CRAPPY ECONOMIC NUMBERS AROUND THE GLOBE = HIGHER STOCK PRICES!

Again, crappy economic numbers around the globe seem to be leading to higher stock prices. Simply put, whatever amount Yellen has lowered printing, the ECB is now picking up. This is on top of Japan and others. Also, do not forget, we are still printing and as far as we are concerned, we expect no interest rate increases unless the market forces the issue. In the past, all it took was a lowering of rates to keep markets moving higher. Now…it is the printing of trillions of dollars and negative interest rates. We remain in the camp that there are going to be eventually, huge huge huge negative repercussions…but we are not there yet as major indices continue to act fine.

 

In fact, a close look at the Dow shows a v-shaped cup and handle pattern that looks poised to move above range. We are seeing new names in the Dow starting to move out and that can’t be all bad.

On top of that, there seems to be no give in the NASDAQ/NDX. Readers of this column know how much weight we put on these areas.

But we must warn once again. Everything we started to write about approximately 6 months ago are still in play and that is all the action we have been seeing smacks to us of a late stage bull market. But we don’t want to cut the late stage off at the knees as the late stages sometimes are the most rewarding. Do I hear 1999? These characteristics include:

Tons of IPOs…and now tons of IPOs with no sales. Yes…no sales.

Tons of secondary offerings.

By our measurements…no bears. We are not talking about the permabears.

Margin continues to skyrockets.

Junk bond yields at numbers never seen in history.

No 10% corrections in a couple of years.

A major league new high divergence indicating fewer and fewer stocks moving the market.

SMALL CAPS woefully underperforming.

But all that is for down the road. We just do not know when down the road is. Right now, not many complaints.