“You using the whole fist, Doc?”
- Fletch

With the market moving at a feverish pace, it sometimes helps to get a professional prognosis. Along those lines, Dr. John Hussman shared some salient vibes in his morning missive, offering, among other things,
 

"The (current) market recovered by an almost identical percentage following the 1929 crash, peaking in April 1930, after which it suffered a subsequent decline to fresh lows. The point here is not that the same outcome will necessarily follow in this instance, but that we would be remiss not to consider the fact that investors were equally cheerful in early 1930, when the front page of the Wall Street Journal featured an article entitled “A Turn of the Tide Near” assuring investors: "It cannot be imagined that the wholesale failures and interest defaults characteristic of earlier depressions will now be repeated. Confidence in our banking system wholly precludes the money panics of former eras."

This jibes with two columns penned last week, when we asked "Will the Consensus be Right" and urged Minyans to Question Conventional Wisdom. While markets can stay irrational longer than most can remain solvent, I would be wary of buying into the new paradigm GSE (Government Sponsored Euphoria).

Indeed, if I told you in March that the world equity indices would be 50-60% higher in six months, you most likely would have viewed our current price points as a gift.

I’m not saying we can’t continue to climb, mind you, I’m simply offering fresh perspective as we find our way.

Some Random Thoughts:
 

• NYSE internals are 2:1 negative despite the early (intuitive) Snapper attempt. That, coupled with the traction in the dollar, gives Boo some ammunition as begin a fresh five-session set.
  
  
• Seeing both sides, some financials (Citigroup (C), American International Group (AIG), Morgan Stanley (MS)), a slew of semis and select beta (Google (GOOG), Research in Motion (RIMM)) are stubbornly sticky as option players shake off the expiration hangover.
  
  
• Professor Jason Goepfert notes on his excellent Sentimentrader website that the speculative options activity index is now at an all-time high. As I mentioned last week, there's a huge difference between being bearish (as many pundits are pointing to) and being short (as few funds actually are, according to my channel checks).
  
  
• Discipline must always trump conviction, which was an expensive lesson learned in 2003. I continue to sense lower levels ahead (and will operate with that in mind) but through the lens of risk management, the next tangible resistance doesn't come into play until S&P 1120.
  
  
• The doors to the 2009 Minyanville Festivus to benefit The Ruby Peck Foundation for Children's Education have officially opened! We pride ourselves on the company we keep and would love to keep your company on Friday, December 4th in NYC. Come one, come all and let's celebrate the journey for a most worthy cause!
  

R.P.