I commented here yesterday on the feebleness of Monday’s short-squeeze, but yesterday’s rally was just as lame. The paradox in this kind of price action is that it can feed on itself, sucking in more and more bears who can’t resist shorting into the stock market’s tedious grind higher. Then, before they realize they’ve trapped themselves, a piece of ostensibly good news hits the tape and the short-covering panic begins. In this case, nearly all of the news has been bad, but not so bad as it seemed at the end of last week, when Baghdad seemed ready to fall to jihadi savages. Now it looks like the madmen may be headed into a disaster of their own, confronted by well-armed Shiite resistance not only from within Iraq, but by Iranian troops summoned by Maliki. This qualifies as good news, since it implies jihadists will be killing each other, with the U.S. able to either watch from the sidelines or limit its involvement to air strikes and drones. Toss in bullish employment figures on Friday, and the stock market could be bounding blithely higher as usual, for no good reason. We’ll be better able to predict what’s ahead when we’ve seen the Dow head-butt a ‘Hidden Pivot’ target with the potential to stop the rally cold. Click here for a ringside seat and a free trial subscription to Rick’s Picks. No credit card necessary.