Doug Kass called a top in the market today, for the umpteenth time in the past three months.  I understand the rationale behind this kind of publicity, really I do, here it is.  If he is right, they will name it the Kass top, just as those idiots on CNBC named 666 in the S&P 500 the Haynes bottom.  He will sing and dance, blah blah blah, and probably not make any money anyway.  If he is wrong and we melt up, or just keep griding upward, no one will care because guess what, no one cares about bad predictions, only good ones.  This is the way financial media works, you can’t bash the guys you need on the TV tomorrow to bring in your ratings.  Ok, enough with my diatribe on CNBC, they aren’t worth it anyway.

The broader market continues to punish bears by just not giving up.  We are certainly in nosebleed territory now after going greater than 50% upwards from 666.  The trend has been amazing, with only one hiccup along the way.  Technically, just about everything looks fine though.  All three major moving averages are now moving upwards and we are set to test the October 14th high on the $SPY of 105.50.  On a shorter term basis, the market has found good support at 102.50 on the $SPY throughout the past five trading days while going nowhere.  We are correcting over time and not price, a key element to a good trend.  Thursday’s session will be important as the 5 day moving average will catch up with the market and give it a good test.

Crude failed to break through 74.50 in a meaningful way and has now pulled back to around 71.  I still see an ascending triangle on the hourly chart here paired with a longer reverse head and shoulders setup on the daily.  I am very bullish on $CL_F here which makes me a bit scared.  If crude can’t retake the 74.50 level soon we could see major selling across the board in commodities.  That level is huge and the shorts will press hard if they sense weakness, we have seen it already in two sharp spikes down over the past two weeks.  If we do break out, I can see a complete melt up in crude all the way to 100 very quickly.  There is no more emotional market than here, momentum has always been key.

Gold continues to be completely directionless.  There will be a trade here soon, just not yet.

An interesting point of note, the 20 year US treasury bond fund ETF $TLT is on the verge of breaking out.  96.80 is the level, and would be an interesting event for the market.  Are we seeing the smart money moving back into treasuries to protect their equity gains?  Is it some other monetary force at work that I’m not smart enough to figure out? Who cares.  The price action tells me to be aware of it, so I am.

The US dollar gave some more frustration to longs in, well just about everything today.  I’ve noted the weakness in $GBP and would love to get short if the opportunity presents itself as a hedge against my energy exposure.  Britain is in bad condition, raising the highest tax rate to 50% and driving much of its financial industry elsewhere.  The $GBP can only ride on the back of the $EUR for so long.  $CAD and $AUD still look like the best candidates to break out with their currency being backed by commodities.  I’ve had my chance to get long both but have opted to go the rout of equity and straight crude exposure instead.

Overall here’s the point.  Don’t be an idiot like Doug Kass by trying to call tops, unlike him you probably have money on the line to lose, and no one will give a shit if you’re right.  The trend is your friend until it bends, and although there is plenty of scary stuff underlying this market, believe you me, getting short ain’t the right play.  I continue to believe that we are seeing a chase, rush, stampede, for real assets.  Whether there is good reason for this is suspect as the deflation camp still has a good case.  Big Ben Bernanke was reappointed to another term, at which time I recommended he be forced to shave his beard in order to obtain, but alas he did not shave that awful rug on his face.  Does the fact that he looks like he just walked out of the great depression make us feel any better about him trying to avert the next?  He will do everything in his power to keep this asset reflation farce going for as long as possible, I can’t tell you how it ends.  In the words of The Fly, the administration is going to fake it until they can make it on the economy.  I wouldn’t hold your breath on that one, but I’m along for the ride.