Rally Problems

Five out of the eight stocks of the Q8 are now lower on the year despite the S&P 500 on all time highs.

	AAPL	BAC	GOOG	GS	IBM	MSFT	F	PFE
Last	91.81	15.51	549.91	168.96	183.58	41.48	16.78	29.55
Change	-0.38	-0.14	-3.46	-0.90	-0.02	-0.17	-0.05	-0.16
YTD	11.66	-0.06	-10.45	-8.30	-3.99	4.07	1.35	-1.08
%YTD	15%	0%	-2%	-5%	-2%	11%	9%	-4%

VIX Bear Action

VIX on the monthly charts is currently at the third lowest closing point since January of 1990.  The VIX is never really good at measuring anything other than bear stress levels.  It does demonstrate the out of selling ammo condition the market seems to experiencing.   Going up lightly offered is the current mode with inter day selling coming from option maneuvering into the futures as well as some hedging positions.   Otherwise don't under estimate the damage that has been done to the option environment as every downside reach point and all upside readjustments have been re scripted.   Little priced now for a no net circus accident. 

Q8 June 5th

Q8 Latest Performance as of 14:15 Central

	AAPL	BAC	GOOG	GS	IBM	MSFT	F	PFE
Last	645.96	15.44	554.86	162.96	185.96	41.15	16.67	29.74
Change	1.14	0.23	10.20	0.57	1.45	0.83	-0.13	0.10
YTD	84.94	-0.14	-5.50	-14.30	-1.61	3.74	1.24	-0.89
%YTD	15%	-1%	-1%	-8%	-1%	10%	8%	-3%

Markets Inching

Over the coming years, the Bernanke and Geithner era will be studied as much for it failures as it will be for its successes.  One cannot help but feel they have unleashed a mechanism distorted by the carry.  A constant supply of money turned into risk capital as returns needed to beat inflation and competing fixed income benches have a extremely low bar.

Markets are always unpredictable and the mechanics in place are rarely perceivable.  Current daily low volumes and ranges remind me of years ago in the pits where the adage was never sell a quiet one.  No one is sure of the score on that rule but quiet moves inching on daily new highs or new lows usually explode into wild stop-loss ranges.  Reversals dwell on those explosive days and just when victory is claimed from the momentum side, the battle is lost.

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