The economy isn't growing much man, but that is not the point. You're telling me that back in 2008 and early 09, companies were fairly valued? No way. Companies are now getting near what they're worth. Also, money has to go somewhere, and when all is said and done, the best place for all that money right now is in US Equities and commodities. OTHERWISE, Ben corrects us to the upside. Go ahead, fight the Fed, you'll lose. Goldman is LONG, and is upgrading the market. Go ahead, fight the institutions, you'll lose. There are two options here. 1. The market bottomed and we are now bouncing from that bottom. People are now CHASING the move, adding to their winners, or buying whatever else is still grossly undervalued (financials, homebuilders, etc). If the economy does recover, no one wants to be left gambling at absurd highs. 2. The financial system collapses and everything trades to 0, the end of the world!!! In this case, it doesn't matter if you lose money because money will be worthless. All that will matter are guns, food, gasoline, cars, and hot chicks. If you believe in the end, why aren't you stocking up? The market crash years ago created PANIC, and stocks traded to absurd levels. Hence, the market bounced. In the dot com era, stocks traded to absurd levels. Hence, the market tanked. Supply and demand, you need to realize that asset prices are a function of supply and demand. It doesn't matter how slow or fast the economy is growing. All that matters is the future supply demand ratio. Trading is a psychological game between players, full of rationality, irrationality, fear, greed, self fulfilling prophecies, etc. Now it is your turn. As a bear, what is the catalyst, or why will we correct this winter? It will take a bunch of shocking earnings misses, or a catastrophic event imo Dips are being bought and people selling their long positions may have to re-enter when they realize they are now underexposed... People shorting will get squeezed if we continue higher. I see more probable supply / demand catalysts to the upside than the downside. Remember, Goldman is upgrading the market. That means they are already in, and NOW you get that frothy move up where things become legitimately overbought. Prices will be driven higher, and they will use the euphoria to take profits. And don't forget, the potential bubble no one talks about. APPLE. As long as Apple is growing, the Q's are going HIGHER. Once their growth is confirmed as stunted, then I'll be more worried. Are we going to have Nasdaq ripping higher and the DOW dipping to lows? I doubt it... We saw the market bounce without financials. Now financials are catching up. So, if they come out and they don't scare the sh!t out of everyone, why would they sell off? So, possible causes of a sell off 1. Shocking Apple results 2. Scary words from the financials 3. Catastrophe somewhere around the world If you are looking for a "natural correction," I hate to say it dudes, but we already had it, but instead of correcting 7-20%, we consolidated = mega bullish We are going to grind slowly higher (like we have been), until the shorts get squeezed and the non participants begin to participate. Then we get our big next bull leg up. From THAT top, I think you get your sharp correction. Remember, by that time, food and gas will be expensive, stocks will actually look pricey and there will be real risk in the market. Just before that time, the VIX will be lower than it is now. When the commodities get priced to where they absolutely inhibit growth, you short just before the euphoria wears off. That is my long term prediction! Of course my prediction will fail if any of the 3 things happen above.
Going by the COT, institutions are massively short while the FED has printed not nearly enough $$ to justify current price levels, so what is benough fought by shorting here is the masses who are hungry for yield. You trust Goldman to tell you what its positions are? hahahaha. Nice
why is the market flat after the great reports from JPM and INTC? i am getting really worried about the bulls here