I went out on a limb here last week with speculation that maybe, just maybe, the bull market was topping. Alas, the week ended with the usual lunatics in a buying orgy. My bearish hunch was based on technical factors, including a textbook head-and-shoulders pattern in IWM, a vehicle that tracks the small-cap Russell 2000. Unfortunately for permabears, the right shoulder, rather than collapsing, extended for five more bars, stretching its beautiful symmetry into asymmetrical dross, a rubberized Mona Lisa smile. Similarly, the E-Mini S&Ps seemed poised for a long overdue defenestration. It had turned down sharply the previous week after getting within an inch of a major ‘Hidden Pivot’ resistance. By Friday’s close, however, bulls we back in charge. In both cases, the chimpanzees who manage your and Other People’s Money provided much of the buoyancy. But when mere buoyancy turned incipiently ballistic around mid-week, the buying spree began to squeeze bears who are ever fearful of the next Pamplona next week.
With the Fed going full-throttle and Joe Biden outspending FDR by untold trillions, who would dare bet against the most spectacular asset bubble ever? Add share buybacks to the Guvmint’s explosive mix of monetary and fiscal derangement, and it becomes difficult to imagine how the bull market could possibly end. Apple’s announced $50 billion buyback alone is probably sufficient to give the illusion of solvency to Illinois’s bankrupt pension system, and to pad the resumes of half the chimps on Wall Street.
And yet, there was bitcoin, the most deranged speculative vehicle of of them all, acting like there might actually be a tomorrow. It has been bouncing around since early March, making engine noises like a dragster torqued to scream. But the amber light has been flashing
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Great thoughts