Asian stocks closed mostly higher, 10 out of 16 markets we track in the green, last night. Europe’s mixed, 10 out of 19 bourses in the red. U.S. equities (save for small caps) are somewhat back (Nasdaq still) in rally mode this morning: Dow up 94 points (0.33%), S&P 500 up 0.36%, Nasdaq up 0.96%, Russell 2000 down -0.05%.

The VIX (SP500 implied volatility), after a mammoth 15% rally yesterday, is taking a breather, down -1.78%. VXN (Nasdaq vol), on the other hand, continues to rally this morning (at odds with the rally in Nasdaq stocks), up 2.11%.

Oil futures are up 1.29%, gold’s up 0.51%, silver’s up 1.30%, copper futures are down 0.84% and the ag complex (in the aggregate) is up 0.41% as I type.

The 10-year treasury is getting hammered (yield rising) and the dollar’s off a titch (-0.07%) after being bludgeoned yesterday.

Our core portfolio continues to hang in there, albeit barely this morning, up 0.17%, with 12 positions in the green, 6 in the red. Leaders are emerging market equities, silver, tech, materials and ag commodities. Leading the losers lower are utilities, healthcare, energy, Verizon and staples.

Suffice to say that we have the definition of a fragmented market to work with these days. In other words, market breadth stinks to all get out!

Yesterday’s action was a striking example:

The Nasdaq gained over 1%, while its components gaining on the day numbered 969, 1,711 posted losses. Hmm…. As for volume yesterday, the up volume/down volume metric for the New York Stock Exchange was 1287/3083…. Again, Hmm….

Now, days like yesterday would be dismissed as the occasional oddity of markets, if, that is, they weren’t so doggone common, as has been the case of late.

This morning for example, while not as dramatic as yesterday, has the Nasdaq up nearly 1%, while, once again, declining stocks (1,424) lead advancers (1,239).

So, what’s all this mean about the future? Well, of course time will tell, and with markets we can’t know for sure. Although we can ponder:

Are things like bad market breadth, record concentration in a handful of stocks, record high valuations, stock splits, etc., phenomena that typically occur around market bottoms, or market tops?

Well, we don’t need to call in rocket scientists to tell us that our top-heavy ship’s in danger as it rockets toward market-Mars against the gravitational pull of the most difficult macro conditions in a century. 

So, then, does that mean “the market” can’t maintain its orbit, if not continue to venture into the far reaches of space, farther than the eye can see? 

Of course not, anything — Mars landings even, as we’ve learned — is possible! 

Well, okay, so is the rocket structurally sound, and, thus, should we just throw caution to the wind and jump all in for the ride? 

Well, no, and no… I mean, no, and no — not if we’re going to be your pilots 😎…

Have a great day!
Marty