(Scroll down if the linkfest is all you’re after. Herein there be rants.)

Technical analysis is a fascinating discipline, for its all-or-nothingness. Friday’s dull action (after a furious open, anyway) ended up with an insane close. Problem is, if you’re a technical dude(tte), you must incorporate what is unquestionably a very unusual moment as if it were just run-of-the-mill. This is so damn stupid. Let’s say I’m an investor with ten billion bucks or so on the sidelines. If I pick one split second, and bring that ten billy in just plain ol’ basket/market/futures buys, I can wreck all the charts. Yours, and yours, and yours and yours and yours. Meanwhile, if you’re a TA dude(tte), you just shuffle your charts, redraw your trendlines, and go, “Uh-huh, uh-huh, look what the charts just did. Revelation!

Before I get to the this weekend’s many analyses, I’m gonna make one last case for sanity vs. tape. This is not the moment, no doubt–we are, and have been throughout this calendar year, in crazy market times–but this is very near the end of that road. Various huge trendlines doing the lightsaber thing, etc. etc. The comforting thing for someone who has felt as wrong as I have for so long is that this coming week or so, we either (a.) get wrong at a hyperbolic level, which can’t be fought because it’s hysterical idiocy and mob rule and you either get dragged along or trampled, or (b.) we give up on the idiocy, in a temporary-but-with-conviction way. There is no more “Uh-huh, uh-huh, let’s just push along.” Even I, at this overlate date, would prefer a decision.

Meanwhile, here’s my last, last, last plea for reason. A lot of people–better traders, and smarter analysts than Unexpectedly, Inc. employs–will tell you that this rally could keep on rallying just cause it hasn’t broken down, and now it has “been basing”. May was a “consolidation month”, and blah and blah and more blah. The problem being, we have built, and continue to build, a tremendous castle in the air, whether the macro way or the TA way tempts your faux-samurai soul. I shall label this period “freebasing”. Bull market? In the wettest dreams of the weakest mutual fund managers could this be the case. Power bear-market rally? You bet. Huge. Stupidly huge. Anyone who tells you they knew it would be this huge and they rode it the whole way is, by necessity, a fool. This “wasn’t supposed to happen”, any more than the January-February breakdown was. Any more than the previous rallies in November and January were to fail. And so on, and so on. Problem with this current rally blob is, in the intermediate term, it could double this hugeness of error. Wrong side of that trade? No thanks.

But it’s really very simple to think through: if you “consolidate” for two or three weeks off the blow-off top of an overcorrecting few-week bounce that did not for even three successive days pause to consolidate, you consolidate on nonsense. Can the markets push higher off of nonsense? You betcha–America adores nonsense. We have enshrined it via application of a technology we call “television”, and one thousand assorted derivative products you can’t blame on Wall Street (not to mention the hundred or so proudly offered at Street HQ). Will I throw in my long-ailing shorts and hop on the idiot bus? Short-to-intermediate term, why not? I already carry America’s idiocy obsession home with me, eight nights a week.

But if the market gives said idiocy its stamp of approval, I will henceforth do so with tremendous sadness, and it has nothing to do with the “money” I’ll “lose” from temporarily giving up “intelligent” trading. This market is in every way a failure of measurement. Of anything, and while traders love to blame the government, I see no reason to blame anyone but the traders. Friday’s ginormous stick close is the cherry on the faux-cream top of the no-fat ice cream sundae of nonsense tape meant to be swallowed whole as gospel. We are long past any sort of transparent, accurate measurement of any sort of actual economic activity. We are trading against each other, big vs. small, small vs. miniscule, nothing vs. nothing vs. nothing.

This is pretty egregious, because the anti-government, pro-market forces that never STFU in tradingland would claim that markets know better. (See: like, every post on this blog.) We have a market that, for months, has acted the part of the idiot child to perfection: As the news got worse, it exaggerated the worseness, and as the news stopped getting worse, it freaked out, peed itself with joy, pounded the pee into a commodity, and is now hiking trow to pee down the other leg.

Someone, some day, is going to have to do the laundry. Once again, people who spend their days working and not watching the so-called free markets at their quaint little circle jerk stand to lose the most, via passive investment managed by people who just don’t give a fuck as long as they get salaries, bonuses, and bad haircuts to match their sizzling Docker-Oxford combos. (Make sure your belts match your shoes!) What is so humorous about this is the way these same market-watching, market-loving managers who–seriously, they’re like $GM employees–really just don’t give a fuck about “productivity” (find that in their job descriptions) whine and kvetch about growing deficits, failed government, blah blah blah without adding any insight, as if they-the-Street were keeping their own house in perfect order, only to be failed by all around them in a great travesty of  economics pillaged at the hands of… of… AAAGGGGHHH!! CONSPIRACY!!!!

You, mutual fund manager, program trader, Wealth Manager, Algorithm Man, are the great travesty of failed economics. Sit around in your “pit” or in front of your “Bloomberg terminal”, making your oh-so-meaningful “buys” and “sells”, and keep on moving those markets or watching your golf buddies do it, yelling at everything and everyone else all the while, especially anyone who might find your artful and endless tax dodges less than honorable. Everyone is listening to you, at least very, very temporarily.

The failure to accept responsibility is an across-the-board problem, unsolved by Wall Street or Main Street or Any Other Damn Street you can name in the Grand Ol’ U. S. of A. today. Tomorrow, June 1, 2009, we will point at what the markets do–we will cite that action in our newscasts and hourly briefings–and we will comment on it, as if it told us something true. Yes, as the bloggers keep drooling, it’s the curse of Interesting Times, and while some people can sum that up eloquently, it’s also the most facile cliche available to an uncreative mind in the face of the greatest opportunity for creativity–financial, economic, political, or otherwise–we have seen in two or three generations. Instead, we have the finest alignment of trader-thinkers all sitting around going, “Well, we go higher from here, unless we don’t,” in vast useless money-making/-losing chorus.

We have no truth left. Put that in your tape. Play that for a fabricated dollar or two. May you live in speculative times.

Without further ado, your recaps:

  • Tickerville (video chart analysis, ~20 mins, a great session, seriously–highly recommended)
  • Posse/FINZ.tv Trade Journal (charts plus comments, new, see rant above)
  • The Chart Pattern Trader (video chart analysis, ~30 mins, sounds like it contradicts most of what he said all last week, but hey, “interesting times”)
  • Cobra’s Market View (charts plus comments/rules)
  • Market Talk (summary, no charts, might be four sentences this time around. They sometimes have great synthesis; apparently this week they had a beach date.)
  • Random Roger’s Big Picture (video investment-oriented thinking, very macro, still smarter than you, ~6.5 mins)

Good luck out there.