This Chart Thinks It’s a Road Map

We are going to allow for the S&P 500 to get all the way up to the high 1500’s (say 1580 or so) and then the alarm is probably going to go to red alert.  Here is one of those charts that tries to say everything, leaving little for me to actually post.  Okay chart, do your thing…


The mild corrective activity this week has jerked some dumb money measures into a more cautious mode and that makes me wonder if we are going to get a correction of much significance on the way to SPX 1580.  It would be for the best.  But the Fed is pump pump PUMPING and the funny munny has to go somewhere.

Do you see this ridiculous “great rotation” (from bonds to stocks) that the silly MSFM (mainstream financial media) are pumping now?  MarketWatch is touting this concept nearly every day it seems.  The story is that the public, 4 years into a bull market, is ready to climb out of its foxhole.  Ha ha ha…  SPX 1580 people.  Respect it.

This morning there was a MW piece about some guy named something or other Stack who was the only man on the planet who got bullish on stocks in the spring of 2009.  That’s weird because I seem to remember my friend Jon and myself exchanging views that were rabidly bullish, given the inflationary fire hoses set on 24/7.  So maybe it was just the 3 of us.  Ha ha ha…  Anyway, he predicts that the bull still has legs, reaffirming the newly bullish public.

Now, here comes a MW article from a guy I actually respect, Market Hulbert:

Great Rotation equals sloppy thinking

Thank you Mark.  There is hope after all.

When the S&P 500 approaches 1600 and the public is firmly entrenched in its great rotation mindset, I am likely to sell everything.  The lone exception may be gold.  But gold stocks, commodities and US/Global equities of all kinds will be dumped hard.  The next liquidation is going to be at least as bad as the last one.

The biggest opportunities come around every 3 to 6 years in the age of Inflation onDemand, boom-bust-boom or whatever you want to call it.  There will be an opportunity to capitalize on the next bust by either being actively bearish or more safely, in cash.  Then assuming the world is to continue, in buying assets for pennies on the dollar, Prechter style.

This is a rough game plan for a big picture.  We now go back to managing smaller pictures and a continuation of the current bull phase into spring.  Watch the media follow the trends and be alert going forward.  The siren’s song of the stock tout is likely to become persuasive into the climax.

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