We’ve been trading in an approximately 100 point SPX range for almost 5 months. We’ve had 4 false breakout and 5 failed breakdowns. Yet each time we approach support or resistance, the histrionics begin anew.

Look, you know what they say about uncertainty so I won’t bore you with it. But there is uncertainty all around, so don’t expect a breakout or a breakdown that actually works yet.

So many smart folks “just know” that we will correct 10% or more come September/October and are heavily hedged. If those hedges have an expiration, expect them to be burned to the ground before a meaningful fall. And if there is no expiration, then expect further derivative decay. Playing it careful will remain very expensive–until you least expect it. When it gets cheap again, watch out…

The higher low looks confirmed, unless we give it all back by day’s end. We remain capped at 1130, but we could easily “pop” to test 1150, the January highs. But that’s about it. Now all we need is some upside volume. But oh, it’s the middle of August and things are slow!

So today we have begun the process of making back what was lost last week. The stocks that were down 7% in a day last week are up as much this morning.

Market internals are stellar and we are approaching our first zone of resistance rather quickly. M/A gets everyone’s juices flowing. Plus we have the promise that the “powers that be” won’t let us fall into the deflationary spiral spinning just over the horizon, so the dollar is heading lower. That is all the market needs to rise. Silly, huh?

Look, when we were near SPX 1130, I forecast a pullback to the 1080 area, then perhaps 1060, but that a higher low would be made for this range. Now, getting through 1105 will lead to the 1120 area. The trading range continues…

We caught the falling knife in energy and now we are catching knives in technology.

Bearishness? Doubt? Disaster? fuggetaboutit! (for today…)

The last technical signal in Copper worked like a charm. Will this?

Yields have dropped from 4% in April to 2.575% today, an over 30% fall…

Quantitative Easing at its finest!

We are right now fullfilling my longstanding prophesy that we are Japan. It has become a popular point of view.  Mortgage rates will be 3% in about a year, and as unthinkable as that was a year ago, so it was written, so let it be done.

Sure, there are differences between our countries and our business cycles. But ours is the mature, non-growing, oversized economy that will become the source of “cheap currency” for the world’s “carry trade”. This will keep our boat afloat until the next Presidential election.

But for right now, anyone left in the market is hedged for the “coming debacle” that will begin the day all the kids go back to school and never end… I kid…You’ll have a chance to hedge as we test the highs of the year.

What will it take to get there, you ask?

To be continued…

How’s this for symmetrical harmony and precision? Written by my 6 year old. Look how he captures the true nature of this market!