Summer Topping Process Could Get Messy

The stock market is in a topping process, brazenly manipulated by white-collar carnies who cut their teeth at Sloan, Wharton and Stanford. These newly trained ass-bandits have been working Microsoft shares to hold the broad averages aloft while they offload inventory to widows, pensioners and assorted other bag holders. I described in detail how this game works in a previous commentary. Even though Microsoft, the world’s most valuable company, has a $3 trillion capitalization, it costs the perpetrators almost nothing to drive the stock vertically higher, adding hundreds of billions of dollars of gaseous asset inflation (aka ‘wealth effect’) to the global ledger.

Flimsy Reasons

When last week ended, the world’s largest-cap stock was poking its greasy little snout marginally above the previous all-time high at 468.35 recorded last July. This breakout will not have gone unnoticed by a million dip-buying homunculi, since it is no longer a dip they are buying, but the latest move into thin air. Although MSFT will continue to outperform all other stocks for reasons implied above, I doubt it’s short-squeeze histrionics can drag the lumpen mass of securities significantly higher. At best, the also-rans will make marginal new highs until the last buyer runs out of flimsy reasons later this summer.

It has never been clearer that mass mental-illness, far more than invented ‘fundamentals’, is what drives stocks higher in the late stages of a bull market. If news mattered, the 1914-ish darkness of today’s headlines would have crushed the Dow six months ago.