Don’t know why for sure, but I’ve been channeling some of Rush’s classics lately. Thanks to Wikipedia I now know what a Red Barchetta is…… an Italian sports car. And by the way, if you ever want a good workout, try air drumming some of their stuff. Neil Peart was/is amazing.
But back to the markets. The other day I highlighted the MUB as an example of a “fly in the ointment.” Something to keep an eye on and ask “why?” As an update, today we crossed and closed below the 98.50 level. True, money is basically flowing out of munis and back to equities, but there should also be positive momentum in MUB if “safe” money demand exists. Questions are out there about the health of our states, so I will watch this closely as a potential market “tell” for all assets.
Another key influence on the recent positive momentum in equities has been the dollar. Three consecutive down days have mirrored the week’s moves in S&Ps. We’re at a curious spot, though, between the 200-day MA and the 50-day. We will probably see a test of both as we go into February/March, but it’s also interesting to note how Gold and Silver barely moved today on a big move in the dollar.
Even a test of the 50-day at this point, and subsequent reversal, would create a higher high and put pressure once again on stocks. For now, it’s again positive for Gold, Silver and all commodities.
For now, it feels like this market is jacked up on cocaine and roids, driving it’s Red Barchetta to the moon. I for one would like to see some return to common sense trading, but it is what it is.
Trade ’em well and trade the extremes!