FRIDAY 5/30/14; EOM; Chicago PMI; Consumer Sentiment; SPX New All-Time Intraday and Closing Highs; TRAN New All-Time High

Asia markets are weak overnight. Japan CPI inflation is the highest since 1991; 23 years ago! Perhaps Japan is exiting from its two-decade deflationary funk after all? Dollar/yen 101.62. NIKK loses -0.3% ending a one-week winning streak and printing the first monthly gain in five months. China markets idle sideways ahead of the PMI data on the weekend. The Jakarta Composite dumps -1%. The Thailand SET gains +0.7% despite weak economic data. KOSPI loses -0.9%. Iron ore prices are at 20-month lows and Aussie miners weaken another day.

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

Equities log another positive month for May. For the month, the SPX gains +2.1%, INDU +0.8%, COMPQ +3.1% and RUT +0.7%. Clearly the tech and biotech stocks led higher in May. XLK is up +3.8% and IBB gains +4.1%. Airlines outperform flying +7.4% higher. Selective natty gas stocks outperform in May. EOG gains +8%. Utilities print negative numbers for the month. UTIL -1.6%. XLU -1.1%. So folks chasing yield by running into dividend stocks gave up from -1% to -2% of their capital in May.

Retailers are slapped in May such as TGT -7.4%, TJX, a darling of long traders, -6.1%, WMT -3.1% and AVP -6.1%. TIF, however, bucks the trend and leaps +14% during the month. JWN also pops +12% in May showing that the wealthy have money to spend thanks to the Fed’s policies that make the wealthy wealthier while the middle class and poor struggle.

The 10-year yield is 2.48% recovering from the 2.40% handle print this week. The 200-week MA is 2.39% very strong support. Gold dumps -3.3% this week the largest weekly decline in eight months to 1250.

Next week is sure to create fireworks with a boatload of economic data, the ECB rate decision and press conference on Thursday morning and the Monthly Jobs Report on Friday morning. The stock market continues to shake off the Ukraine turmoil, mixed economic and earnings data and the lower Treasury rates. The bulls appear unstoppable running higher while waving the Fed’s easy money flag. The VIX is at 11.40 at multi-year lows. Put/call ratios remain low. Traders remain very complacent and are without fear.