Markets were down hard early today only to reverse course with more style than even yesterdayâs âstick saveâ. Most observers were at a loss to explain the rebound with one saying: âIt has paid to buy pullbacks, since the market has done pretty well.â Duh! He continued to comment when Greek troubles came up and answered: âItâs like high oil prices, some days you walk in and it doesnât matter.â Whew! Iâm not worried now.
The bottom line remains Fed monetary policy and the after effects of bailouts, also known as âthe punchbowlâ are still the bullâs motivation. While this is still in place trading desks know what to doâignore bad news, cherry pick good news and buy. So, move along cowboy, nothing to see here.
Volume did increase on an up day for a change and breadth was positive especially on the NASDAQ per WSJ data below.
The last time I saw rallies this powerful and sustainable was during the dot.com boom. Then, all technical indicators and common sense were blown away. The housing bubble that followed shared the same common stimulus, the Fed and other government policies. In this environment logic and even lengthy experience must give way to the tape. The one true thing remains unreasonably low interest rates and the after effects of bailouts and other stimulants. The trading desks are on crack and having a great time. Other institutions with captive assets generating fees are content and 401K assets are performing well making consumers feel better. This is the intent. What will follow is something truly ugly, but until then, party on dudes!
In after hours trading per MarketWatch you can see how poorly some big names are doing after reporting earnings. This bodes poorly for tomorrow but was the same look and worse last night for other companies.
...
