My, you sure are confident for someone who just began posting here one month ago. I smell the humbris of a noob Let us know how you feel after you've given all your profits from this rally back.
Do not let my posting 'style' fool you. New to the site, but have been on the Street since 1983. When the tide turns I will give back a good portion of open profits. And if the correction turns into a tradeable trend I will make a boat load of cash being short. But why are you talking about the correction like it's already here? This is a buying opportunity! Edit: And to put some numbers on the table; you can argue for a top until R2k gets below 740.
Just wanted to jump in, and I'm not defending anyone or slamming anyone, but the bears have to be scratching their heads at this point in the game. Maybe, that just where we get a major correction as well, time will tell. One thing for sure, if you think a 5.25 handle on the 10 year is too high and will put the breaks on a bull market, then you have another thing coming. You don't have to go back very far to see interest rates that were higher than these and led to the historic market highs. Just look at the mid-90's, rates were much higher and the market charged onward. Granted rates were later being slashed due to global issues like Russia and Japan, but rates were high in the mid-90's and the market went higher. My first mortgage I borrowed "cheap money" from a local bond issue and it was at 7.25%. That was cheap then, now a 30 year is still lower than that "cheap money". My point, you don't need a real estate boom to fuel a market that has strong underlying growth. Commodities are waking after a multi-decade slumber and climbing higher, but you also have India and China building MAJOR infrastructure. It's a supply/demand story and speculators are jumping on and inflating, but still there is demand. Industrial metals such as copper, aluminum and nickel don't climb as inflation hedges like gold. They climb because of demand. The globe is growing and corporate profits are as well while their stocks are stagnating. PE compression is the new reality. I'm no perma-bull nor perma-bear, but with earnings growing for major multi-national companies like 3M, Boeing and GE. I'm not going to stay substantially short anything. Lower quality companies are what have been climbing higher and making highs, not blue chips. I think we are getting close to some sort of inflection point. Maybe rotation out of small caps and into large caps which will benefit substantially from a falling dollar, but no crash. Personally, I'm building my cash and waiting for the pullback, but China and India will have to crash before this market does. China and India are slowly becoming consumer nations as well, not just cheap suppliers. This market is not an inflation story played through gold or an irrational exuberance story that needs to be dampened by deflating the "housing bubble". It's a global expansion/demand story. All the technology of the past decade is starting to pay off in the less developed worlds and capital is flowing towards them. Now infrastructure builds and commodities are as well. Just some thoughts.
I actually think that the market could go either way at this point depending how the FED feels about the current inflationary environment. Since I daytrade, my timeline is rarely more than 1 or 2 days out and I just don't understand why bulls refuse to take profit at such an obvious short-term peak. Seems piggish to me.
Bears what bears? the bears have better since than to fight the election cycle of the party in power. IMO voters dont care as much about the markets as they do about removing this corrupt power base in washington. Consumer sentiment is very high yet Bush and this republican congress approval rating is lower than ever, talk about a divergence, the votes simple do not trust them, to many lies.