That was my original line of thought, which made me wonder if this was a bit excessive in the first place. As for QE2, I would think that would be a negative. It's over.
That was the thinking to be sure. And it makes sense when the market is in a well established long term uptrend. It seems that there will always be an upward bias because of inflation, but who wants all that risk just to stay even with inflation? Are we now entering a new era when after accounting for inflation the market goes down very slowly over long periods of time, or just moves sideways? What has been the return in the U.S. market over the last ten years? Isn't it zilch? If that's so, then for every twenty up days there has been an equal down movement. Does it really make any sense to stay invested long in such a market? Have we entered a new era in which only those who can trade both sides of the U.S. equity market, such as hedge funds and astute individual traders can profit above the rate of inflation over the long haul? If that's true, then it seems that any long only buy and hold investor has either got to be very lucky in choosing just the right few stocks to hold, or if they want to broadly diversify, they will have to look for foreign markets where real gains are to be made over time.
At the rate this market is moving expect historical highs on the DOW in the next 3 weeks....By the end of July the DOW will have broken 14,000!!!! 500 points a week, 2000 more points by the end of JULY and this market will be minting many more multi millionaires!!!! Talk about a RISK free market! Again they float the market higher and keep it propped up the whole day, notice the dow only trades within 15-30 points the entire day once its propped up at the open.....as I mentioned last week on down days of 100+ points or more on the DOW the market seems more volatile....Who knows where its heading but I think they want to take the SPX back to 2011 highs which should happen by the end of next week!
Extreme overextension from recent equity rally should result in a significant retracement. S&P500 daily charts show updated rising wedge and possible head and shoulders pattern with target of 1150 when confirmed. Recent aggressive buying and short covering is revealed by very bullish candles. http://stockmarket618.wordpress.com
The only thing I am feeling insecure about here is whether I should become more careful like my personal sentiment usually does (it moves inverse to price thankfully) or if I should become a raging bull here. I've never really become a raging fanatic into a trend (which has caused me in the past to miss pretty significant portions of trends as some posters may remember from late 2010). Also this is a philosophical matter since I am not looking to increase my exposure at this time. I'm leaning towards raging bull atm. The lack of pullbacks has a lot of traders who think they're being cute by timing the market and being patient and waiting for a pullback in a bit of a hairy situation. WHAT IF IT DOES GO STRAIGHT TO A HISTORICAL HIGH GUYS?!?! (It would certainly not be impossible given that due to the ridiculous amounts of outflows a historically far above-average amount of the securities are in the hands of pros who can basically put the price where they want it (rally on no volume, hurray!!)...and they want it where it will attract some buyers, of course)
There hasn't been one buying opportunity in the last 500+ dow points unless you bought last Friday at the close and held into this Friday.....other than that anyone buying now is chasing a rally and will learn after the next pullback not to buy when the market is in rally mode but to buy when the market is selling off extremely hard. Right now you should be selling into this rally NOT buying!