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Date Posted: 9:10:20 5/01/23 Mon
Author: Jasper
Subject: Rick Ackerman

.
What Bad News?

And yet the stock market continues to chug blithely higher, well capable of achieving new record highs despite big layoffs by large companies, softening real estate prices and dim prospects for corporate earnings. We should have learned by now that Mr. Market can ignore bad news for as long as he pleases. Thus do share prices continue to ratchet higher on cooked data and faint support from the economy. Under the circumstances, many of us grow more skeptical each day toward a seemingly heedless bull market.

So why is your editor, a true bear’s bear, so bullish on stocks at the moment? The chart above explains why. It shows Chipotle (CMG) shares in a vertical climb that projects to as high as $2739. That would be a 34% gain over its current price. My technical runes suggest that this is very likely to happen. Mainly, it is the way buyers shredded the red line, a ‘midpoint Hidden Pivot’ resistance. Whenever this telltale gives way so easily, especially in the context of a bullish pattern as compelling as this one, it means the D target will be reached.

A Bull-Market Illusion

If so, it will not occur in a vacuum while other stocks languish or slip into a bear market. CMG is as much a proxy for institutional mindset as AAPL, a bellwether featured here many times in the past for the same reason. The portfolio managers who control mega-cap stocks want them higher simply because sticking with a half-dozen-or-so stocks as they continue to rise on autopilot has been an unbeatable way for even the laziest and stupidest among them to make money hand-over-fist. All they need do to exploit the rise of AAPL, CMG and a few other world-beaters that have vivified the illusion of a robust bull market is to stay out of the way. Absent their participation, short-covering on thin volume will lift stocks without requiring much capital. That’s because gap-up openings that have become routine over the last year or so have enabled stocks to waft into thin, frictionless air. It is a perpetual motion machine of sorts, at least while it lasts.

Bottom line, if you’re going to rely on someone else’s bullish forecasts, wouldn’t you rather it come from a disinterested technician who hates the market than from some permabullish simpleton who doesn’t believe in recessions and thinks stocks are headed to infinity?

https://www.howestreet.com/2023/04/why-a-permabear-is-certain-were-going-much-higher/

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