I noticed an unusual level of boldness on the message boards/blogs from retail bears last night and so it figures that today they took it right up the kiester. We ended November without the pullback to 1070 I was expecting about a couple weeks back....we only got as low as 1085 and now here we are once again at about the same levels as mid November and a stone's throw away from new 52 week highs.
Today we've seen the all too familiar gap and run day which we've seen tends to eventually get filled within about 1 week's time even if the market goes higher beforehand. But not all upside gaps have been filled since March....for instance, there's one made in mid July that's still unfilled and far below where the market is now.
This is a bull market and bull markets work higher so that's why not all upside gaps will get filled. If you don't give the market respect you will get slaughtered. How many times have I said that this year? The trend is up and has been up since March and that's the respect I'm talking about. This rally has been the biggest we've seen in over 75 years and yet it has been given near ZERO respect. It’s the most hated rally I've ever seen by far. The higher it goes the angrier people seem to get. This is such a weird, weird thing to see. People are supposed to get more bullish. Just now I saw a headline on marketwatch that reads "stock tips for a rough 2010". Here's a couple of other ones "Low volume may be source of concern", "Obama leading us right to Great Depression 2". It seems so many people actually want to see the economy tank, they want a depression. Such bitterness and sour grapes. There are probably so many people out there who wake up every day hoping for a crash just so they don't feel so bad for either panic selling last year, selling into the first rally off the bottom in March, getting burned shorting the rally or a combination of the 3. I know for a fact that many people did this. These people bought into the media Armageddon hook line and sinker the same way they bought into the new era hype in 1999 and now they can't shake themselves lose of their perma bearishness because doing so will be to admit that they got hoodwinked...yet again. It's so sickening. Such losers. Now I sound angry! lol!
One thing I know for sure is that the wall of worry is as solid as granite for the bull to continue. I'm not oblivous to the "time bombs" that the bears are ranting about but my experience shows that either a)these time bombs are just duds or b)they will go off when most people have given up looking for them which is cleary not the case right now.
It could be game over the bears if they can't wrestle back control of the market shortly because whenever the market tends to be trading near the YTD high come around mid December, it typically keeps running right through to the end of the year. This happened every year in the bull run that began in 2003 through to 2006 and the situation we are in is similar in many respects to the market in 2003.
Economic reports such as the ISM and Purchasing Managers Index continue to show expansion every month and so long as that keeps happening with earnings growing the bears are swimming upstream. The economic momentum is with the bulls and whether or not you think it's a sustainable in the long term the market doesn't care as it tends to look ahead as far as about 6 months or so. Many people will call the market short sighted as a result...I call the market....the market. It is what it is. To those who use dogma when investing....good luck to you...you'll need it.
Bottom line: the gap and run action is suspicious but should be respected given unique seasonality tendencies this time of the year and the fact that the market is testing the 52 week high for the 3rd time now poised to break out. Bears have had plenty of time and opportunity to take this market down and couldn't do it and their time is running out....they got less than 2 weeks to make headway before Santa runs them over....tick tock bears....tick tock
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