About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Wednesday, May 14, 2014

Stock Market --Daily Chart

With a move to new high this week, the SPX has developed a short term uptrend with
a rising 25 day m/a underneath it. the low that anchors the trend is the 1816 level set
in April. The market is slightly overbought and the trajectory of the advance is modest.
The SPX sits about mid - range of the rising channel dating back to late Jun. last year
and has been struggling to stay above the mid - mark. SPX Daily

The market is still in a powerful uptrend range that dates back to late 2012 when the Fed's
big QE program of $85 bn. securities purchases was initiated. The Fed's balance sheet
expanded by near 37% in 2013, strong liquidity support for a last year's 30% rise in the
SPX. Fed Bank Credit has expanded at a 20% annual rate so far in 2014, but players know
it is being wound down steadily but rapidly. It may be mere happenstance, but the slow
rise in the SPX since the end of 2013, appears to reflect the modest progress in net per share
rather than a still powerful but dwindling tail wind from the Fed. If this is indeed the case, then
the powerful uptrend for the SPX in place since late '12 is likely to break down as the year
wears on.

The web has its share of continuing bull cycle stories and a growing number of correction
ahead and full bear stories. It is still a bull market with defining new highs and ascending
lows, and its still a mild economic expansion with an experimental monetary policy
regarding liquidity management. And, you have to pay up to play it long. Right now, the
critical supports are in the SPX 1845 - 1860 area.

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