I suppose many younger readers don’t know who Jim Finlayson is pictured above. He was the original “D’oh!” guy from Laurel & Hardy films. It’s appropriate to display him Tuesday given how weird today’s rally was. 

As ZH pointed out this morning at 10 AM and again at 11 AM, two conflicting headlines attempted to explain Tuesday’s rally. The first was based on hope while the second just an hour later was just a lie.

 Tuesday, March 1 10:00 am EST

Tuesday, March 1 11:41 am EST

Huh?

Let’s look at the data this day. PMI Mfg Index fell to 51.3 vs prior 52.4; ISM Mfg Index was still weak and below 50 at 49.5 vs 48.5; Construction Spending was higher at 1.5% vs 0.6%. That’s better but it was led by primarily highway and road construction given better weather. And, we should remember the weak data from Monday and the litany or prior weak reports. In fact PMI readings globally are very weak.

Nevertheless, stocks soared higher given another massive short squeeze as TPTB ignored most data once again.

I still believe markets are similar to the movie plot from The Big Short where shorting mortgage-backed derivatives by the major players was initially wrong as markets continued to rally against them. Eventually they were proven correct in a major way and the rest is history. This too is what’s happening in markets in my opinion. If I’m wrong, you won’t recognize the study of finance in the future.

Another reason for the rally as bulls grasped at straws was a small increase in oil prices. Russia announced that they and others would freeze production at current levels. That’s amusing since current production is the reason prices are so low. That said, everything was higher each pulling the other along.

Market sectors moving higher included: Just about everything.

Market sectors moving lower included: Bonds (TLT), Gold (GLD) and Volatility (VIX)