Fundamentals Are Bad

The fundamentals are getting weaker again and the bear side is well advertised now.  With the market still over 100 ES points from the year's highs, I don't see a big edge in calling for a bear market considering the risk of a continuation of the up trend. 

This rally that we had this week really has confounded a lot of traders, as the economic data comes in poorly, with a few earnings warnings sprinkled in.  Why did we keep going higher despite the bad news?

What gives?  Well, if you look at what the market was really worried about, you have your answer. The market was worried about a European debt crisis and that crisis has cooled off considerably with the euro going higher amid better news out of the Spanish banks and successful Spain bond auctions.

There is also BP fatigue.  I don't know about you, but I am tired of hearing about BP.  It is priced in.  

Isn't it interesting how the economic data looked great in April as the market was higher but now after a big correction, it looks horrible?  I think a jobless recovery is the most likely scenario.  Stocks are a rich man's game, and the lower-middle class struggling doesn't affect the direction of the stock market.  As long as the rich are fat, stocks will be supported.

The Cassandras are still plentiful and I find it hard to see a big plunge when that is the case.  Even if we have the double dip, the market will not likely fall much.  The liquidity is papering over everything and stocks are no longer overowned.

I am ruling out a visit to 990, and I even think breaking 1040 will be tough to do.  For dip buyers, 1060 is probably the lowest price they can hope for this summer.