Triple Top?…

Well, we got one broad index over the hump and the other dancing in the shadows of a record close. You’d think the bears would be hiding in their caves and bulls making more room on the bandwagon. Instead, you get lots of talk bout the current hesitation and whether that may portend something mighty negative for the long side of the equity market.

I’m not about to make a prediction as to whether we confirm a triple top and turn tail at such a juncture…but I would point out that the two previous occasions the SPX traded to these levels there was some serious headwinds. The market recognized these issues to be quite problematic and tanked accordingly.

My reaction this time around is “What?” As in, what is the real threat lurking this time around that would pull the rug out from beneath the bulls? Certainly lots of things out there that could prove to be problematic – Iran/Israel issues, ongoing quagmire in Washington, still-sluggish recovery here, Eurozone issues that have yet to be truly resolved, Chinese growth prospects (or lack thereof over the short term), the question of what happens when an accommodative Fed curtails its QE program and the likelihood inflation will set in thereafter, etc…etc…etc…

From that list, many things could happen. The only certainty is that the Fed will eventually reverse course and we will be looking at a less accommodative environment…which will undoubtedly translate to marked inflation on a comparative basis. Surely doesn’t stead well for equities down the line………But is such a fear likely to trip the market NOW for anything other than the short term? Food for thought…

We shall see!

~LH