Most market veterans will tell you when markets rise on bad news that's bullish. It's hard to question this experience but Tuesday's action put this wisdom to the test. The news was just dreadful. The Greek situation is by no means resolved which is the slender reed bulls ascribed as a reason to rally. Frankly, all this Euro Zone troubles will continue to bob to the surface as troubles get only temporarily papered over.
What news there was featured awful Consumer Confidence data (60 vs 67 expected) which made the previous Michigan Consumer Sentiment data seemed as bogus as suggested here last week. On top of this was the double-dip in the Case-Shiller Home price data and a large drop in the Chicago PMI from 67.6 to 56.6 vs expectations on 63.
The good news from all this is just a repetition of the previous theme: "bad news is good, and good news is better". This has dominated bullish thinking as they believe interest rates will remain low offering little competition for stocks. Naturally, another round of $7 billion in POMO Tuesday just threw gas on the fire.Also still in is how stocks rise with a weak dollar and stronger commodities especially energy. Naturally, it also ends May with gains which minimize losses for most of the major indexes and is just more window dressing for portfolio managers. Volume was below average once again while breadth per the WSJ was positive. You can follow our pithy comments on twitter and join the conversation with me on facebook. Continue to U.S. Sector, Stocks & Bond ETFs