I hope everyone had a great Valentines weekend. I spent some time on a South Texas ranch and even got a pretty bad sunburn. Yes, as Dallas was under snow South Texas was hot enough to get a sunburn. Crazy state.
The bears are in full retreat mode. The hand writing appeared to be pretty much on the wall after Thursday. Some leftover bears tried again on Friday only to get pummelled. Once the market breached 1080 it was off to the races today. I have a hard time seeing how the market does not test 1100 at this point but we will see.
What continues to stand out to me (glaringly so) as something that just doesn't look right is commodities. Copper up MASSIVELY again today. Oil was up over 4% or $3 dollars a barrel. It made a little more sense than it did last Thursday because the dollar was really weak today but it still raises questions in my mind and points to a flood of some unseen liquidity.
The news out of Europe over the weekend was just gruesome. There is no plan. There is infighting and disagreements. At this point (to my amazement) the market has not called their bluff. As a result the market is willing to take it at face value that Europe is prepared for a bailout when if you read European newspapers it sounds like Napoleon is more likely to rise from the dead than the people of Europe hand over billions in bailout money.
There are times the market does crazy stuff that confuses people and I can usually figure out why the market may be doing something. The market can do whatever it wants and does not need an explanation but for instance - when unemployment is a really bad number and misses and the market skyrockets. Doesn't make sense right? Well the market may be more concerned about interest rates or a stimulus package. You start thinking about it and you can understand it. I simply cannot understand the market the last week. Everything I thought would happen that I thought would drive the market down, occurred. I give myself an A for figuring out what would occur in the political world and F in understanding how that would relate to market action.
At this point 1100 to 1110 needs to be held for the bears. Sort of the last stand. Don't really have an opinion on the short term. Ironically at this point the market looks overbought. Some push higher seems to be a given.