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BI POLAR BEAR

To steal ideas from one person is plagiarism. To steal from many is research.

Just as with Congressional party opinions, there are two distinct views of where the market might be headed. Thanks to the continuing Fed largesse the popular view is that we are headed higher - to the sky! Skeptical technical analysts such as myself feel that the road up may a bit bumpy.

As mentioned before, June is actually the month that sellers come in, at least in mid-term election years - probably after the first of the month. In fact, some technical indicators may not be what they seem:

Per Paul Desmond) of Lowry Research (not Dave Brubeck's sax player), the 2nd oldest technical research firm to the Dow Theory of the 1890s:

Since about 1990, the NYSE has allowed securities other than domestic common stocks

to trade on the New York Stock Exchange. Those securities include closed-end bond funds (that

match the trends of bonds, not stocks) plus a proliferation of interest-sensitive non-convertible

preferred stocks and REITs (which mimic the movements of the bond market, rather than the

stock market), plus ADRs of foreign stocks (that do not necessarily follow the trends of domestic common stocks. These amount to over 50% of the current NYSE!

Also misleading is the aforementioned Dow Theory that the Transports confirming the DJIA is always a positive sign - indicating manufacturing is on the rise and on the way. It was recently pointed out, however, that growth is not that great, but with fracking, natural gas, airlines charging extra for perqs., etc. that also may be not the case.

One prominent Reversal indicator for technicians is the triple top formation, which is to be found everywhere these days, as indices try to break to new highs, which they are doing lately. One study shows the 2000, 2008, and current tops are evident in the -stock market as a percentage of GDP chart. Another H&S Top is the mergers and acqs. number in the same time frames.

In this week's Barron's, Stephanie Pomboy of Macro Mavens per usual makes some unique observations, to wit: with the Fed Tapering to zero this year, who will step up to buy the Treasuries? Foreigners have slowed their buying from $800B to $100B since 2010, in hopes of weakening our dollar; the gov't demands $40B per month to run it, while the global buying is now under $10B, and the Fed is leaving !

Finally, as seen in my Sentiment blog: http://mktsentiment.blogspot.com

the all-important VIX, or Volatility Index, has broken down through the 12 handle, a rara avis that does not historically bode well in the short term - it is usually followed by an upspike, meaning stocks should correct in the next few days, unless Fed ex Machina steps in to thwart this necessary reality check. It must be noted that although the market is up today, the VIX is also up - an irregularity. Also, the Investors Intelligence Bulls over Bears polarity is at a greater ratio than 3:1 - a danger in confidence.