Since March 29, I’ve been pretty vocal in a Bear call. And to be brutally honest, I do not place a whole lot of faith in recent government statistics on GDP, NFP or CPI.
That said, there’s a simple rule that must be honored: Don’t fight the Tape.
I can give you dozen’s of reasons why the NFP was as artificial as NutraSweet, why a core CPI is only relevant when Joe Consumer has no energy or food expenses, and why the GDP data is a farce.
It matters not a whit. The lines have been crossed, and the underlying strength must be respected.
Doug Kass has an entire missive explaining why the unwinding of home prices could prove as grave in 2006-08 as the bursting of the stock market bubble in 2000-03.
And he’s probably right about it. There’s a disaster looming out there somewhere — I can practically smell it. Still doesn’t matter. When the underlying trend shifts, as it decisively has, you must adapt to the market — not the other way around.
Sure, Leading Economic Indicators are down for the 4th month in a row; NY Fed, as well as Philly Fed, were both appreciably weaker. Its only background noise.
Looking at yesterday’s data, the Nasdaq’s volume was the best looking of the group, and I expect that’s where most of the gains will come from. I’m still deploying cash tentatively. My stops are a little tighter than usual, a few points below our prior levels of 10,400, 1,181 and 2,000. As the markets move higher, I am moving them up to breakeven, and then higher still.
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.