Market Briefing For Monday, January 30

Stretched valuations and uncertainties gradually should be returning to the fore in the days ahead; even as the DJIA and S&P show the projected resilience, by virtue of minor upward consolidations expected in the wake of the 20,000 hurdle benchmark achievement expected as the Dow catches-up with Indexes already in new-high territory.

We're now at an S&P upward channel resistance that ideally will not entirely constrain forward price behavior for a few days; frustrating bears even more and giving the impression of the market going parabolic. My thought is that it won't actually put a parabola on top of an existing two month near-constant thrust (for which we've been bullish throughout), while actually be part of the 'vacuum' phase drawing-in the last holdouts to this move; in-preparation for some sort of February correction.

The foregoing presumes we get the extra market nudge higher of course; a prospect that is dicey but nevertheless conceivable, especially if we find a favorable as well as illustrative trade deal between the U.S. and the U.K. in the days ahead (demonstrably showing what can be arranged bilaterally in a favorable way between two countries with similar wage structures).

A bilateral deal also makes my point that by not tossing other nations into a mix, you don't have participants you're obliged to have equal trading terms with, but for whom their own circumstances and wage structures vary widely (as frankly is the case 'within' the European Union; which has made things a bit challenging when contrasting Spain and Italy with others; or even a wiser policy like the Czech Republic, which has a status as an EU member, but not in the Eurozone). It was similar for England until Brexit; and now we think Parliament will have a sufficient number of votes to give an approval for PM May's Brexit finale.

In sum there are many wild cards 'in-play' or 'in-the-air'. It's impossible to say which (if any) will have a negative impact on the market. However while looking for a correction in the near-future, after rightly arguing to hold off for either the tail-end of the month or more likely early-to-mid February. There's also some growing realization that a somewhat nationalistic policy isn't quite the boogeyman rejectionists have contended.

It can work if not pressed in a very extreme way. Thus if media comes along with a moderate stance of evaluation; that would help not just citizens to understand what's probably really afoot with all this; but also it may help markets sustain higher support levels when this corrects.

Since it will be more evident that significant weakness will be for additional buying, as opposed to some sort of panic selling 'as if' everything was going to implode, that would make a coming February correction a decline within the context of an uptrend, rather than a major market blow-off top reversal; a common refrain from the bears and bulls who entirely missed the upside.