E Market Briefing For Monday, Dec. 7

Defense radars are searching for a reversal of this market bubble as 'they'll' term it; while the overall market isn't quite so eager to listen to the technicians and pundits, yet. As the bifurcated market churns (or grinds higher for S&P); it is obviously overbought, but only by measures focused on the 'super-caps'.

Nearly 80 years ago on 'The Day That Will Live In Infamy'; Army radar guys had been searching the skies for enemy intruders; barely recognizing that the United States and Japan had ended peace talks in Washington; and alerts at that point were being sent to 'all Pacific stations'.

(Contrary to the traffic-light market signal technicians; there is radar detection of incoming threats; but defining the extent of possible damage is trickier.)

Confident nothing was at risk, the Admiral commanding the Pacific Fleet ignored a brewing situation; although he did (thankfully) dispatch our three Carriers to a 'training mission', while keeping the Fleet 'and' our (lined-up in rows) planes concentrated. That's sort of like the 'concentration' of equity trading in big-cap stocks now. They 'are' lined-up for damage should an attack come; and sure it is appropriate to disburse the assets (diversify a bit); but not necessarily flee if it's uncertain when the enemy (bear) air raid will come.

So the dive bombers may be forming, but not yet forming attack formations; at the same time I will call this a coming 'air-raid', because the S&P is up there in thinner air, just shy of our maximum 'reasonable' near-term 3800 or so goal.

One more thing: what happened after the 'air-raid'. The United States and our allies regrouped, got our senses about us, and went after the 'raiders'. That in fact is what we did with our March low (having predicted topping in January as well as early February) and for weeks we've warned of a possible shakeout at the same time what we've done is refocus on smaller specialty stocks, versus big-cap behemoths. We caught this S&P washout and run-up year; why would we see any reason to chase them now? But this is a unique year bifurcated in so many ways; thus it has also proven unwise to short this market. Perhaps it may be that the best suggestion I've had is 'don't fight the Fed' or the trend.

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