Thrilling Thursday – The Luck of the Irish

Yawn!   Yes, YAWN I say to a 1% bounce!  I mean REALLY people, have we taught you nothing following our 5% Rule ?  This is a very basic part of it, you get a 20% reversal off of 5% moves and that is called a WEAK BOUNCE.  Don’t blame me, I don’t make the rules…  Oh wait, actually I did make this one.  Anyway, don’t blame me, this is just a rule based on how the system works so let’s not get too excited about what basically amounts to physics .   It could have been Ireland (which we were expecting) or it could have been JPM bashing the dollar ( they did ) or it could have been Buffett saying " All is well " in the NYTimes (gotta get the liberal into the market too!) – it could have been anything but SOMETHING was going to give us a dead cat bounce.   Note the Nov 2nd levels on the chart.  Here, if it helps I’ll do an impression of a TV analyst: " It is truly amazing to see how resilient our markets are making such a strong recovery and we project …"  Oh, excuse me, I made myself sick…  Come on people, we’re back to our Nov 2nd highs (if that) and, if we pull back to the " year to date " view, the song " I’m Always Chasing Rainbows " springs to mind ( the Alice Cooper version ): So pretty, isn’t it?  Maybe this time it will be different.  I’m not saying we CAN’T go up – with the Fed pumping in cash at an annualized rate of $1.8Bn it would be pathetic if we DON’T go up but I am very skeptical until we do break over those April highs and hold them as a firm floor.  I was skeptical about Monday’s bounce (from 11,200 on the Dow to 11,275 and from 1,200 on the S&P to 1,207) and that served us quite well so give me the benefit of the doubt on this one before you all go off chasing this rally.  We have a weekend coming up (lots of things could go wrong) and then a short week into a holiday which just so happens to be the holiday after which we expected the market to fall off a cliff if it continues to follow April’s Beta 3 pattern ( see Monday’s …