Capitulation

For some reason I get the feeling we will hear some news soon that will capitulate the market to the upside (futures already at 982, maybe I missed the news...Listening to shoutcast groove salad). Not sure if this news will be GDP related or a dollar smashing announcement (the HUI and corn charts would support this scenario). You heard Fauxbama talking about the end of the recession as well as the coordinated campaign promoting the same sentiment. The goal is to use confidence to change the laws of mathematics. It might work for a little while.

Tread carefully here. Being overbought means nothing... Be a trader first and an economist after the bell. If you force your bias on the market then you will meet Jurassic Sparc. Even after the recent melt-up it still feels "trappy". I also noticed the /NK stalled at 10k but has since lifted off.

If we are said to be out of a recession soon (possible) then you can expect another longer, deeper recession to follow. It will look somewhat like a 'W' except if you hang about elevent trillion in debt on the right leg of the W until it breaks off into a sideways hell.

[addendum] For this reason I'm not too confident in the EWZ trade (56/53 put spread). I will drop it like a bad habit if the reflation trade kicks in. For now it's still a wait and see approach.