The bull is back... and I mean that on so many levels.<br />
Let there be no doubt now; a close over S&P 500 950 puts us over the 200 day moving average in either the exponential moving average universe or the simple moving average universe. [Jun 3, 2009: Why I Use Exponential Moving Average] The squiggly lines assure us stocks can be bought without fear, and shorts are back to their role as heathens to be mocked or talked about in hushed tones at cocktail parties. As I peruse the "simple moving average" chart I posted in the Jun 3rd entry above, you see a perfect technical formation; a break over the (simple) 200 day moving average, then an exact retrace to the line (which was bought hand over fist).
As I judge the slope of the advance, we seem on track to all time highs on the S&P 500 by Labor Day. You laugh I know, but in a world where valuation means nothing - we can do this. Together. I call on all those Americans who sit at home in bewilderment to send their entire unemployment check to Etrade or Ameritrade and get into the party. I call on governments to take their federal stimulus money and apply it to the stock market so they can solve 2010 budget shortfalls "the easy way". I call on the federal government to put their money into the stock market so... wait a second, been there - done that. Nevermind.
A quick word on the employment report, which I'll report on more in depth later in the day - (1) I don't recall seeing such a variance between the ADP report and the government report but when in doubt I always trust the government over a private sector report (2) I cannot wait to see how many jobs were created out of thin air in the "birth/death model" and (3) there appears to be a shadow inventory* of unemployed people just as there is a shadow inventory of housing stock - despite "only" 350K people losing work, the unemployment rate jumped higher than expected.
*remember as I explain in each month's employment discussion in America when you are out of work for 4 weeks, AND stop "actively" looking for work - the government says you are no longer unemployed. Therefore, many of these "not unemployed" people apparently started looking for work again the past month. Even though they are not unemployed. Government reports are cool like that.
Normally I'd have pause that EVERY blog I scan now that is not of an economic focus is bullish and has given up the ghost on shorting. Or that EVERY blog is now on the same exact reflation trade. Normally, I'd be worried that these trades are CROWDED, or the ENTIRE crowd is now on one side of the boat. Normally, I'd be worried that each day I see I can buy stock on every dip and never have to worry about losing money within 48 hours. Normally it would seem so simple to be a long as to be egregious. I'd wax poetic about how this is setting us up for a reversal that no one is positioned for. But these are not normal times - I have the "insistent bid" always supporting us to make sure the market never really goes down.
So with that, a toast S&P 1000, hopefully by the end of the day or at latest next week. And I can break out my Dow 10,000 hat which was so fashionable in 1999. We've made much progress the past decade.
Like a lemming jumping over the cliff I'll be joining the stock hungry crowd and buying long exposure. The angry mob is running over each other to buy stock... preferably of the 40-70 PE variety.
Latvia Shmatvia.
Kool Aid.
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