I will be brief, because most of what has happened in the “markets” over these last two weeks is ununexpected, and if you’ve read this blog at all in its few months of “life”, you know I think it’s long overdue. The technicals look the worst they have since the rally began; the fundamentals continue to underwhelm, but may have caught that bid for the first time in months, for any number of unknowable reasons.

While we can scream along overbought for weeks on end, a lot of watchers are talking about a two- or three-day-old oversold signal as a signal for a bounce. What matters now is to watch whether this beginning of a correction is the real deal or just a temporary blip of fear on the way to further greed and nonsense as we try to close out 2009 as the year we fixed everything without doing a damn thing right.

Without further ado, your recaps:

And a few other links you ought to follow if someone hasn’t led you there already:

Be careful out there.

Advertisements

Ah, poor sweet neglected blog. Here, let me pet you some. Pet, pet, pet. (If you require no petting, or if you just want the recaps, scroll on down to the bottom there.)

While you, Fictitious Reader, have undoubtedly failed to remark my absence from the “blog”-o-“sphere”, being as you are non-existent, the explanation is pretty simple: there isn’t much need for a blog to discuss markets and tech and innovation and exciting developments in the world around us when the whole of this summer and fall has essentially been devoted to flying down a half-lane one-way road in a souped-up equity-market Maserati with reverse ripped out. The slight bumps? Those were ordinary people and interesting possibilities getting run over. Nothing to see here, keep moving, folks. That wall up ahead? It will dissolve, video-game style, as you cruise through it and pick up a bonus 5% of profit for… well, just for being in the damn car.

That’s right, we here at Unexpectedly, LuLzC haven’t see much to discuss, because we haven’t see much going on, and we sure as shootin’ weren’t in that car, or indeed anywhere near that road. Sure, I could add another rant about the gap between Streets Wall and Main, blah blah blah, or synthesize my many distinguished twitter posts (and the many more that are totally indistinguishable from thin strands of drool) into something to use up your time and mine, but why bother? These are, as I see it, some very sick times, and as tends to happen when illness is in the air, we all get a little sick of it (ha!), and slow waaaaay down.

So why break the silence? Well, there are some interesting technical and fundamental things going on this week. (Remember fundamental? Neither do we.) Earnings season was clearly meant to have us get up and go the way the last two did, but some of the big winners have charts no better than the week before, and darned if those $BAC and $GE reports didn’t sound just a little too late-08/early-09 for comfort. When was the last day max pain was inflicted on an OX Friday with violent downward action? Yeah, stuff is happening. Will it matter? Likely not.

The weeks-old explanation of this “rally” (which by some measures must be called a bull-market rally, though we will apply that term over our own dead bodies) chez UnexpectedlyNotDotCom is that the two or three market-moving institutions still in business are not really competing with one another, but rather have seen for several months that no one was really in the mood to sell, and are using these “markets” and this “momentum” to repair 2008 damage to their balance sheets, their client bases, and their PR departments with fantastic 2009 results. Not a conspiracy, mind you, just a lack of competition, an agreement that we-are-all-TBTF-not-to-get-along. Those quick green bars I love to harp on? Open communication, one desk calling out “game on” to another. If you’re retail and long, you benefit (not that the titans give a shit about you–if they don’t get your trading account, they’ll get your taxes!); if you’re short, you get steamrolled in much the same fashion as Wall Street has, in a larger sense, flattened the rest of the country.

This blog started with the rally already on, and got rolling with some thoughts on just how much bad news it would take to end it. Clearly, “much more than there is, even though there is plenty” is the hindsight answer. Again, I don’t believe this is about the individual participant, or the combined activity of individual participants in the real markets that creates what is inappropriately named “fundamentals”, but rather about the absence of individual participation. Meaning that the average American joe is far too pistol-whipped to leap back into these markets, fingers crossed, and bet what’s left of the farm on another month or two of green candles to straddle to the moon. Wall Street does not particularly give a shit about bad news, as we have seen. They are worried only about (1) not being bankrupted by their own bankrupt behavior, (2) not being bankrupted by the government’s bankrupt behavior, (3) not being told what to do by said government, and (4) telling the government exactly what it may and may not to do to help them expand bankruptcy of behavior without danger of bankruptcy. None of these things has much to do with news, at least, not of the public kind.

Here’s the short version: Wall Street has this market by the testes, and doesn’t give any more of a shit about the economy, or the news, or the facts than it does about me or you. It doesn’t care about the alarming ramp in the foreclosure rate (highest ever!),  the disappearance of consumer credit, the divergences in super-duper bank earnings, the punch to the face venture capital is taking, the alarming ramp in the problem bank list, the alarming drop in small-business lending, or the odd arrival of survivalism in the mainstream market. If you read the news and watch the markets, you don’t need me to tell you these things, because you can watch it unfold in real time. If you don’t read the news, follow those links for a comprehensive picture of just how much October 2009 resembles October 2008. Nowhere fast is where that one-way road leads, and one of those walls will prove not to be virtual.

So we’re coming into the second big week of earnings, and I note in passing that the first big week was the smallest first big week I’ve seen since the rally began. Where was the off-to-the-races up-4%-5%-12%-FTW? This week’s movement of 1.3% or so can all be attributed to breathless anticipation of this week’s movement, and that’s not collusion, folks, that’s premature, um, enthusiasm, and on Friday we broke out the kleenex and the apologies. Should get stickier (yikes, sorry) from here. Let’s watch together, shall we?

Is there any ado left to further? Your recaps:

  • Market Talk (concise commentary, no charts)
  • Cobra’s Market View (annotated chart analysis. His rules have been struggling a lot of late–surprise, surprise–but he still offers great charts and perspectives.)
  • Dave’s Daily (annotated chart analysis. A new one for us the last few weeks, great stuff, highly recommended RSS.)
  • Tickerville (video chart analysis, ~17 mins.)
  • The Chart Pattern Trader (not one but two vids, a bit too rambly for my taste, but lotsa education for noobs)

And a bonus chart of the week: Government expenditure vs. receipts, 1947-2009, courtesy of Société Générale

Be careful out there.

For today’s market metaphor, we scrabble up the slippery slope of politics. Yeeeeah. This is not a political blog, so bear with me as I present this next little bit as an example of what I’m seeing in the markets. Or just scroll down for your recap links and save us both the trouble.

There’s a particularly unsightly little bit of “satire” floating around all the internets called “Obamopoly”. (I don’t link scurrilous effluvium, but the Googles will helps you finds it.) With only slightly less nuance than a sixteen-pound gutter ball, it attempts to present the actions of our current government as reaching deep into our economy, Kindle-style, presumably creating some sort of nasty “monopoly” over our lives. Uh-huh, uh-huh. Wait, what? Forget about the screeching whine of rightist amalgam politics here; the graphic doesn’t even make sense. In the board game, players compete, against each other, to establish full control of the board. Not unlike in our economy, the adversary is not the game itself, but the competition. Half the “properties” in this failed bit o’ wit (they couldn’t even pull off a good name) don’t even “belong” to this administration, but to its predecessor, who would have made an outstanding player if only he could have read and counted.

Still, not much value (though plenty of fun!) in dismantling idiotic humor that fails to be clear, or instructive, or, y’know, “funny”. What’s particularly disgusting about this Obamotacolepsy bit o’ half-wit is the replacement of the classic “get out of jail free” card with a “race card” that allows the holder–again, some confusion over who’s playing and who actually is the game here, but oh well–“get off scot-free”, to be “used repeatedly as often as needed”. (Oh really, repeatedly and as often as needed? That’s pretty often, and also quite often!) Implying that somehow, in all the Big-Brotherization of our otherwise robust and thriving free-market economy, it’s all about those pesky minorities and their vast monopolistic game plan.

Anyone who failed to see that electing the first minority president in our country’s history was going to bring out the cracker honky redneck racists in force has been living under a rock the last, oh, entire history of the country. But placing government intervention, and the efforts–however valid–to save this wrecked economy, at the doorstep of race? That is hysterical, in at least two senses of the word.

So, the markets. (No, I did not lose my train of thought.) You might have noticed, we have a two-week near-vertical rally on our hands. Very, very strong movement, earnings-driven and technically sustained by… well, exactly the same Technical Analysis 101 that keeps not working in the market’s various failed attempts to pull back and correct.

Dispensers of trading wisdom like to remind us–at least a couple in the links below do–that the markets are “irrational”. I’ve never really understood what this means, since “the markets” aren’t a person or a mind, but a collection of haphazard buying and selling that either coalesces, or does not coalesce, into trends of varying lengths, redistributing, creating, and destroying money as it goes. Ascribing human characteristics to its movements is like mixing up the game played with the players; the market is nothing but the results of a lot of human actions. It is untouched by winning and losing, cold, inanimate, indifferent. Doesn’t sound particularly irrational to me.

The players, on the other hand, vary in levels of irrationality from player to player and day to day, and now I come to my point: this rally, and the price action of these two weeks, it seems to me, demonstrates a near-collective hysteria. Many of its component parts are irrational–two-fisted buying on so-so earnings, short-covering in the face of a pullback that just won’t come–but what raises its pitch is the conviction that the bottom is in, the risk is acceptable, and the reward not to be missed. With a couple intraday exceptions, there hasn’t been any dip-buying the last two weeks, because there haven’t been any dips. If you buy XYZ at 9 and sell it to me at 10, you’re a sucker, because I’m selling it at 11. The lack of volume probably means I’m selling it back to you, but that’s ok, because we can keep volleying it back and forth, all the way up to a zillion, because this is a vast opportunity.

If you’re unfamiliar with my broader stance, you can read it here, but what I want to focus on in this post is the desperate character of the buying we’ve seen since March. Granted, that adjective is a tough sell. It’s much easier to describe selling like that of January-February 2009 as desperate, because prices are falling, and fast, and falling is perceived as negative, and fast is more negative, and desperation is a negative state. Pinning the adjective on buying is much trickier, because when as we’ve seen since July 7, prices are rising, and fast, that’s perceived as positive: rising means prosperity, and rising fast means confidence in the prosperity, and what’s desperate about that?

All the same, I think all it takes to get to hysteria–the root of desperate market action–is a nimble leap across the chasm of thinking, a la the Obamochrestomathy cretins. That leap has come to us, indeed fallen from the sky and landed squat on our faces, in the form of defeated analyst expectations, and by an enormous margin! Oh, except in revenues (yeah, same link, don’t click it twice). The players in the market are frothing at the mouth with joy, because analysts who were cooking up their thinking with a spoon and a bic back in December ’08 fell well short of all the goodness we were going to produce.

The thing about hysteria is, you can’t fight it. It only takes one simple chart to show how utterly imbecilic it is, but it’s impossible to stick a fact-pin in market mania and burst it. (I recommend trading [or not, if you’re me] accordingly.) This is probably owing to the fact that Obama is not a white man, and has wrecked facts in the name of greater minority dominance. This is why all your TA 101 is belong to us. Except the hysterically bullish kind, of course, which has been working a treat.

Without further ado, your recaps:

Good luck out there. And try not to lose your head.

Wrote a bunch of commentary, but didn’t finish it to my satisfaction. Alas, the time. So I dropped it all, and leave you with the source of the title only.

Courtesy of the immortal George Carlin, in his own words:

Do you ever get that strange feeling of vuja de? Not deja vu, vuja de. It’s the distinct sense that somehow, something that just happened has never happened before. Nothing seems familiar. And then suddenly the feeling is gone. Vuja de.

Uh-huh, uh-huh. Seems to me a lot of people are feeling that way this week; the buying action reminds me of nothing so much as that around earnings Q1–the same red-lining of the risk trade, the same balls-out correlation, the same conviction that from here we go up another 10, another 20, another 30 percent. And then suddenly, we realize it’s a different story at 930 than it was at 730, and the feeling passes.

Without further ado–except to note how many people seem to want to chime in after a week of charts yer pet mongoose could analyze for you–your recaps:

  • Market Talk (concise commentary, no charts. Some bearish bias perhaps, but I appreciate the shout-outs in there.)
  • Alphatrends (video chart analysis, $SPY exclusively in multiple time frames, ~12 mins. Yay, a freebie from Stocktwits premimum! This guy may have blocked me on twitter this week [and then tried to sermonize tell me why, via a reply my now-blocked account could not receive (dear me, web 201x is challenging!)], but he’s still a master of chart and trade. Must watch.)
  • Investopedia Week in Review (annotated chart analysis and commentary. Pretty generic. First time here.)
  • Jack McHugh (in-depth commentary with links. If you don’t read this guy, why do you read me?)
  • Hamzei Analytics – Market Timing (video proprietary chart analysis from one of my favorite follows. ~8 mins. First time here.)
  • Tickerville (video chart analysis, ~20 mins. Short version: he’s flipped back to bullish.)
  • Cobra’s Market View (annotated chart analysis, super mix of indicators)
  • The Chart Pattern Trader (TWO videos of chart analysis, ~23 and ~30 mins. Yikes.)
  • Random Roger’s Big Picture (video investing commentary. ~10.5 mins)
  • Unexpectedly, Inc. (one $SPY chart, one pattern repeat, and the Unknowable Future. Diggable.)

And I leave you with the quote of the week, from the digital pen of 24/7 Wall St., whose 24/7 coverage is vital if their perspective leaves Mr. U a little, um, underwhelmed 23/24 and 6/7. Not this time. Rest of that link is interesting too.

…everyone knows that AIG needs cash more than a homeless junkie.

Good luck out there. Yikes, and awaaaaaaay.

Heh. The bullishness, of a kind, aboundeth, amidst more insider selling. Congrats to all you lovers. I carry on with the exact same skepticism–not to be confused with bearishness–I’ve held, in oh yeah a costly manner, for weeks. Makes me wrong, broke, and angry. Which means, the day I get right, I dance on the faces of the sharp & lucky naïfs. Meanwhile there’s no good risk-reward reason to get long outside stockpicking and individual setups, and no good reason to get short outside my own head and pretty much all the real non-tape news.

Without further ado, your (Mr. Useful) recaps:

Best of luck this week. We’ll all need it.

PS. Please do link recaps you think I missed via comments or on twitter.

(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.

No time for commentary this evening folks. Without further ado:

Good luck this week.

UPDATE: The unmissable Trader Mike appeared just a few minutes ago.