Market Action: Drearily Predictable

Macro Man feels like he's channelling Star Wars. Yesterday's action was drearily predictable, with the poor GDP figure met with risk-asset buying, and the Fed non-announcement met with more risk-asset buying. Oh, sure, the Fed said that they were gonna keep rates low for an extended (is that longer than "considerable"?) period. Of course, the eurodollar strip steepened, so it's not exactly like that was taken at face value across markets.

In any event, a number of risk-asset charts are looking pretty compelling. Spoos are currently trading well above the congestion zone around 870-875, the dollar's broken down, and stuff like the Ozzie, after a recent period of congestion, has broken both its recent high and the3 200-day moving average (for the first time since last August).

It all looks really quite bullish. So Macro Man finds himself feeling like Luke Skywalker...trying to maintain his fundamental convictions, but feeling tempted by the increasingly attractive delights of the Dark Side. While some market cheerleaders are more Jar Jar Binks than Darth Vader, a number of people whose opinion Macro Man respects are bullish.

At the same time, tomorrow brings a change of month, and with it a sharply deteriorating seasonal for equities. What's a punter to do? Is it worth embracing a Dark Side, even just a little, while planning to revert to type at the appropriate time? Hey, even Darth Vader came around in the end....

Comments

[Old Trader:]

How did that saying go?...something about the market staying irrational longer than you can stay solvent? Seems to be appropo..

Apr 30 09:15 AM

[SW Richmond:]

If you won't know when to sell, how can you know when to buy?

Apr 30 10:23 AM

[Roger Knights:]

"What's a punter to do?"

Sell in May ...
... and fight again another day.

Apr 30 10:39 AM

[TTT:]

The market is certainly testing the human emotions right now.

Apr 30 10:45 AM

[The One Thing:]

Right now the Wall Street spinmeisters are slanting every piece of data as positively as possible in order to try to blow out those shorts with conviction 870-875 would hold and those that put on bets yesterday believing it would. Add onto the end of the month...and no one cares about the data, swine flu, or anything Joe Biden gaffes about. The market might continue to drink the cool-aid for a bit longer, but I sure don't know what all the optimism is about.

Apr 30 10:50 AM

[conceptwizard:]

Curious how this chart looks like an "L" shaped recession.

Apr 30 11:38 AM

[Larrysyr:]

I think the recession will look more like the Verizon logo - sharp down, gradual up, though Verizon is a little more optimistic than I am.

Still, where's the correction?

Apr 30 12:24 PM

[Fred Voetsch:]

"The market is certainly testing the human emotions right now."

Exactly. Do you have the discipline to do what your HEAD tells you?

...most do not and that is why most lose money in the stock market.

Apr 30 01:31 PM

[Market Sniper:]

Value investing is dead? Buy and Hold investing discredited? What is next..death of the Swing Trade? Only ones left then are Day Traders. Trade what you see, not what you think. Only price pays.

Apr 30 10:09 PM

[Takayama:]

This rally is normal long term recession behavior. Expect another bottom this year.

May 01 02:16 AM

[Takayama:]

This rally is normal long term recession behavior. Expect another bottom this year.

May 01 02:16 AM