Miles High

“I’ve experienced the highest of highs and lowest of lows. I think to really appreciate anything you have to be at both ends of the spectrum.”

-John Elway


I was flying from Denver to Kansas City last night and had one of those nights where nothing went my way. This is the game and nothing teaches you how to play it better than the game itself.


Over the last few years plenty has gone right for my family and firm. For that, I am plenty grateful. No matter where I want to go this morning, the best place is to get right back to where I have always been – feet on the floor, starting from the lowest of lows.


Mile High Stadium stood in Denver, Colorado from 1948 until 2001. That’s where legendary quarterback, John Elway, played his entire career. It’s also where Denver Broncos fans sustained the world’s loudest roar for 10 seconds (October 1st of 2000 with a reading of 128.74 decibels). Interestingly, the hearts and minds of Broncos fans registered loudest after John Elway was gone. I’d say that’s because the image of the man and his teams never left.


Not many players in this game of life win at the highest level in what is their last game. John Elway did. After beating the Atlanta Falcons 34–19 in Super Bowl XXXIII, Elway was voted MVP in one of this world’s biggest games. That proved to be the last game of his career. He decided his fate. No one else. That’s something I can believe in.


This morning you are waking up to a US stock market that is Miles High relative to the lowest of lows in expectations. While this game tends to oscillate between both ends of the spectrum of greed and fear, the expectation of what is coming next is really what its all about.


To understand where to go in the market or in life, you truly need to understand where you’ve been. Otherwise you will have learned nothing and will not evolve. The SP500 closed up +0.07% last night at 1197. That’s what we call a higher-high. That’s also what we call bullish, until it isn’t.


This morning’s Institutional Investor survey (weekly) shows one of the widest spreads between “bulls” and “bears” since 2007. After the SP500 is miles higher than most would have expected, this is what we call a contra-indicator.


Before markets correct, institutional investors get either too bullish or not bearish enough. After markets rally, institutional investors fear missing the next leg up or getting squeezed. Most great players in this life don’t wake up living in fear. They wake up with a repeatable process that they can trust, and they carry on.


On a week-over-week basis, “bulls” in the Institutional Investor survey moved from 49% to 51%, while bears remained completely depressed at 18.9%. I measure the spread between bulls and bears across multiple durations, and anytime the spread in this data set exceeds 30 points, it’s significant contrarian indicator. This morning’s spread between bulls and bears, of course, is 32 points.


The only sad parts about being on the road is missing my wife and kids and having to endure watching CNBC. While I have the manic media channel on mute, the body language of it all can make any accountable American want to leave this stadium of conflicted one-way players for good. After cheering the market right off a cliff in 2007, then calling for a Great Depression at the bottom, right before a +77.1% rally – and getting bullish up here again, after the move… well, its just sad to watch.


This morning’s ABC/Washington Post consumer confidence reading confirms that our high-low society is indeed what Americans won’t cheer for no matter what CNBC pipes into their homes. This week’s confidence reading dropped from minus 43 to minus 47. This too, is just sad. This is the new America we have created.


The US stock market may very well be Miles High relative to the fear-mongering expectations of some who never saw the crash or the recovery coming, but it never forgets. I won’t either. Today is a new day, and everything starts from this price.


My immediate term support and resistance lines for the SP500 are now 1186 and 1204, respectively.


Best of luck out there today,



Miles High - Pic of the Day


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