Friday, September 21, 2012

The news vacuum noted in today's E-Mini S&P tout has caused the stock market to go flaccid despite the fact that these are arguably the most Interesting Times since the summer of 1914.  If campaign bilge continues to dominate the alleged 'news', expect Wall Street's week to end with a whimper.

All day long yesterday, Google featured campaign stories at the top of their news page. Can the editors finding nothing more interesting to talk about? Evidently not.  Assuming the nation's news editors remain in navel-gazing mode as the week draws to a close, we should maintain a bullish bias on stocks nonetheless as they continue to mark time.  This vehicle is working on a pattern that projects to 1497.00, but that's assuming yesterday's 1443.50 low holds as a point 'C'. More likely, especially in a continuing news vacuum, is a feint below 1443.50 to set up a short squeeze either Sunday night or Monday morning. That said, if boredom encroaches, night-owl camouflageurs will find ample speculative entry opportunities on the 5-minute chart.  You can learn to “camouflage trade” yourself.  Click here for a free trial to Rick’s Picks.

[The weekly column I freelanced to the Sunday San Francisco Examiner in the late 1990s was as relentlessly bearish as my Rick’s Picks commentaries are today.  However, the essay below, published in 1997, was a notable exception.  Its thesis was that U.S. companies both large and small were perfectly positioned to benefit from the emergence of a global middle class.  Alas, America’s manufacturing sector instead moved offshore even as our multinational banks bulked up massively on steroids. We now know that the world had no need whatsoever for a 'financial superpower'; rather, what it does need, and thrives on, are the tangible goods and real wealth created by such emerging economic superpowers as China, Brazil and India. We can only hope that when the U.S. banks’ inevitable steroid breakdown has run its course, the U.S. will return to making money the old fashioned way. RA] U.S. stocks have been in a scorching, vertical climb for months, confounding the bears and effortlessly vaulting the immediate expectations of the most ardent bulls. What factors might they have overlooked in gauging the market? Could there be forces at work more powerful than the steady earnings growth and low inflation usually cited as key reasons for the longevity of this bull cycle, now well into its seventh year?  I believe so. A more plausible explanation may lie in the relatively recent and rapid emergence of a vast, global middle class, particularly in Asia, Eastern Europe and Latin America. To the extent this trend creates a burgeoning new marketplace for a wide variety of goods and services, U.S. companies stand to benefit the most, since they are indisputably the best in the world at meeting its demands. The point was driven home to me recently by news reports that the Malaysian government, with public and