SPY defies gravity

SPY breaks above the upper trends today, thus invalidating my call for a pullback.  Sure, this could be a head fake but the moce is impressive regardless.

The bank stress tests announcement tomorrow afternoon should be fairly anti- climactic with the controlled leaks by the feds the past two days.  I guess we can all act surprised just to humor our public officials.  Thanks guys.  Nobody in Washington is taking any chance that a pullback might rock this teeetering house of cards.

Blatant market manipulation notwithstanding, we seem to have renewed confidence in the capital markets with zombie banks going parabolic upon announcing that they have to raise capital equal to the GDP of half the globes' nations.  

Richard Berntein, formerly of Merrill Lynch, speaking on Bloomberg today (via http://invivoanalytics.com ), points out that a new bull market would have new leadership.  Since we are seeing the same old tired nags leading this race, he surmises that this is a bear market rally and implies caution.  Bernstein also noted the excess capacity in housing, autos, the financial industry and almost all other sectors as well, and notes that it will take "years" to burn this off.  Deflation is here for a while.

The credit induced orgy of consumer spending is likely a thing of the past, so new leadership is necessary for a recovery.  Tech companies with little debt who make essential items for our economy seem like reasonable strategies for a new bull.  

Okay, calling tops is a fool's errand, and that's a lesson we'll have to re-learn a few times.  Keep hedged, longs and shorts, as always.  I would say "sell the news" on the banks stress tests, but alas, there is no news.