Thursday, February 16, 2012

Market Rips Higher on Economic Data!

Another good day to ignore the Black Box! Stocks went higher on "positive economic data" today, combined with lowered tensions in Greece and a potential European resolution on Monday.  

The US economy saw initial unemployment claims fall to the lowest figure in 4 years!  Housing starts and building permits exceeded forecasts.  The PPI was tamer than expected, coming in at .1%.  This is all good news for President Obama in a re-election year.  Who wants to run against a recovering economy?  Maybe it is all pumped up by stimulus dollars and low interest rates, but it is what it is.  Folks are feeling better about things.  And people vote their pocketbooks, right?

The Greek bond redemption in March is getting closer.  Greece needs some bailout money.  It seems like this is an ongoing crisis, but the world is hoping that there will be some resolution next week.  Europe was trading down today, but the US markets seemed to be unfazed by any concerns.  Today, anyway.

So far, the Black Box has generated about 4 sell signals since January.  The market continues to move higher despite the red sell arrows generated by the Black Box.  It's not unprecedented.  Just last January-February it did the same thing, and the last time it was right heading into a March low where it nailed the low with a buy signal.  The market curiously looks a lot like last year.

I remain 80% long, and mostly in high-beta stuff in the Nasdaq and small caps.  I thought about selling this morning, but decided not to react just yet.  The market top tends to be a process more than a single event.  Part of the process could be volatile days where the market starts to move back and forth without making new highs.  Maybe we're starting that.  Even if that's true, there usually is a double or triple top in the process.


Lin-sanity.  The New York Knicks are 7-0 since Jeremy Lin started playing as a starter, right?  Last night the Knicks pasted the Sacramento Kings.  The local newspaper had an article about the Kings strategy for shutting down Lin.  Apparantly, the strategy was to get behind by 30, so that the Knicks would take Lin out of the game.

It worked, and the Kings only lost by 15.

Nice job.

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