One More High For The Market?

There's a lot of chatter on the airwaves about the billion dollars - - a record - - that's going to have been spent on the 2012 Presidential campaign (let me save you the suspense: Obama is going to win in an electoral landslide, thus meaning the billion dollars was a total waste, and the POTUS is going to ramp up his plans for his risk-free final term in office).

The actual money spent by Obama to secure his second term is more along the lines of nine trillion dollars, if the money-printing bonanza by the Fed is any guide. I hope he enjoys his second term and that it's worth every penny.

One thing we can all agree (except for the blind among us) is that the impact of all this easing is getting weaker.........and weaker..........and weaker. Just look at the withering-away of the leaps tinted below. The frustrating thing, of course, is that with a permanent bid under the market, the "selloffs" (if you want to call them that) don't last any more than six days, tops. Just when it seems things are starting to rock 'n' roll, we flip back up again.


A lot of folks in touch with me seem to agree that we're in for Just One More High (even by a tiny margin) before we really roll over. Meh. I dunno. I've been assured that "a drop is JUST around the corner!" every few weeks for four years now. It never happens. Looking at the ES chart below, it wouldn't take much of a push to nuke the modest series of lower highs that the ES has painted out over the past month. We've rallied 40 ES points in just the past three days.

One of the key factors is the euro. We seem to have returned to "everything is totally fixed, for sure" mode with respect to Europe. If we cut through the descending trendline - which also corresponds to the highs of the euro set back in the middle of last month - that will just add fuel to the bull fire.

One area that seems ripe for weakness is precious metals (I am careful not to post such notions at ZH, as they go apopletic at such heresy). Gold and silver, both shown below, may ease back down to their breakout trendline, presenting what I think will be a great buying opportunity before the 2013 freakout.




Pretty much the last hope for any weakness still intact is the NQ (and, ipso facto, Apple (AAPL)). Recent strength has threatened that horizontal neckline I've drawn, but it isn't broken..........yet.