Stubborn Traders not listening to the market

There's a fine line between "justifiably" fading a rally and stubornly going against the grain. When the market is in a well defined downtrend then shorting rallies makes sense because it's likely just a temporary bounce before the downtrend continues. I can understand if traders faded the rally in mid-late March when the market got overbought and got stopped out because putting this trade on worked practically every time before and at that point in time it looked like a temporary bounce. But when the market didn't fall apart as it always did when it hit such overbought levels and made further strong gains after a brief pullback that should ring alarm bells because that has not been the behavior of any of the bear market rallies we have seen before. At the very least, no matter how bearish and skeptical you are you should step aside and review your posture if what was working before is not working. Ask yourself "is something really different here?" and investigate.

Practically every trader knows the basic rule of trading "the trend is your friend" yet it seems most traders don't like this rule and don't like a bullish trend these days. It seems they would prefer the market to go down to satisfy their ego and so they go against the trend. When things go their way it's because they felt they had an "edge" but when it doesn't go their way they cry "this is bs manipulation!". They don't for a second consider even the possibility that they are wrong or that what they predict may not traspire in the near future but rather at some time in the far away future. Nope. They are convinced without a doubt the market will crash and crash now because "by right" it should.

And what do they use to back this claim up? Bearish articles and statistics of course with no regard to bullish information whatsoever. I find the typical retail trader all follow the same bearish blogs for information. The CFA level 3 program has a chapter in behavior finance and I get to see it in real life....Anchoring, overconfidence, loss adversion, herding, and confirming evidence trap.

Unlike previous rallies I'm not seeing the bears sweating. I don't expect all of the bears to turn bull but rather that they respect the upside risk of the market and lay off on aggresivily shorting it. Instead, this time around I find the bears have become angrier and bolder as the market moves against them. I hear a lot of people say (even the optimists) that the market has "moved too far too fast". Really? Did the market not have it's biggest collapse in history just about 6 months ago? Then why is it so hard to accept the notion that the market is recoiling from the most historic oversold condition ever and that we can have a very powerful rally to the 200 DMA to offset it?

Frustration is starting to mount with the bears big time and slowly one by one, they are stepping aside. But I still see plenty of wrong way bears stubbornly maintaing or adding to their losing FAZ and SRS positions. The complaceny they are showing is very reminisant of some of the bullish strategists I read during the collapse. They too insisted the market couldn't go down more because their trusty indicators suggested it couldn't happen. Bears are now insisting that the rally can't go up higher....that's is all bs manipulation.

We all know that earnings (or potential for them) is arguabley the most important fundamental driver of stock markets. First Call reports that S&P 500 Q1 earnings so far are 15.7% over estimates, vs +1.6% avg surprise since 1994. and had a -9.4% avg in the past 8 qtrs. . Bears of course will dismiss this data saying that earnings were low balled. There's really no sense in arguing with them I guess.