Bad Continues to = Good!

From the UK Telegraph!

“World shipping has fallen into a deep slump over the late summer, dashing hopes of a quick recovery from the global trade recession earlier this year and heightening fears that the six-year economic expansion may be on its last legs.

Freight rates for container shipping from Asia to Europe fell by over 20pc in the second week of August, even though trade volumes should be picking up at this time of the year. The Shanghai Containerized Freight Index (SCFI) for routes to north European ports crashed by 23pc in five trading days.

The storm in the shipping industry comes as the New York state manufacturing index for July plummeted to a recessionary low of minus 14.9, the lowest since the Great Recession and one of the steepest one-month drops ever recorded.”

So…one would think markets would crash on more suspect news but nah…they rally. The simple fact is markets continue to like bad news as it means print print and print with 0% rates forever…and that’s been the name of the game.

But who cares? The markets don’t seem to. Last Wednesday’s strong reversal continues to hold sway with some more improvement in Monday’s action. Monday opened horribly but when the crappy number came out, reversed quickly. Go figure!

There was improvement in most of our favorite areas including housing, housing-related, airlines, biotech and a few others. Many names are tracing out long bases…as they mimic the major indices. More breakouts equals higher prices. We think we will know soon enough.