Stocks Rally, Then Fall, In Late-Day Trading

Roughly 2:15 pm EDT, all of the major indices in the US began selling off, apparently for no reason.

Probably more to the point is that the Dow Jones Industrial Average poked above the magical and mysterious 18,000 mark a few times during the session, but could not sustain a rally beyond it.

As has been often suggested and sometimes proven, if the stock market is made up more of psychology than fundamental reality, 18,000 is a price too far to pay for the Dow, even for the most bullish bulls in the china shop that is the NYSE and the NASDAQ.

In any case, stocks closed well off their highs and only a little closer to all-time highs, last seen more than a year ago.

This doesn't appear to be a positive sign for stocks; the truth is that stocks are selling at historically high valuations, a condition that normally precedes a sharp selloff. With the Fed heavily "invested" in stocks, today's sudden reversal of fortune does not bode well, either for the Fed's monetary gimmickry nor for rate increases any time this year.

Those who believe that stocks are the only game in town - and, there's an acronym for that: TINA (There Is No Alternative) - hang on to your hats, gents. The drop may be sudden and deep.

Ouch! That Might Leave A Mark:
S&P 500: 2,112.13, +2.72 (0.13%)
Dow: 17,938.28, +17.95 (0.10%)
NASDAQ: 4,961.75, -6.96 (0.14%)

Crude Oil 50.38 +0.04% Gold 1,247.30 +0.02% EUR/USD 1.1358 +0.04% 10-Yr Bond 1.71 -0.58% Corn 427.00 -0.06% Copper 2.05 +0.17% Silver 16.41 +0.07% Natural Gas 2.86 +1.82% Russell 2000 1,179.97 +0.26% VIX 14.05 +2.93% BATS 1000 20,677.17 0.00% GBP/USD 1.4540 +0.02% USD/JPY 107.3025 -0.03%