Sitting in Limbo

Sitting here in limbo
But I know it won't be long
Sitting here in limbo
Like a bird without a song
Well, they're
Putting up resistance
But I know that my faith
Will lead me on.
. . . Jimmy Cliff, 1971 (In Limbo)

Clearly, I have been “sitting here in limbo” for the last few weeks relaxing in Key West, which is a profoundly different planet. I love it! We stayed at Casa Marina, a resort I would highly recommend to anyone. So while I was limbo, it would seem as though the stock market was in limbo, as well. When I left, the S&P 500 (SPX/2907.41) was changing hands at 2885.25, and when I returned 11 days later (last Thursday), the SPX was at 2888.32. Given that, one would think not much has happened in the past two weeks, but nothing could be further from the truth. Verily, on Friday, the SPX exploded on the upside (+19 points) on what the media attributed to the JP Morgan better-than-expected earnings report, decent Chinese economic news, and Chevron’s acquisition. Yet, as market wizard Leon Tuey writes:

Hey Jeff,

Good morning, this morning, pundits are attributing the strong rally to the "surprise" results from JP Morgan and "better-than-expected" trade data from China which rose 14.2% compared to the consensus estimate of 8.7%. Why the big "surprise"? As noted in my reports, in 2013, JP Morgan broke out of a 13-year base which signaled a secular bull market. Others such as BK which broke out of a 15-year base in 2016. Also, in 2016, both BAC and MS broke out of an 8-year base. I concluded that all will post record highs in the current bull market. As for China, in recent years, numerous measures such as multiple cuts in the RR, tax reductions, increasing loans to small businesses, infrastructure build-outs, etc. were applied to stimulate the economy. Also, global growth is recovering. Hence, why the big "surprise"? The pundits are "surprised" because they don't understand the market's logic and they don't listen. As the Dalai Lama noted: "When you talk, you are telling people what you already know. When you listen, however, that's how you learn something new." From another article this morning:

"Strong bank earnings could give investors more confidence in the underlying economy, and JPMorgan Chief Executive James Dimon further underscored this message in a statement Friday, saying that, “Even amid some global geopolitical uncertainty, the U.S. economy continues to grow, employment and wages are going up, inflation is moderate, financial markets are healthy and consumer and business confidence remains strong.”

Hope the gumflappers are listening, particularly the bears! Last night, the Advance-Decline Lines for the NDX, NYSE, MID, & SPX all closed at record highs. Those who are still waiting for a "test of the December low" are waiting for Godot.