"Will and Kate to wed in dour economic times"
Right underneath that headline was this one
"Midcap stocks rally above 2007 high"
It's yet another example of how media sentiment is badly lagging the powerful bullish message of the stock market. Here we are with the market exploding to the upside for nearly 2 years and consensus sentiment out there from the media and main street is that the economy is still "dour". And it's not just this one article that proves this. I've proved it with several other examples in the recent past. And the bears want you to believe that everyone is bullish. Do you honestly think a bull market top is going to be made when the general public never turned even remotely positive about the economy with monetary conditions still extremely accommodative?Good luck with that....never has a bull market ended this way. Bears keep pointing out how sentiment surveys and insider selling are screaming bull market top. I'm not going to go over again why these bears are misusing these indicators. Suffice to say that at best they can indicate a ST/IT peak but even that has been stymied for over 2 months now because of group think. Then of course, there's the conspiracy theories about how the fed is buying stocks or the dismissal of the bull market as simply a result of the flood of liquidity in the system. But not a fucking single mention is made from these losers about how earnings are poised to make new all time highs....not one. Do you think that maybe, just maybe the bull market has been the result of these earnings and not POMO, QE2, conspiracies and other bullshit? Nah, couldn't be....it's gotta be the conspiracy...because this way these losers don't feel so bad about themselves for losing money or missing out since they were helpless against such a supposedly rigged market. What a bunch of fucking pathetic, bitter, miserable and in denial SOBs.
What an interesting time to be involved in the stock market. It's complete bizzaro world from when I first ever got involved over 12 years ago. Never did I think I'd see the day where people keep complaining about the market being so strong making new highs! Think about how fucking retarded and sad this is. Aren't most people who play the stock market supposed to like such environments? Funny how nobody was complaining in 1999 and early 2000 when the market was soaring then. That's because the herd was euphorically long and had no problems chasing. Now that the herd has largely missed out or shorted this monster of a bull market you here all this whining and complaining. Fucking losers. Future generations of investors are going to look back at this period and wonder how people could have been such stubborn, miserable SOBs just how we look back to 1999-2000 and wonder how people could have been such suckers in buying tech stocks at such insane valuations. I don't meant to sound arrogant....I'm just venting here.
Let's put things into perspective here in the medium term. If you annualize the 4.5% gain in the SPX year to date you will get a return of about 45-50%. Clearly that's not going to happen and so it means the market is "ahead of itself" even if we are going to have a good year. That means that sooner or later we're probably going to get a consolidation phase similar to what happened in the summer but I don't think the downside will be nearly as severe. Perhaps it will be due to concerns about Emerging market tightening, the ending of QE2 in June...who knows for sure what will be the trigger. This consolidation phase will likely shake out the Johnny come lately bulls who are weak handed.
When does this consolidation phase begin? Probably when all those correction callers become humble and just STFU. In addition, there's nothing stopping the market from going higher for a while still and then cooling off for several weeks/months later on. With the market closing at fresh 29 month highs and plenty of top picking still going on, it's quite likely that we haven't seen the IT peak just yet. Even if I'm wrong about this, I'm sticking with my core positions and cash cushion.
Let's put things into perspective here in the medium term. If you annualize the 4.5% gain in the SPX year to date you will get a return of about 45-50%. Clearly that's not going to happen and so it means the market is "ahead of itself" even if we are going to have a good year. That means that sooner or later we're probably going to get a consolidation phase similar to what happened in the summer but I don't think the downside will be nearly as severe. Perhaps it will be due to concerns about Emerging market tightening, the ending of QE2 in June...who knows for sure what will be the trigger. This consolidation phase will likely shake out the Johnny come lately bulls who are weak handed.
When does this consolidation phase begin? Probably when all those correction callers become humble and just STFU. In addition, there's nothing stopping the market from going higher for a while still and then cooling off for several weeks/months later on. With the market closing at fresh 29 month highs and plenty of top picking still going on, it's quite likely that we haven't seen the IT peak just yet. Even if I'm wrong about this, I'm sticking with my core positions and cash cushion.
Hey man, you do come across as a tad bit arrogant but at least you speak your mind. Just would like to share a perspective here. It is actually quite possible to have a dour economy in the midst of a bull market (by the way, I do not like to classify market into bull or bear because it is only after the fact that we can know for sure what animal it is). For most people, the only way to feel if the economy is strong or weak is whether their livelihoods have improved or worsened. Payroll for the majority of the workforce is still weak, other than the few lucky "stars" on Wall Street and main street. In fact, many people are still jobless. Inflation only makes it worse for these people. Therefore, the economy is indeed dire from their point of view. However, this point of view has no relevance to the movement of stock markets because there are other factors at work to influence stock markets. Those who want to be successful in investing must be able to recognise this point. I am neither an optimist nor a pessimist but being a realist, I know better than to fight the Fed. Although I agree with many of the things that these "losers" are saying, I will follow the market wherever it is going. I do not let my own views cloud my investment decisions.
ReplyDeleteHey Patrick how are things? I figured my last post may have ruffled some feathers...and by the way, I don't mean to categorize everyone who has a bearish view on something as losers....the losers I'm referring to are those who have been stubbornly bearish betting against the market or sitting out pretty much the entire time since March 2009 to the point where they are consumed with so much hatred and bitterness that they can't see or refuse to acknowledge any legitimate reasons for the market to be rising.
ReplyDeleteThe other point I've been trying to hammer home for quite some time is this...anytime you see the stock market make a strong and persistent move like it has been doing for 2 years while the general public feels the opposite of what the stock market is suggesting, it has always been the case that the trend in the market is still early. I have never seen any major market trend end until there is at least some sort of public recognition of it and right now the public still thinks we are in recession. Do you think a bull market like this will end with this sort of sentiment? Show me one that has.
As far as your comment regarding the recognition of bull and bear markets go...well..and again, not to sound arrogant or scolding but what more proof do you want that this is at least a cyclical bull market!!?? The market has been rising for nearly 2 years and is up almost 100% since the bottom while earnings have turned up sharply from depressed levels poised to make new all time highs. If that's not a bull market I don't what what is! It was surely no bear market rally. I realize that it would have been fair to question whether we were in a bull market or not in the spring or summer of 2009 but come on now....what more are you looking for? SPX 1800?
If you are not ever willing to classify a market as bull or bear I don't see how you can have any kind of conviction or have an appropriate strategy because you want to be primarily long in bull markets and primarily short/cash/FI in bear markets. But hey, if you're making money using the same strategy in bull or bear markets then bravo to you and screw what I just said.
I totally hear you mate. The reason I do not like to classify market into bull or bear is because I do not wish to be too entrenched in any one camp and risk being slow to react when market changes. Hmm... I did not deny that this looks like a bull market and I'm certainly positioned for that at the moment. As for conviction, other than conviction for my strategy, I do not have any other conviction and that is a key part of my strategy as well.
ReplyDeletefair enough....I hope you're keeping well.
ReplyDeletecapitulation?
ReplyDeletehttp://www.apartofny.com/last-post-until-we-start-to-move-down/
Thanks. Hope you are enjoying family bliss with wife and baby.
ReplyDeleteDennis,
ReplyDeletethat guy is a perfect example of the losers i've been talking about. notice how he says it's all gonna end badly once this fed liquidity rally runs its course. that's not capitulation. true capitulation means acknowledging that you were wrong and having respect for the trend you were betting against. this guys shows nothing but contempt towards the bull market and once the market drops 1-2% I'm sure he'll be back trying to short again.
these losers remind me of the burned dot com bulls of 2001. all they did was whine and complain and hoped that the former glory days would return....well, it took 10 years for them to return but now most of those guys have either quit the game or turned bear!
Most of the bears you see out there were formerly burned bulls most likely from the dot com days. Twice the sucker they are
Long term this guy is definitely wrong. But short term it is a bit tricky. I just read this story oh yahoo finance: http://tinyurl.com/4d4hk6o
ReplyDeleteLooks like the retail guys are finally embracing the 2 year old bull market. But you don't need me to tell you it's never that easy. Just like last April we could be see a quick pullback to shake out some of the late and weak longs. But I do not expect the magnitude and duration as sever as the last one.
Nice find Dennis. I'm going to talk about this in my next post
ReplyDelete