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Mothership Connection

By

See you soon, Kevin

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"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.

Position in SPY.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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