The open question per the Dow 30 is how much further into record territory might the index rise? The best answer really is a rhetorical one: who cares? They're all wildly overpriced and backed by an illusion impossible to sustain. Indeed, when you see the likes of a Goldman Sachs putting its weight behind Ron Paul's hippie brother, Beppe, in Italy, you get a pretty good idea there is absolutely no intention of sustaining much longer the fantasy of the trans-Atlantic banking system's solvency. Which begs the question: do crackpot wards of the intellectually bankrupt LSE really think an artificially resurgent fascism in Europe will not be violently resisted only sooner in this second go?
A highly suspect backdrop lifting the Dow 30 to a new record is but convicted a fake by broader measures of the market's technical state underpinning an asset class with all the precious qualities of tulip bulbs...
Oh boy, the dull shine on trash sure makes a poor statement of values the American financial machine assigns to the pleasure of owning it. That there is a picture of disaster in waiting.
Those who say, "Don't fight the Fed," evidently aren't taking their own advice. Likewise, it is becoming increasingly difficult to hide this fact, as fast fading participation in extending the levitation of garbage listed on the NYSE amply reveals. Appreciating both what selling restraint was necessary since mid-November 2012 bottom to achieve the price markup we have seen since, as well as the hopelessly bankrupt position of those institutions behind this effort, we have every reason to suspect the trap that was set is only closer to being sprung.
Confirming this probability is a picture objectively revealing the state of animal spirits at this advanced hour finding Daddy Dow drunk on public adulation...
While the NASDAQ Composite reaches a 12-year high, its underlying state is stuck on Halloween. NASDAQ's is a dreck-led rally whose Daddy Dow can no longer afford spreading the wealth. What little there is to go around is too busy sustaining illusions much higher up in the capital structure, while a burgeoning contingent of believers in fantasy being supported by trapped lenders of last resort are left to pray their piece of tech garbage might soon move to the front of the parade.
The market's lift off the severe air pocket it hit during last Friday's open likely either ended today or is but moments away, not much higher from today's peak. Yet we might suppose, too, any imminent drain is likely to be fairly subdued over the near-term. A lot of effort has gone into supercharging glorified cheerleaders whose job is part of a machine fleecing suckers. Driving these marks are ever short memories probably finding today's renewed excitement simply irresistible.
On this note, too, we might likewise suspect wave 3 of (c) of a "rising wedge" up thought forming in the S&P 500 off early-June 2012 bottom rather completed today than on February 20th, or is very near reaching completion. In fact we should refrain from supposing completion of wave 3 of (c) and initial transition into formation of wave 4 of (c) could not find the market virtually going nowhere over the next week or two. The market's poor underlying technical state being a given, there is enough reason to think this condition could persist for some time longer before pressure like we saw last Friday at the open raises likelihood wave 4 of (c), indeed, is in the midst of forming.
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