I'm not sure how accurate this last statement is based on the latest AAII investor sentiment readings...I've never seen the bearish number over 50% during a rally... http://biz.yahoo.com/seekingalpha/070504/34520_id.html?.v=2 I'm glad in the last couple of years I stopped trying to understand why the market does what it does...I get less headaches now.
Today wanst a rally and neither was yesterday. We had a selloff on monday The QQQQ is almost even with last fridays close. This market isn't out of control. If you keep playing these super leveraged short positions every .2% day is gonna seem like a rally.
Uncle Festus I looked at the chart on that link and I just think its luck that everytime investors get that bearish the markets rise. Another thing after looking at that chart I guess if you continue to buy, in the long run your guaranteed a return....Again the chart is based from the end of the bear market and the beginning of the bull market. So it really doesnt say much. Will be going on 5 years of this bull market without a 10% correction that right about now would be expected. Finally, while a pull-back after the rally we have had wouldnât be a surprise to most, this could be the very reason against one occurring -- everyone is expecting it. In April, most investors expected a lackluster earnings season, and we ended up with much stronger than expected results. Yesterday, as the AAII poll told us, most investors (54%) think the market is due for a fall, and you can see below what happens when bearish sentiment gets this high.
As long as every minor dip can be bought blindly with impunity you will have no major correction. Dip buyers need to feel like a kid touching a hot plate a few times before we can have a major correction.
Actually the relationship of bottoms/greater than 50% bearishness based on the AAII survey has been accurate for the past 20 years, not just the length of that chart.
nascrack looking weak - maybe it may pull down the market but then on wednesday is the fomc minutes - so the bulls can always spin it positively and rip the SPX up to an all time closing weekly high of 1527. then all panic buying lets loose the following week, bear funds go belly up and daytrading makes a huge comeback. very pivotal time right now.
Heck Im not asking for a major correction, how about a couple .40% down days in a row to correct these pegged needles geesh this is friggin nuts, notable the Dow, NQ is a real laggard, it so easy the manipulate the Dow with its 30 stocks, it has been pulling everything along. Its to the point were I am just not going to participate, I just cant do it any more, I tired and frustrated with the relentless buying, its just to risky for me. So I sit and earn some interest. Friggen have at it, I am on strike
even though the dow30 is parabolic up - its a daily grind up every single day. 50 point range on the YM today - how the fuck you you day trade a .4% intraday range? and yesterday was even worse. its all up to bernacke now - he can put an end to this endless liquidity driven speculation by threatening to raise rates on wednesday - barring that we'll be at 14,000 in a heartbeat.
You might not have to go on strike for more than a week, I think. Market is a little irrational, right now. The economy shows signs of slowly down, yet, the market rallies like crazy. Inflation will keep the Fed from lowering rate any time soon. No sense for market to make new highs. Price actions are saying people are being defensive at the moment. This rally may be out of steam, of course, pending next week FOMC meeting.
this whole run up has been stock buyback, private equity, M&A, carry trade, and liquidity driven - the average joe doe has not participated. sadly, he will start buying like crazy at dow 14k.