See you soon, Kevin
"The bigger the headache, the bigger the pill..."
George Clinton/Parliament - "Funkentelechy"
Can you feel that? That headache coming on? It's not yet opening bell and Red Dye Junction residents are already feeling that dull ache at the base of the cranium, the kind of pain that floats in small, practically unnoticed, but by the end of the day is staging a throbbing, full-on operatic performance for the back of the eyelids.
Meanwhile, the celebration in Matador City continues...virtually unabated.. What was the deal with that down time back in March and April anyway? Apparently nothing (SPX) 1192 and a bottle of Maker's Mark© couldn't fix. Maybe it really is true, the bigger the headache, the bigger the pill. And no question the Fed is capable of producing some sizeable pills these day.
Still, Boo is aware that the nature of the game has changed. The context has shifted, at least partially. The primary bullish percent indices I follow to evaluate market conditions have turned positive. The NYSE Bullish Percent Index is positive now for the first time since March 23. Only the Nasdaq Bullish Percent remains stubbornly negative, that despite the fact that since April 20 the NDX is outpacing the SPX nearly 10 percent to 5 percent. (Some of us in the technical analysis business might actually call that a negative contextual divergence.)
So, like Robert Johnson once, a long, long time ago, Boo finds himself at a crossroads of sorts. No deals with the devil to be made here, however. There are no shortcuts in this game, only discipline and patience. Context is one piece of the puzzle, but timing is everything. With the short-term pieces stacked precariously high, the slightest hint of an ill-breeze could scatter this house of cards.
A month ago, Hoofy was pacing like a caged... er, bull. Now, having been turned loose in the area, he has the upper hand. I wrote last Thursday that while the big picture clouds remain, the short-term forces of supply and demand are almost always strong enough to overcome even the best macro thesis. Remember, it's illegal for a motorist to hit a pedestrian, but when you're walking it's still best to look both ways before crossing the street.
As you read this I'm en route to make a Mothership Connection with the critters at Minyanville Headquarters. I hope to be manning the co-pilot's seat with Collins by the time the opening bell rings in New York. Take a deep breath, focus, and hit 'em hard, we've got a full five-day week in front of us.
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