Last week started feeling like March of this year all over again. Or the fall of 2009. It is getting absurd. The economic data was not good. Jobless claims, regional manufacturing surveys, Fed Ex warning on earnings, ECRI, building permits, and housing starts. All misses, all showing signs of rolling over. It didn't matter. The market grinds higher. Doesn't matter what the data is, volume disappears and the market goes up.
Now Asia is screaming and US futures are screaming higher on the news that China will supposedly will devalue the Chinese yuan against the U.S. dollar. Let's see, US futures are screaming higher, China stock market is screaming higher, Japan stock market is screaming higher, everyone is screaming higher on this news. HOW DOES THAT MAKES SENSE???? Currencies are a zero sum game. It CANT be good for EVERYONE!!
Well we are quickly approaching that 1140 area that I have been talking about. Why? Because the Euro is going up? I don't know. That correlation hasn't broken for over 2 years. Why is the Euro going up? I thought we would see such a bounce and mentioned it on this blog several times but I don't know why it is really going up besides the fact that it ran out of sellers. Bond spreads in Europe continued to widen last week. Nothing has made sense for over a year. Up or down the market is broken. No one really should be playing it. Just insane.
New home sales, existing home sales, durable order, jobless claims and FED meeting all this week. Of course it won't really mean anything. If we are really back to stupid time the existing home sales number will look good because those homes that met the tax credit deadline will close in May and June and so will be a lag in the data. So that data will good even as every current piece of data with no lag shows housing crashing again. So this good data will be bought with a vengeance as the market screams higher. That 1140 may be a low estimate of where a stupid market can head.