SP 500 and NDX Futures Daily Charts - Getting Sentimental

"Also, it was in 1987 the previous time the Investors Intelligence service said in its survey that Bears fell to 13. Today, Bears fell to 13.3 for the first time since then vs 15.1 last week. Bulls rose to 56.1 from 52.5 and the spread at 42.8 pts puts the difference back in the “dangerous” camp according to II. Above 30 is a “worry.”

I want to emphasize that this is not a timing mechanism and is just a SHORT TERM indicator but at least should put to rest the belief that this is somehow a ‘hated’ rally when bears are at a 27 year low."

Peter Boockvar


"Adversity makes men, and prosperity makes monsters."

Victor Hugo

I don't think that the rally is 'hated.' But I do think that the stock market and Wall Street have become generally despised and seen as fraudulent.

AAPL was a drag on the NDX, ahead of its new product announcements.  Everything in this market today smelled of profit taking.  And well it could be, given the rocket like bounce that the indices took off the end of the last wash-rinse cycle.

And for those who called me foolish in forecasting this bounce, how that's perma-bearishness working out for you so far? 

What we are seeing is a lack of genuine participation, moreso than any real bearish inclination to selling.  The volumes that we do have are short term, speculative, and lacking in substance.  'Vaporous' comes to mind.  'Contrived' is another good descriptor.

What this lack of real buying with conviction implies is that any exogenous event can trigger a serious market index decline as the hot money sublimates.  Unless of course there is even greater central bank intervention brought to bear than we are seeing on an almost daily basis today.  And if the Bankers fail to stem the tide, we could see something quite remarkable.

In the absence of an event, I would expect us to continue on with the status quo, the regular back and forth, wash and rinse rigging of almost every market as the pretenses and facades wear ever more thin.

It is very difficult to forecast a market break.  But it is quite possible to analyze the structure of the market, and to judge it to be inherently unstable and fragile.  'Prone to accidents' if you will.

The political and financial class are way out over their skis, with moral hazard and the colossal winds of hubris at their backs.   It is a question of what exogenous event may trigger the next great crisis, and who will the moneyed interests try to blame.

Still, there is plenty of money to be made in the great Alibaba IPO, due towards the latter part of September, and the midterm elections are coming. A market decline sans crash *could* favor the Republicans.  Obama should carry plenty of blame, but he is more a cousin to that crowd than they would ever care to admit beyond the theatrics of the political wrestling ring.

This current situation appears to be unsustainable.   But never underestimate the power of paper money in the hands of frightened, unscrupulous men.  

Have a pleasant evening.

The US Is In a Societal Panic: Why Our Tax and Economic Debates Are Irrational

David Cay Johnston is an excellent lecturer, who can address economics and public policy in clear and simple statements.

This is one of most informative talks I have heard about where we are, and how we got here, what the crony kleptocracy is, and how it works.

Johnston's concept of a societal panic corresponds to the notion of national hysteria which I have expressed on a number of occasions.  But he fills out the idea more fluently and fully.   It is a dangerous period of time which can yield new ideas and concepts, depending on how well we survive it.

It is a must watch, and I rarely say that.

Chris Hedges: The Rise of the Corporate Class and the Triumph of Managerial Malfeasance

“Antidemocracy, executive predominance, and elite rule are basic elements of inverted totalitarianism. Antidemocracy does not take the form of overt attacks upon the idea of government by the people. Instead, politically it means encouraging what I have earlier dubbed civic demobilization, conditioning an electorate to being aroused for a brief spell, controlling its attention span, and then encouraging distraction or apathy. The intense pace of work and the extended working day, combined with job insecurity, is a formula for political demobilization, for privatizing the citizenry.

It works indirectly. Citizens are encouraged to distrust their government and politicians; to concentrate upon their own interests; to begrudge their taxes; and to exchange active involvement for symbolic gratifications of patriotism, collective self-righteousness, and military prowess. Above all, depoliticization is promoted through society’s being enveloped in an atmosphere of collective fear and of individual powerlessness: fear of terrorists, loss of jobs, the uncertainties of pension plans, soaring health costs, and rising educational expenses.”

Sheldon S. Wolin, Democracy Incorporated

"Our corporate oligarchs are harvesting the nation, grabbing as much as they can, as fast as they can, in the inevitable descent."

 Chris Hedges