Seriously, where is the fear? There is so much that is wrong with this type of trading action; I cannot begin to describe my thought process. But being the contrarian that I am, I find myself long by 85% of my assets into the top end of the recent trading range. I am not scared, at all, since volatility has been decimated to nuts. All of the issues facing the world today have been vetted and dealt with, directly or indirectly. The point is, the market is aware; therefore, downside surprise is doubtful.
Back in 2008, Bear Sterns and Lehman collapses were the “Black Swan” events that thrusted the global economy into turmoil. Can you think of a scenario where a major bank goes under today? The economies in europe are deteriorating, but in a very methodical, almost organized, way.
For me, the downside to this market lies in the election results this November. I believe an Obama victory will equate to sharply lower prices in the near term, as the “he’s a fucking communist, Red Dawn crowd” scares America stupid into full liquidation mode.
So, in summary, until something changes, this market is likely to trade up–climbing the wall of worry without a safety harness. My bias is to be long value tech, coupled with silver and a little bit of joozy news plays, most readily discussed inside of the comfortable confines of The PPT aka my computer brain.