Support held Monday morning at the lower end of the trading range leading to another jack to the upper end of the trading range. The swiftness tells you how paper thin the trading is…both ways. But we think the market hit a near term high at resistance on Friday…which probably leads to some more pulling in here. Yippee. Simply put, a break out of this range by the major indices, either up or down, will have consequences. To the upside…good…to the downside…bad. Duh!
Underneath the surface, it remains a 50-50 market where half the market is blah while half the market works…thus the reason for the trading range. But…seeing a few things changing you need to be aware of.
While bonds remain in a long-term bull market, the recent high looks to us as a good short-intermediate term high. Bonds have been on a tear.
Off the move in bonds, we think the interest-rate sensitive areas of utilities and reits have also put in short-intermediate term tops as many names are breaking below support areas.
While gold and gold stocks have had a good relative bid, we think the short term has turned down. We will now watch to see where support comes in.
Watch housing stocks as a few look poised to break out of long trading ranges. This group has been dormant for a while.
While our thoughts of a rally in oil-related issues came to fruition, we think they are close to petering out as they have come into resistance areas.
To put it mildly, trading ranges are your friend and your enemy at the same time. They are your friend because the time allows bases to form over a longer period of time in order to potentially break out. They are your enemy if you are impatient as the markets bounce around giving nothing but headaches.
Lastly, our two cents on Brian Williams! There is little doubt in most eyes that this man played with the truth…and maybe that is being too nice. But to us, the bigger problem remains what we have been telling you for a very long time. That is the utter corruption of the national mainstream media as they pick and choose winners and losers based on ideology by mis-reporting, under-reporting and not reporting whenever it suits their cause. We can give you a laundry list of all this nonsense but gather you know the list by now. There is no longer holding people in power accountable…that’s unless they do not like you. That’s when the attack dogs come out with teeth gnashing. When you are liked, you get away with anything.