A Twisted Sense of Humor

It is worth remembering that the market has a history of displaying a twisted sense of humor at the most inopportune of times.

Specifically, the S&P 500 Index bottomed precisely in early-March 2009 at 666, the biblical "mark of the beast." Before that, during the October 2008 crash, there was a session where the only green stock on the New York Stock Exchange was CPB (Campbell's Soup, before it switched over to the Nasdaq last year) which, of course, had people thinking the market was pricing in Great Depression-esque soup lines to come with CPB in high demand. 

Fast-forward to today, and we have had a weak underlying market in equities for a while now. However, the indices seem to be constantly "painted" to new highs with 24/7 bullish Fed and Trump headlines, on top of the AI circular financing extravagances. As important as Home Depot is to the housing retail/consumer complex, we may have the perfect stock for the market's twisted sense of humor this time around: Sherwin-Williams, the iconic paints and coatings company based in Cleveland. 

As you can see on the second quarterly chart, below, SHW has been a monster winner for well over a decade. All good things eventually come to an end, however. And just as we have seen with Costco and other consumer monsters, the first daily chart for SHW shows notable weakness of late, threatening a further breakdown as we speak from prior well-defined support, all below a declining 200-day moving average. 

Perhaps the message of the market this time around is that you cannot paint the tape forever, just as consumers cannot spend endlessly on home upgrades and updates. 

Finally, one would think the apparent slam-dunk rate cut coming this FOMC on Wednesday ought to be goosing the likes of SHW higher. But that is clearly not the case. Again, The Fed only controls the overnight Federal Funds rate and not the long end of the curve, the latter of which has been pushing higher of late.