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Yo Spike, Where Did You Go?!



As Brian outlined a little earlier, Consumer Confidence was ahead of expectations -- by a why isn't "the market" up more?

· It was expected to be up and traders were clearly long positioned for it.
· The S&P 500 is up roughly 15% from the March 11 close, and despite nice earnings, "the market" is still not cheap.
· We won a war, earnings beat expectations, oil has tanked (pun intended), other geo-political tensions seem to be easing for the time being and fund managers are fully invested. With all this going the right way, what could bring in enough buying to push through overhead resistance? Ya got me.
· "The market" is at the upper end of the range, the Dollar Index is at the lower end of the range, and flowers are finally blooming after a long winter. Traders are looking to lock in a good month and go play some golf.

I could come up with more, but you get the point. I think this view is pretty consistent with what I have been suggesting: A move to the upper end of the range where "the market" would meet price and trendline resistance and reach an intermediate-term overbought condition. It is very important that you note I am saying "the market" in boldface and quotes because I do believe that the focus for investors and traders going forward is going to be on industries and stocks vs. simply buying or shorting the QQQ and SPY.

Frankly, I wouldn't short or just sell everything, because this is likely to be an environment where the focus is on individual names vs. the indices. I would say that tight stops on long market positions makes sense given the rally. I'd likely become more aggressive on the long side if "the market" either breaks out of the range, works off the intermediate-term overbought condition somehow and/or trades back to the lower end of the range.

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