E Market Briefing For Thursday, Apr. 29

President Biden's Address and the passivity of a Fed fearful of moving too soon towards tapering, reflect the dominance of leaning-upon financial assets, based on extreme expansions of debt, higher taxes, and not cracking-down a bit better on excessive (even dangerous) leverage and speculation. We recall how 'algorithmic trading' drove prior markets (probably this one too, higher), a reminder that this works in-reverse if the plug is pulled on the celebratory run.

Little noticed, last night one value-fund manager in New York committed what is said to be suicide (there have been a number of money managers doing so over the last year but little reported) by jumping off his 10-story office building. Just last week he had liquidated his two funds, which had dwindled (via client redemptions and price decline) from over 2 Billion to around 800 Million value. He had refused to abandon his fundamental value proposition, and like Buffet for-instance, stuck to ways that are responsible, but don't fit the times. Even it seems Buffet (by embracing Apple more) budged off of his deep value views.

Many analysts (mostly strategists) point to what they see as red warning lights of extremes in sentiment, valuation, and just duration of the upward move. For the most part they ignore the internal divergence I've called 'bifurcation', that's dramatically separated the performance of the 'grand dames' versus the rest.

So warning signs can flash for quite some time, and I've certainly pointed-out that broad shakeout risk would return again in late April and May. Here we are of course, although that's no assurance. For sure we at least didn't fight most of the way up, as so many pundits and technicians did. I have noted that over a period of years, speculative bubbles often display symmetry.

Then you have JP Morgan, after the Fed news conference, saying 'buy every dip'. I don't entirely disagree for now, but they (like most) fail to distinguish the bifurcated sectors from those working. This is a big-cap and Oil-led market. If there's a bullish argument (actually mine) it's a need for broader participation.

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