7/3/17 It Don't Come Easy

https://www.youtube.com/watch?v=anpjEN9KeJ0

My favorite Ringo Starr performance.

Global markets push higher.  The DJIA +200
points to a new all-time high!  XLE (energy) + 2%.  

But let's look beneath the surface.  The
Naz is red.  Emerging markets are up, but lagging at +0.5%.  Markets
close early today, and trading volume is thin.

Every 'smart' veteran trader I follow is cautious.  The
main driver?  After setting a new high on June 8, the Naz is down -5%.
Which has generally been followed by at least a -3% in the SPX.  A
notable exception was 2013.  An additional significant (at
least to me) 'statistic' is the maximum decline in the the SPX
year-to-date-> -2.8%.  Reminiscent of 1995, where the max
drawdown for the entire year was even smaller.  

I think it's 50/50 whether we continue higher without a
significant decline.  One of those nasty decision points where: if I
sell-> markets continue higher, if I hold-> markets decline.

In the end, it comes down to this:

(a) The pain of being left behind (as markets continue to gap
up) exceeds the pain of taking a hit (should markets sell off).

(b) It makes sense to bet on the 'exception' here (ie, a
recurrence of 1995 or 2013).

(c) 'Smart' guys are generally correct, but they don't bat
1.000 and it can pay off to fade the 'smart' consensus.

I'll stick with all positions and take the hit if/ when it
comes.