You can’t mistake a bull market for brains

Fibonacci Forecaster weekly review and preview

image credit: JD Hancock

Some of you may recall a couple of months back when the jobs number was around 180,000 give or take and people were disappointed. Here it was we were only 5 years off the bottom of the worst financial crisis since the Great Depression and people expected the country to produce jobs at the same rate as they had during one of the great prosperity cycles in the history of the country. If that isn’t complacency or arrogance I don’t know what is. Now they hit a hit grand slam at 288,000!

Many of you know I’ve given the Obama administration a hard time most of these months over the employment picture. For those of you who don’t know, the Clinton administration averaged around 227,000 jobs a month. Put in that light Mr. Obama can take all the credit he wants. This is a good number and there can be no complaints. That’s how it is with politics; they have more responsibility than sports coaches. When it’s bad, they get the blame and when it’s good, it’s really good. At 6 years into his administration Obama owns this number.

For our work you have to wonder if this is as good as it gets. As you look at the Andrews channel for the S&P 500 (CME:SPU14) we’ve scaled Mt. Everest.

Why did the market shoot straight up? There are a lot of reasons which we’ve discussed here but from a pure technical, quantum physics point of view once this thing got above the mid line it caught the path of least resistance which was finally up. It didn’t even better than most of us could’ve anticipated because corrections have been blips on the radar.

Now we are also out of time windows. The latest surge has undone the 610 week/seasonal change point from June. In fact you make a case the seasonal change point inverted which is why we are higher. But don’t get the idea market timing cycles no longer work. The fact the market didn’t give us a bigger correction in this season is an indication of just how powerful it really is even if the Nasdaq has been moving to the right in the greater Andrews scheme. The other indication I told you last week was the April 15 low on the blood moon which stopped the correction dead in its tracks. The next time window hits at 618 weeks off the Internet bear in late August and until that point any correction that could hit is likely to be short lived because it will not be supported by any set of profound calculations.

So, did the euphoria crowd win? For now they did and every so often in stock market history the market itself sets up a massive bull trap as they allow people to think it’s their skill that made them the money. I’m sorry, but you can’t mistake a bull market for brains. Ninety-percent of the people lost 90% of their money in the Internet bear and there will be a correction at some point. But until that time you have to go with the flow. You have to and a lot of sectors have improved. The SOX has improved, biotech healed, the transports turned back up. Even housing and banking improved. The only sore thumb right now out of regularly traded sectors is oil stocks.

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