Coolhand's Market Analysis

Especially if one is short.

This market is certainly acting as though all of our global economic problems are melting away. I've noticed that several junk bonds that I follow have been steadily moving higher in recent weeks and today a high yield REIT that I own (IVR) was up more than 5%. That suggests to me that the intermediate term may continue higher for awhile and that the downside may be very limited.



But I can't help wondering if the broader market is pricing in Wednesday's EU crisis summit. Followed by a sell-the-news reaction. Seems a bit too obvious, but we'll see what happens.

Here's today's charts:



NAMO and NYMO remain on buys are are sitting at high levels. But there's still no shortage of shorting and hedging in this market, and as long as that continues, we can move higher still.



NAHL and NYHL also remain on buys.



TRIN and TRINQ are also on buys and reflect only a modestly overbought market believe it or not.



BPCOMPQ is ramping higher and crossed that upper bolly today, which flips it back to a buy condition.

So all signals are back to buy, which keeps the system in a buy condition.

As hard as it may be to believe this market can just run away to the upside, that's exactly what's been happening. In large measure due to the extensive shorting going on in this market. I remain wary though, especially regarding the EU summit and what it will yield and in turn how the market reacts to any announcement over the coming days.

I'm long in my ROTH IRAs, but TSP is another matter. I prefer taking less risk in that account, and this market dishes out a lot of perceived risk. I doubt the party lasts, but it could be awhile before we begin another sustained down leg as holidays approach.

Or not. One never really knows anymore.