After pickpocketing widows and pensioners yesterday via a fleeting head-fake on the opening, DaBoyz turned Citi shares sharply south, wiping out half of the ill-gotten gains achieved two days earlier via a very nasty short-squeeze. The stock’s 2.5 percent drop does not bode well for the market as a whole, since the banking behemoth is the best proxy we have for the smoke-and-mirrors business that has come to define global commerce, such as it is, in the 21^st Century.

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We’d raised the prospect here the other day of a DJIA rally to 15,000, but our heart was not in it, as you may have surmised. In any case, we remain duty bound to look for even the subtlest sign that the bullish outlook has come a cropper. That’s what seemed to occur yesterday, when, even with the larcenous head-fake on the opening, Citi failed to pierce the 49.00 high made at the nanosecond apex of Wednesday’s short-squeeze. Had that number been exceeded, the stock would have created a promising bullish impulse leg on the daily chart. Alas, it failed to do so. Similarly, the Dow Industrials needed to surpass ‘ but did not — July’s 14021.95 high to revitalize a bull market that looked to have received its coup de grace back in August.

Extra Inch

Analytically speaking, the Hidden Pivot method we use shares a simple but very useful rule with Elliott Wave Theory — namely, that a correction is to be viewed as a correction until such time as its starting point has been exceeded. In this instance, were a DJIA rally to surpass the old record high by as little as 0.01 point, that would suffice to redefine the entire rally from mid-August’s low as a bullish impulse leg. But until such time as the new high is achieved, the current euphoria must be viewed as little more than a bear rally. Of course, new highs from these levels lie not more than a day or two away, and so we would not offer long odds against such an effusion. A 255-point thrust is all it would take, and we will therefore leave it to other bettors to cover the ‘Don’t’ line.

Meanwhile, and loathe as we are to invoke rationality in our analysis of a stock market so obviously controlled by demons, we should point out that the forces arrayed against bulls at the moment do not exactly constitute a virtuous cycle. To the contrary, we are seeing the dollar price of energy rise vertically so as to offset the presumed inflationary impact of Fed easing. It doesn’t take a genius to see that more easing, ostensibly to stimulate the economy, could cause oil to reprice itself so dramatically as to all but negate the Fed’s intentions.

But let us put all such grim thoughts aside for a moment, that we might offer heartfelt congratulations to our Canadian neighbors, whose currency (aka the ‘loon’) has finally achieved parity with the U.S. dollar. For the first time in more than 30 years, prices will no longer be ‘Slightly higher in Canada.’ We should perhaps also offer up a prayer of thanks that it is not (yet) the peso’s parity for which we are congratulating a sovereign neighbor. We can only hope that such depredations against the dollar as would cause it to fall so far have yet to be imagined.