Wednesday, March 6, 2013


I won't get into explaining, justifying or denigrating the new high on the Dow. You've seen plenty of pundits do it already so let me talk about what the market "feels" like today.

An analogy:

You are driving on a four-lane highway somewhere in the outer reaches of the local city radio station. There is not much around except for an occasional mulch farm and a billboard saying "turn right in 10 miles for XYZ hotel." Perhaps it is mountainous and your car is struggling on some of the steeper hills but you are chugging along most of the time near 80.

Up ahead is a slower car. You gain on it slowly so it is probably doing about 75 - certainly not that slow but slow enough where you want to pass. It is also fast enough that it takes a lot of time to accomplish. He seems to be speeding up. Your leg is extended, foot forced down on the gas pedal, but you are really only picking up a few yards per minute.

Is this guy racing me? Why?

After what seems like an eternity, you push ahead. Space opens up between you and the other car. And then more space. And more. Soon, the other car is a shrinking dot in your rear view mirror.

What happened? Did the other driver realize he was not going to stave you off and just gave up? Was he toying with you? 

That is what it feels like now that the Dow has finally pushed through resistance. It took forever to break out once the Dow got close but the deed is done. The bears seem to have given up. Capitulation.

Isn't it funny that the cop hiding around the next bend to nail you for speeding is called a bear (smokey the bear) in CB radio lingo?

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