where it is due.
The fundamentals turn to funny mentels when everyone gets long because, yes once and for all, everyone, from the chosen one, to Newsweek, to the oracle, agree that yes, it is safe now.
Every time I hear bullish talk from a politician or political pundit, I cringe. Its like watching a dirt track race waiting for the next crash, and those people spouting bullish rhetoric after an almost 5,000 point rally in the Dow from trough to peak… Well, they are just tempting fate. The craacken is out there, its called a ten percent haircut. And it will come back. Its only a matter of time. Most likely, when everyone starts discounting the possibility of it returning.
So, look for a rally into the un-enjoyment number on Friday. Look for a bullish number. I can’t believe that the over all feeling, if not the specific information, is not well known to at least some economists in the know somewhere. Why else would VP Biden have predicted a surge of new jobs. Do you think, just maybe in the heat of his giddiness at hearing good news from the depths of the labor department, he might have gotten a little overwhelmed with the prospect of finally stemming the tide of job losses? Beeks and the Duke’s know something, to paraphrase a favorite movie.
I am guessing that CNBC’s coverage on Friday morning will once again resemble a media blitz once reserved for the Macy’s parade or Astronauts from the 1960’s when space travel was an oddity.
In short, it should be quite a show. Heads they win, be cause the news is bullish.. Tails they win if its bearish, because, after all, like all TV reporting, “if it bleeds it leads.”
I hope I am wrong. I have a standing bet for a Pot Bellies Milk Shake that we will get a Time or Newsweek cover detailing the 5000 point comeback, extolling the architects of the recovery.
I can almost taste it. We just need some more negative news to continue fueling this rally of dis belief which began in March 2009.
Good Trading
