Normal Bears in Hibernation - Panda Bears (and Bulls) Winning

We said yesterday we'd look to get more aggressively short on a break below S&P 920... in the last hour we fell to 921 but bounced so bears remain in hibernation other than Panda (Obama) bear. (remember, 2009 is the year of the panda - ignore all bad economic news; that only matters on Main Street; it's panda time on Wall Street)

As we showed in the weekend summary the next range "up" is S&P 920 to 950, which will take us to mid November highs. If we "clear and hold" 950, than the next range is 950 to 1000. From a purely hope standpoint, it would seem like a rally into S&P 1000 on Jan 20th could be in the air.

Like we said, we are not chasing here - and I'd like to see how the market handles the retail reports Thursday and jobs report Friday. If they start buying retail stocks on "it was atrocious but it can't get worse than this" logic, and "hey 600,000 people lost jobs but it can't get worst than that" logic on Friday than we probably rally right into inauguration. When all the facts on the ground mean nothing and people continue to relentlessly buy on hope and/or "the coming recovery in 6 months" you just have to go with the flow. We've had similar moves in late 2007 and multiple times in the first half of 2008 - the facts on the ground were degrading but the market was whistling past the graveyard. The problem with this is one needs to jump ship quickly when things turn; the market takes away much quicker than it gives. Somehow in the stock market there are long periods where bad news is ignored and then suddenly in a 2 week span everyone wakes up and accepts the bad news and the market corrects rapidly.

But for now drink your Kool Aid, look wistfully out the door as gas rises to $2.00+ (awesome for the consumer), and celebrate panda time.

• But if the price of gasoline continues rising, it may become another headache for consumers worried about their jobs and the dropping value of their homes and investments.
• Rising oil prices have helped push the wholesale price of gasoline up by 40 percent since Dec. 24, leading to predictions by energy experts that retail gasoline prices will spike by as much as 25 percent in coming weeks.

But not to worry - even as gasoline prices have fallen from $4 to $1.60s with no real pickup in demand, a country full of consumers who are not increasing consumption of a commodity that costs $1.60 a gallon, will soon be purchasing $20K cars and $250K homes. Thesis vs reality. The "hope mongers" simply do not wrap their hands around the fact this is a consumer led recession; they are STILL stuck in their "corporate led recession" thinking of the early 90s and early 00s. You can lead a horse (consumer) to water (the mall/an empty housing lot/a car dealership) - but you can't make her drink.