Another just unbelievable day. Large increase in jobless claims and the market ignores it. What may be even more surprising is the huge increase in deliquencies reported by the MBA setting yet another record and today's rally is being fueled by financials. Just doesn't makes sense from any fundamental standpoint but it has been this way for the last 200 to 300 S&P points.
I said in a post earlier after Monday I was putting 50 50 odds that the top was in. I have been calling for a top by the end of September and I am still calling for that top but the probability that the top was in has to have dropped. It is the way of probabilities. There has been absolutely no follow through from Monday's sell off despite dismal economic data. The really "bullish" data should be coming tomorrow and next week. As a result I think probabilities that the summer top is in probably have dropped to 20%. Tomorrow is existing home sales. That should surge and beat expectations. Next week is the Case Schiller Home Price Index which also should be very strong along with a whole slew of manufacturing data from July which should be the peak of the data. I was hoping we would have some additional follow through from Monday's sell off to give a cushion to when this data comes out. Yet the market has powered higher and so now setting up for yet a probable additional high.
How the market can be up today on dismal data for arguably the two most important economic metrics for the market, jobs data and mortgage delinquencies, is beyond me.
The absurdity of it all.