The “shock and awe” of it all may very well have left even Larry Kudlow bearish! Where did all the Bulls go?
I remember those days of the Perpetual Bulls calling for these ZERO percent rate policies all too well. They called for “shock and awe” levels of free moneys… and now they are definitely getting what they asked for!
As the Buck Burns to lower-lows, we’re seeing stocks hit higher-highs. A clanging monkey can even make money being long this market now. Doesn’t this feel great?
Don’t get upset about it. Just do your best to respect that the math of the moment as it will continue to dominate any consideration of the long term. There is no long term in the Fed’s policy. There is only “shock and awe” associated with “exceptionally low rates” for an “exceptional period of time.”
The SP500 remains in what we call a Bullish Formation (positive TRADE, TREND, and TAIL) and it will be immediate term overbought at the 1107 line (dotted red). Provided that the Buck continues to Burn, it should continue to hold a higher-low of support at the 1079 line (dotted green).
If the 1079 line breaks AND we see a US Dollar recovery above the $76.59 line, that solid green line of TREND line resistance (1004) will become the ‘watch-out below’ line from what we have recently labeled the Minsky Meltup.
KM
Keith R. McCullough
Chief Executive Officer
