Marketview: As Binary As Ever

The current personality of the market is to expend lots of effort and energy and not have much movement to show for it.  Despite the overall bearish tone amongst traders and investors the market retains a resilient bid.

The problem with the bull case has always been the binary nature of the world in the era of weaponized financial markets.  This is not a heads we win and tails we win less type bull market.  It’s a heads we win, tails we go into a deflationary winter with no end.  The high frequency economic data suggests the economy is slowing, the prudent position is defense.  Long-term indicators are clinging to the bullish side of the equation.  The market appears to be tipping its hand in their favor.

Questions remain: will the Asians truly save us all with their own brand of market incentive.   Will QE3 come and when?  Does the debt debate reanimate, shocking the market and allowing Josh Brown to make full use of @thefiscalcliff?  Is election year upside-hype oversubscribed?  Is there some other surprise around the corner that we haven’t even thought of yet?

The $SPX continues to act technically well and breadth is strong but the wrong sectors are performing.  Even the most die hard bull can’t deny that utilities and consumer staples redlining at 52-week highs might warrant some caution.  Not to mention long-term treasuries moving higher.  My feeling is that a lot more energy will be expended but the ultimate direction is higher.  How can anyone be making serious one-sided bearish bets when Dr. Bernanke has his finger on the QE trigger?  It’s only time.

While most of the more sensitive indicators have turned bullish, the most conservative MAMO oscillator remains depressed (mainly due to strength in treasuries).

Winners: $TGT, $WMT, $PG, $JPM, $WFC, $APC, $WMB, $SLB

Losers: $FCX, $CAT, $DD, $DD, $MMM, $INTC, $CSCO, $AMZN

As an aside, go grab a beer and listen to some #SummertimeRooftopPartyMusic:


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