All Hail the Neo-Commodore! ~ The Risk Averse Alert

Tuesday, July 02, 2013

All Hail the Neo-Commodore!

Evidently there is a new Fed program venturing to blunt the likely negative effect of QE tapering. It's called "Assets Sweetly Supplicated Liberally Increasing Confidence Karma" (AssLick) and was beta tested this evening when Charlie Bobrinskoy of Ariel Investments took to CNBC's "Fast Money" boldly claiming Jamie Dimon the greatest banker since J.P. Morgan himself! No word on how much more time and magic might pass before JPM shares end their 15 year flat lining trend accompanying the Neo-Commodore's tenure.

Suddenly the bull market in farm land is making a great deal of sense! One might rather project all that banking prowess probably is currently attempting to corner the market in goat pastures. By the way, how's the tin market these days? Buoying the CRB index while gold is subjected to reverse alchemy propping up currencies massively debased by liquidity needed to buy up farmland on the cheap?

It was the S&P 500's Bullish Percent Index alerting us in May that, everyone was "all in," making odds of a melt up rather small. Yet at that time, too, we were anticipating this measure's rollover in negative divergence with the S&P 500, as the benchmark prospectively rose to nominal new highs much like occurred at May 2011 peak and March 2012 peak after that. Well, we can cancel this outlook and rather suppose the S&P 500 already has seen its high. The S&P 500's Bullish Percent Index decline below its 200-day moving average is ominous indication that, not only is weakness increasing, but the floor under the market is at greater risk of giving out.

We might take notice here, though, that at successively higher S&P 500 lows established this year—first in February, then in April, and finally, now—the S&P 500's Bullish Percent Index fell to lower coincident lows, only to see the market turn higher subsequently. So, in keeping with this trend we might see the S&P 500 remaining buoyant here, even turning higher and considerably challenging its May peak, while its Bullish Percent Index likely remains below its 200-day moving average. This could set up the market's decided move lower along lines detailed here yesterday.

Word on the Street
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