There are bear market rallies and then there are bear market rallies based on nothing but hopium and prayer.
Well, this author is all out of prayer, never smoked hopium, and believes Mr. Bear is returning to kick some ass.
There is a large segment of the financial media, political prognosticators, and of course social media who has an entire career of preying on the bubble loving public. If history is any guide, and it usually is, a bear market rally can achieve a new all time high. However, with declining volume on a daily basis the meat, or commitment behind this rally is fizzling quickly.
So what was the stimulus again for this?
That’s quite simple, a Presidential pause in his own tariff wars with the world in addition to earnings reports which everyone knew would be bullish as Q1 wasn’t that bad for those companies that were able to juice things one more time.
Since the trade negotiations. outside of a Memorandum of Understanding with the United Kingdom, have been going nowhere it’s logical to conclude that there will be another tariff suspension extension. Until of course the President has another temper tantrum.
Meanwhile in market world, the numerous gaps left in some of these index and individual stock charts is a sight to behold. Instead of going through every index or equity, let’s just focus on the S&P 500 which should be an eye opener for all.

If things happen, as yours truly estimates, the gaps in the chart above will get filled and probably with great violence starting within the next 60 days or so. This would erase all of the progress and leave the bulls grasping and/or blaming DC for its incompetence accelerating the decline.
If one looks at the one year chart, it looks a tad more unnerving:

A correction near the 5300ish level would shake the bulls faith but still leave markets in an area where a possible recovery could occur. The damage however would all but ensure a range bound year end between 5200 to 6000 leaving bulls concerned about every news event and bears licking their chops for one more miscalculation.
That’s where, once again, longer term charts tell the tale of the tape. The one last gap is way, way, down and if it were to be violated, God help the hopium huffers.

A break of my newly titled “FAFO Line” and we’ll be testing some levels unseen since Trump v1.0.
Thankfully, no one foresees anymore political or economic policy mistakes for the remainder of this year; right?