Bernanke has sent out his merry men to talk up stocks and reassure investors that all is just great. Last week it was Bullard, Lacker and Kohn throwing the spin around and today it was Dudley with a notable assist from Buffett. And, since it was month-end, headline writers got the green close they wanted with the third month of gains.
Kohn's comments last week were incoherent overall while Dudley's TV appearance consisted of misleading BS with comments like, "The Fed is keeping its mandate" and, "It's unwise to overreact to rising commodity prices." And, just what is the Fed's mandate?
It's to maintain price stability and preserve the dollar as a store of value.
That's it; skip the spin and lying.
In addition, bulls got all jiggy when Buffett announced over the weekend he was anxious to do some buying with his $38 billion in cash. Since he never makes a mistake this must be a buy signal.
Things in MENA (Middle East & North Africa) are still on boil but aside from Ka-Daffy no regime is in danger "today".
Economic data today consisted of Personal Income (up 1% due to employment tax reduction); Personal Spending lower than expected; PCE (Personal Consumption Expenditure) "core" .1% (LOL!); Pending Home Sales worse than expected; and, Chicago PMI highest in 22 months (inside the numbers costs increasing, margins tightening, and employment sector down). Add some month end window dressing and another round of
and stocks closed higher on continued dip buying.
The dollar continues to weaken making a lie of one part of the Fed mandate and although oil prices weakened the overall commodity sector continues to rise marginalizing part two of the Fed mandate.
Volume overall on continued melt-ups remains light and per the WSJ breadth was mixed.
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is a market breadth indicator that is based on the difference between the number of advancing and declining issues on the NYSE. When readings are +60/-60 markets are extended short-term.
McClellan Summation Index
is a long-term version of the McClellan Oscillator. It is a market breadth indicator, and interpretation is similar to that of the McClellan Oscillator, except that it is more suited to major trends. I believe readings of +1000/-1000 reveal markets as much extended.
is a widely used measure of market risk and is often referred to as the "investor fear gauge". Our own interpretation is highlighted in the chart above. The VIX measures the level of put option activity over a 30-day period. Greater buying of put options (protection) causes the index to rise.
Continue to Concluding Remarks
It's hard to countenance ongoing lying from authorities. If they don't like inflation data they just change the index which has been done in the past. These "core" rates are insulting frankly and the public is being misled and lied to. The Fed through manipulation and lying is not following its mandate to preserve the dollar as a store of value or maintaining price stability. It really is disgusting.
Markets have resumed the rally higher as if nothing happened on the strength of ongoing BS and love affair with Buffett. Economic data is superficially cherry picked and spun.
Despite the loathing it doesn't make you money so we're long but we don't have to like it.
Let's see what happens. You can follow our pithy comments on
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