Closing Comments

Today was another low volume day. Breadth was super strong early in the day, but came off somewhat by the close. There was a decent swoon from the highs early afternoon, and some indices came back from that, while others didn't (Transports for one). VIX came back to its 50 day average. We have corrected some of the oversold readings from the end of last week, so we will see what progresses from here. I sensed a lot of Bear despondency yesterday and today. Many Elliot Wavers think that the last two days have negated a down move and we are off to new highs. Given this market, I would not be surprised if they are right. I think being long here is very very dangerous so I am not so much concerned with getting long for new highs. I am curious as to how the market acts in here though. So far, I reserve judgement. I will say that the most recent correction did much more technical damage than any other correction since the March lows, so if new highs do come I believe they will be rife with divergences and non-confirmations.

Precious metals had a great day today as their is widespread belief the dollar is dead. I will only note that (again) that Gold is not as strong in other currencies. I will also point out that we are not making new lows in the dollar, nor are other commodities like crude oil, or copper at new (nor even cyclical) highs. I am not going to defend the unconscionable actions of the Fed (aided and abetted by Congress), but China makes us look like choir boys if we want to discuss monetization or money printing. The UK and Australian private sectors were even more levered than ours at peak. Spain is an absolute disaster, as is Ireland, and Italy. Who says the Euro can even survive as a currency block? I am just not convinced that the Dollar is the worst fiat POS on the block. Its pretty bad.... but there are worse!

Correlations continue to be horrendous. Its all one trade. I cannot wait for that to change. Until it does, just be cognizant of it and your position sizes.