Jobless claims shocked the market this morning, and so did retail sales, with both disappointing the market. I rode the market higher on the uptrend (top left), and got out profitably. I'm glad I did! I lost about 1/3 of my gains. Now, following these two data disappointments, the market has shown a sharp reversal and is still trending lower. This may be the beginning of a much-needed wake-up call for Wall St.
Over the past few months, it has been reading lagging and coincident indicators as signs that a second recession is not going to happen, while shrugging off the leading indicators that are flashing red flags world-wide. John Hussman eloquently covered this in his weekly market commentary last Monday.
Somehow, I suspect that today's disappointing data will be shrugged off as well. It will take several shocks to the market for the world's most entitled group of people to awaken to the awful reality that recession is soon coming, and the Pollyanna Party, no matter how elated the euphoria, is not going to stop it.
