Tuesday, Sept. 20 2011, 11:34 AM – Markets Today, All One Trade, Peak Near?

Ben Bernanke had better announce something big tomorrow or the market will likely head lower. I think he most likely will, as I wrote in some detail yesterday. A Bernanke good report is being priced into stock prices, along with the report early today that the Greek Finance Minister said a deal with the IMF to receive $11 billion in badly needed funding is very close.

Stocks in the US are up 1.1% today, about the same in Europe, maybe a little more. Gold and bonds are up too, even commodities.

It’s the “all one trade” scenario again – just about everything except the US dollar goes up and down together. To play that, institutions are increasingly just buying and selling broad-based ETFs. Why go to all the bother of picking individual stocks when they all seem to generally move together?

A market historian and technician that has a very good track is calling for the markets to top out shortly and resume the bear market. The McClellan Oscillator, a pretty reliable indicator of short-term peaks and troughs is up into peak numbers, though it has been higher before. On the other hand, a short-term resolution in the Greek liquidity crisis and a good report from Mr. Bernanke could send the market higher by at least several percent. You remember that his announcement of QE II in summer of 2010 sent the markets higher for 10 months.

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