Wouldn’t it be ironic if the market topped on just the good news people think would elongate the rally? Think about it. We heard for months if not years the market would stage a huge rally if and when the day ever came that Osama Bin Laden would be captured. Well, OBL was captured on a Sunday and the market topped the very next day. Of course there were some extenuating circumstances, such as we had a perfect storm in the oil market that day which we’ve chronicled here countless times. But how many times has the market done the exact the opposite of the prevailing common wisdom? If we take the no vote for American involvement in Syria we started this euphoria train and now people are happy that Summers won’t be Fed chief all we really need is a no vote on tapering right now. What that would lead to is splash of cold water when the GOP starts threatening to shut down the government if they don’t get their way with the budget debate.
Here we are, as I write this column its five years to the day of the Lehman collapse. We are rallying mightily into the seasonal change point at the end of the week. If markets are going to turn, the highest probability is they do so at the seasonal change point. There’s still lots of trading hours to go before the Fed news comes out and even more to the end of the week and the change of season. Lots of things can happen between now and then.