This market just insists on hanging onto its momentum. Earnings didn't justify the runup (ie. INTC, WMT). Economic numbers released this weak aren't all that strong and don't signal an imminent turn. The dollar languishes. Anyone care to speculate what the people buying are thinking at this point after a 20% runup into historically overbought territory by some indicators? My guess - ponzi mentality (buy higher, sell higher...hopefully) & performance chasing. climbing that wall of worry. short covering. Sure the relative strength in the market is healthy. But is the foundation?!? Does it really matter then?!?!?!?!
An uptrend is an uptrend. Better to go with the flow than to ask why. It will break down, the only question is when. Unfortunately none of us knows the answer.
The first sentance is the most important for now. As for the rest, who gives a shit? Between 1998 and early 2000 the market was priced unrealistically as well, it did not stop it from having the biggest bull market ever. The market is not the economy and on an intermediate to short term basis its not about the companies either. People who forget this get hurt. Another thing to consider is that President Bush is up for re-election next year. Love him or hate him he knows politics and what people want. I think he is smart enough to know that with the majority of American's now in the stock market we associate its health more and more with that of the economy. There are a lot of things that can be done from the Oval Office to artificially inflate the stock market in the short term, and I'm sure the President and his men know this. Brandon
Personally I have never seen the technicals so spot on. Its like knowing the end of the book before you have read the first chapter.
In December 1996 Greenspan gave his famous "Irrational Exuberance" speech, warning against buying into an ever rising market. The market continued rising for another 40 months. So the answer to your question is: There ain't no answer.
this is probably good for 100 point rally.lol 18:06 ET Semi Equip book-to-bill falls to 0.86 : The semiconductor capital equipment industry book-to-bill ratio falls to 0.86 in April, down from a revised ratio of 0.91 in Mar. Bookings figure of $737 mln is 5% below the revised March level of $777 mln. The book-to-bill figure also comes in well below the Fulcrum est of 1.01 and Fahnestock's est of 1.00.
This thread signals that the short-term peak has been reached. Sell tomorrow (friday). Downhill next week.