I’ve received a lot of inquiries about the ‘markets’ latest price action on Friday. It would appear “up-up-and-away!” is the general consensus from all of them, along with subtle hints that maybe I’m being more Casandra than true prognosticator. It’s a fair point for we all can, at times, find ourselves looking for data or other signs to prop up a faulty argument rather than make a better one.
Trust me, I’ve done it more times than I would like to admit, as I’m sure you have also. However, if one has been honest in that statement what you’ve also done is try to do better or, at least, contemplate the possibility honestly in real time. This is one of those times, not for my arguments – but for the other side.
I list a few pertinent points below for those on the “other side” as I say for your contemplation. Why?
Because I already have and stand by my thesis. Does yours still stand if I ask…
- If the economy is so good – then why are only five companies (e.g., Apple™, etc.) responsible for nearly 80% of the entire gains in the ‘markets?’
- If the banking crisis has been settled – then why is the Fed’s emergency bank bailout and funding facility increasing, setting new records near daily?
- If the stock ‘markets’ surge was based on a rate hike pause for June, as the entirety of the mainstream business/financial media has harped ad nauseaum – then why did it surge even higher Friday when the jobs report clearly showed a pause should be shelved and at least one more should be baked in?
Those are just three. Now when it comes to a view via technicals? As I stated prior – from that viewpoint there is just as much possibility for a break higher as lower. The observational point I’m imploring is that if it does break lower, with all the other technical implications that are too long to list – it’s the severity of that break and its implications that needs to be considered.
That’s not Casandra styled analysis, that’s called: prudent. Something that appears to have been lost on far too many, going now for far too many years.
So here’s a final point for your consideration regardless of what side of the critique you stand, and it’s this…
Remember how I always caveat much of my positions with the following?
It’s about the human condition, the behavioral aspect that means far more than almost anything else to consider in your calculations. And if you do, you’ll be far more prepared for what may or may not happen than those applying a purely academical argument.
Now with that said…
Ever hear of the “headline/magazine cover curse?” If not it goes a bit like this…
Just when there’s enough palpable sensationalism felt that either a magazine or news outlet of size feels the need to try and front-run or capitalize on it for viewing metrics and sales – it’s usually the time to mark the calendar when exactly the opposite is about to unfold.
So with the above I’ll leave you with one I saw last night (e.g., Friday) at none other than The Drudge Report™. To wit:
So about my argument, what to think next is entirely up to you, as it should be.
© 2023 Mark St.Cyr
Note: This is not trading or investing advice of any sort. This commentary is for “big picture” discussion purposes only. Please read, or re-read the “About This Site” page for any questions or clarifications.