A Day Made for the Clinically Insane ~ The Risk Averse Alert

Wednesday, January 05, 2011

A Day Made for the Clinically Insane

Today's large cap performance disparity was a most fitting display for an asset class whose present attraction remains far more technically driven than founded on what are likely to become improving fundamentals capable of stabilizing the dam containing a great sea of debt filled to the brim while the securitization regime reigned supreme.

OEX 5-min

As has been true since March '09 bottom, a relative handful of issues did the heavy lifting today while the broad market lagged...

NYSE 5-min

Most telling was the sector behind this disparity. It speaks clearly of the strictly technical nature driving the bid presently underlying the U.S. stock market...

XLF 5-min

Ah, the moribund, former masters of the universe! The walking dead laggards whose weekend at Bernie's convinces believers in "recovery" that, imploding debt markets are no match to a winking SEC and a mighty helicopter fleet whose reach even extends across the Atlantic! What fantasy.

Indeed, this group's leadership over the past month helps substantiate the view presented here over the same duration suggesting that, a rising wedge forming off late-June bottom is nearing its completion, and this likewise is seen finishing the market's counter-trend rally since March '09. How fitting that mass delusion should be on full display at a time when risk of grave disappointment is at its greatest ever.

Were only this conclusion a mere matter of conjecture unsubstantiated by the market's underlying technical condition! Then, I might shy away from suggesting Laszlo Birinyi appears clinically insane for his S&P 500 forecast of 2,854 on Sept. 4, 2013.

Were only more evidence of an ominous rising wedge forming off late-June 2010 bottom not all the more curiously present, too! Yet since the view in this regard put forward on Monday (and a couple weeks prior to that) remains intact, presentation further supporting it can wait until tomorrow...

Fast Money
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