With the Temptations tune playing in my head (Ball of Confusion, That's What the World Is Today, Hey Hey) I have to wonder who is more confused. Ben Bernanke who said today "consumer spending is set to sustain the economic recovery" right after last week's "unusual uncertainty." Or is it the market where once again we see a huge rally on no volume where most of the gain took place on the gap up open. Volume as I write this today at 3:30 NYT is on pace to just beat out Thursday's and there was a doji that day!
How about commodities? Risk assets are suddenly back in vogue. Crude oil soared on sugarplums of recovery dancing in everyone's heads but ugly, challenged step sister nat gas scored a monster bear reversal. Did the dollar getting crushed do that? See my story in MarketWatch today on the euro's resurgence.
I've seen reports on the market now entering wave 3 of 3 to the upside. I've seen reports of deflation. Of Dow Theory buy signals. Of death cross sell signals all over the stock market. Of Moody's warning of a downgrade of US debt. Greece and some of it PIIGS friends are rallying. Japan is falling. China releases bad news and everyone says it is good news. The TED spread is tumbling.
Air pollution, revolution, gun control,
Sound of soul
Shootin' rockets to the moon
Kids growin' up too soon
Politicians say more taxes will
And the band played on
So round 'n' round 'n' round we go
Where the world's headed, nobody knows
Just a Ball of Confusion
Oh yea, that's what the world is today
Except for the rockets to the moon line, these lyrics could have been written today instead of in 1970. How about this? The next lines are:
Fear in the air, tension everywhere
Unemployment rising fast,
So is the stock market doing its own thing? Looks that way. Let's just remember our job is to figure out what the market will do and not what makes sense in the world. My market sense is that August is going to suck too many willing lambs to slaughter before September comes in like a cat 5 'cane.