Another data point is the extreme in sentiment in Rydex funds assets. The leveraged short funds are at an extreme only surpassed in Feb 2003 and August 2004.
Still think there's more upside here - I'm surprised at the strength in the financials. Are they signalling the end of the interest rate cycle?
Well, the Naz made its short term low on an intraday basis on 10-13-05, the day following the start of this thread. If I'm a monkey, give me a banana, steak, and a blonde.
Bonds and notes are not signalling the end of the interest rate cycle. Watch out, if the yeild curve starts flattening, it will be bad for financials. I had been very bearish but the market's inability to follow on the down side has changed my mind. Actually I covered my shorts when Pretcher called for a crash and the market held up strong. Although I think S&P is headed to 950ish, we will probably see 1250 before that. It's hard to say, so I am staying in cash right now. Historically when the bonds are in a down trend and S&P is in an uptrend, the market has crashed. Right now there are too many bears talking about doom. I do not think the market will accomodate everyone. Just waithing for majority of the the bears to turn bullish and I'll start selling again.