Explain why I should be bullish.

Discussion in 'Trading' started by upandcomer, May 23, 2011.

  1. I do not see any reason to be bullish right now. This is what concerns me:

    - Budget deficit
    *Increased taxes and spending cuts will enact contractionary forces.

    - The housing market is shit and its recovery has stalled.
    *Risk of housing crisis, round 2.

    - End of QE2
    * Highly doubt there will be a QE3 with inflation worries.

    - Europe situation is terrible
    *Stronger dollar?

    - Market has been on a tear (up almost 30% since September)
    * Correction seems imminent

    - Signs of economic recovery are dwindling.
  2. emg


    if the market is about to crash, guru ben bernanke will implement Qe3.
  3. The obvious reason to be bullish US equities are:

    1) the market is going up
    2) the potential for a weak dollar if capital utilization picks up before the fed contracts the money supply.
  4. :)
  5. Not necessarily.

    QE-2 is not popular with the population due to inflation (food and gas prices) as the value of their homes dwindling.

    Politics does play a role. The parlor trick known as QE-3 IF implemented, will probably be just in time for the 2012 elections (with the public clamoring for ANOTHER stimulus).


    As for Mister Market, SPY, proxy for the market, just hit a 20 day low and its Bollinger width is the lowest/tightest in 6 months. Time for some range expansion.

    In other words, more to come. We'll see IF a 55 day low ($125.28) holds as support. Ditto for the number of 52wk NYSE new lows exceeding 40.

    Irrespective of QE-2, summer's approaching. Just as it does every year. Don't expect much to positive until just before (of just after) the 4th of July.