That Nagging Feeling

Sometimes, markets can’t seem to get out of their own way.  They manage to make modest new highs, but on poor breadth or without breaking through resistance.  Like many investors, this sets my spidey senses to tingling.

Most of the time, the markets grind higher anyway.  But, once in a while, the warning signs were right on the money.  That’s where we are today.

Thanks to FB’s meaningless stock buyback plan expansion announced Wednesday, the stock popped back above its H&S neckline and even its SMA200 (by 22 cents, go figure.) SPX was obliged to surpass its own IH&S neckline — bullish, by any measure.  But, it stopped just short of its SMA10.

AMZN, which dutifully bounced at our most docile downside target on Wednesday, had a clear path lower.  But, after hours, it announced bang-up earnings — which sent the stock to new all-time highs overnight.  Bullish, right?

So, how come S&P futures are flat as can be, and failed to push through their SMA10?  At this rate, FB won’t even break out of its falling channel.

Occam’s Razor says that when presented with two explanations for something puzzling, the simpler one is usually right.  Translated to investing, since 2009 at least: when presented with faltering markets, buy the effin’ dip.

But, Occam died in 1347, a couple of years before algorithmic trading took over the financial markets.  Pebble’s Precept says that markets sometimes move in a way that will screw over the most people (admittedly, it’s somewhat cynical…)

What gives?  Is there a reason to be nervous?

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