Beware the Ides of March - not the month coming-in like a lion, was our view. For sure, this rally was ridiculously robust (regardless of volume sluggishness in a sense); and that's because all the resistance areas and moving averages of a short-term nature simply were taken-out. 

Those points created acceleration and resulted in a great deal of confusion as to analysis of 'what's going on'. No, that's not an allusion to Trump policies on immigrants, but to the impossible scramble between bulls and bears to sort out what backdrops were supportive or not for the Tuesday rally. 

Actually we'll touch on this a bit via video; but basically it's almost as amusing as the Jimmy Kimmel take on 'The Producers' (below; just couldn't resist as for anyone with a sense of humor it's hilarity, regardless of political perspective). In this market you have the upside crowd attributing bad news from China; softer dovish comments from NY Fed President Dudley and a lower Atlanta Fed GDP Now forecast (1.9 from 2.1). Others interpret the post-blizzard recovery as new signs of recovery, and suggested this gives the Fed room to hike rates. Really?

Let's summarize this as to us it's a normal intraweek / start of March rally that's run amok, with dramatic short-covering. I doubt you're going to see the S&P as well as Oil, the Dollar, and interest rates, all advance in-lockstep for very long. 

So let's focus on former Chairman Greenspan's 'stark warning'; realize we have a market that's overbought daily-basis; but not particularly weekly-basis, and as was known coming into this week; a market that short-term had potential either way. Seasonally it's normal to have strength this time of year; but we all know it is constructed upon a wobbly base; and has as it's origin a desperate rebound off the double-bottom just above the S&P 1800 level. That doesn't mean it can't move up (as I noted that very day when we took more off gains off the table); it means the premise of the move wasn't there, that's all. And we wanted higher Oil, with a knowledge that usually that would coincide with higher equities (not on Monday; but it sure did help today... so did the Court decision for Apple that sets a 'comment' precedent, if not one based on the terrorist phone issue itself).

Warped monetary policies - embraced by most central banks; including of course the implementation of negative interest rates (NIRP), not only distort sensible directives for investors, depositors, and business; but disrupt the ability to plan and implement guidelines for forward growth. 

Not exactly 'his' words, but that's my takeaway conclusion from listening to Alan Greenspan this morning; who was slightly downbeat on the global economy, and now speaks actual English, instead of 'Fedspeak'. The former Chairman of the Federal Reserve thinks we're "in trouble because productivity is dead in the water". Actually I'm not sure I'd agree about 'productivity', depending how that's defined of course. In the digital world, productivity can improve as jobs decline.

Regardless how one looks at 'output per hour' (which he views as key); there's no argument that 'real' capital investment is down because business people in general, are very uncertain about the future. Every time the Fed tries to spur it with a monetary approach, it turns out wrong. In my view that's because they'll not admit that in a 'post-industrial' service-based economy, you can't simply put a low-rate policy in place, and expect the kind of outcome of a generation ago. 

So we've been critical of QE (Quantitative Easing) or similar approaches; while believing it was helpful 'only' in the initial stages coming-off the 'epic debacle'. I find it interesting that the former Chairman agrees that this doesn't add a whole lot more after the 'emergency' injections some years back. What's missing with our financial leaders (present or former) is a dearth of thinking about what steps are really needed in the future, aside substituting 'broad' terms, such as 'fiscal stimulus', in-lieu of monetary policy for stimulus. 

We're still in-favor of allowing markets to engage in honest price-discovery and believe data like China's continued deterioration, tell everyone that compelling (or commanding) an economy to grow by creating disincentives to save, aren't going to have impacts they once did. Mr. Draghi at ECB should also know this. 

Finally.. now that 'serious' (often pedestrian or high-school antic-like) politics of the short-term are finished for Super Tuesday, how can one resist the hilarity of this skit (one of many the Establishment tried to dissuade restive voters with; it seems every skit, every wisecrack, only emboldened the frustrations out there to make a point). In any event, it lacked only Zero Mostel to make it perfect :) 

(Again; just for fun; even 'the Donald' might have a chuckle at this. If this does not play; you can search for it on ABC / Jimmy Kimmel's website page. I have not posted a link this way before; so can't verify that it will play before posting.)

Trump .. likely has won several states; Cruz took Texas and Oklahoma; but too early for finals in many. Clinton solidly won several; and Sanders took Vermont and Mass. It's all preliminary at this hour of course. The challenge is that Cruz is beating Rubio in several states; and that's entirely problematic should it carry through the night. Trump didn't sweep the night; and there is some disarray.    

What's NOT preliminary is Moody's downgrade of China; could be a bit of an impediment for the Asian markets as they open higher now (Wed. a.m.).