So here we are nearing the end of Q1 with a Holiday shortened week in the US. With many schools out on Spring Break and families on the road for Easter Week, I think we might want to expect lower volumes even as this exciting quarter comes to a close.
Had you fallen asleep the week before Christmas and New Year’s, and awoken over this past weekend, you would have assumed nothing happened at all. How wrong you would be : )
After being told for weeks how horrible this entire year would be after the “worst start in 80 years”, we now have to reconcile the best recovery within a quarter in 80 years! Almost funny right?
Hollywood could never write the script we have lived in the last 90 days. To suggest the gyrations have become emotionally ridiculous and unnecessary would be an extreme understatement.
Be that as it may, we never want them to stop.
Yea, But Now What?
Under the tagline “what have you done for me lately” it is becoming clear that the natives are restless. We have begun to witness the crowd form a mass anxiety process. We fret over the end of the world, we fret over the delay of the end of the world and then we fret over not knowing what happens if the end of the world is not here yet.
It has seemingly become a self-fulfilling, never-ending cycle.
The rally off the lows has clearly repaired a few sectors – and even made up for some of the “technical damage” done to the market, and espoused by many talking heads” during Q1. I heard so many stories about head and shoulders and trend lines that my own head was spinning.
Keep in mind we showed you in previous video reviews that the widely followed “technical factors” tend to quickly have the opposite impact – which, of course, leads to another pattern.
For now, we have run smack into the middle of the last level of resistance one might expect to push back some against the momentum of the rally.
Surely helped on by Ms. Yellen last week, passing this test will likely be perceived as very bullish for the masses. Afterward, the HFT guys will have no choice but to start to play the trend – and the short-covering levels set to fuel more upside.
Keep in mind though, the market needs to prove it is ready for that breakout we have been suggesting we patiently await. Until then, the rules are the same.
We should continue to recognize setbacks as beneficial – and not something to fear.
This week might not be the best week to accomplish this task.
Indeed, pretty soon, we will need to respect the next step in the calendar as the “sell in May” hype is just around the proverbial corner.
I must admit I am really, really looking forward to that this time around. I suggest we focus deeply on the idea that we want the crowd to do just that – sell in May and go away.
It gives us one last chance at some good deals at these price levels. Then, after the summer doldrums are left in the dust bin of time, I suspect we start a very lengthy upward trek which will surprise even the most bullish.
As we stated here weeks ago, this has been bear hunting season….and it has been pretty good.
That said, I suspect after a pushback or two – or maybe even three – it gets even better.
Political Backlash Continues
Media is slowly shifting its focus. Seems the search for the bleeding lead story is running into its own problem: the end of our economic world for a myriad of tired out reasons is refusing to arrive. As such, the rather nasty political picture is now the focus.
We are witnessing history. For the first time that I can recall, the guy out in front is about as far away from a career politician as you can get. Man is that causing an uproar – even from the pools of money more accustom to being able to buy power, position and favors through funding of PACs and other big donations.
The media coverage is focused on the bad side so much that it reminds me of the 60’s. One can easily be concerned that all of the fights and protests mean some terrible outcome awaits us. After all, if we don’t have to fret over the end of our economic world in the markets (for now), then it must be coming at us through all this political unrest. No?
As our colleague Ken Gronbach, the leading expert focused intently on the significant demographic trends unfolding in America today highlights, the cause for all the unrest is more simple and yet dynamic:
Ken suggests we view it from this perspective:
“Imagine a line left to right that represented people 0 to 100 years old.
You have extreme liberals on the left who are young and have nothing to lose and extreme conservatives on the right who have amassed wealth and don’t want to share it. In between you have moderates who buffer the extremes economically, politically and socially. Life is good.
Now, significantly decrease the critical mass of the middle age moderates limiting their power to buffer. What do you have? The current United States political arena, unbuffered extremes.”
It sure does provide a better perspective for all – something to soothe the fears that what we are seeing on the screens is all bad for us.
It is not – in the long run it is a spectacular part of the shifting landscape.
A landscape which can be extremely opportunistic for those who understand it is unfolding under all the noise…..and preparing the pathway for massive opportunities ahead.
Speak soon – we are working on the Q1 summary video review and will have that out as quickly as we can after the Q1 data are summarized and prepped.
Until then, let’s pray for some more setbacks at this resistance level.
They are good for us. Not bad.