“Though it’s already a few weeks into winter, Wall Street bears may be finally ready to hibernate, though no doubt against their will.
A powerful rally in which virtually all fears have been bypassed has pushed stock marketdetractors to the brink, ready to wave the proverbial white flag as the only direction for the market seems to be up, up, up.
“They’re almost ready to throw in the towel,” Scott Bauer, of Trading Advantage, told CNBC. “I don’t want to say ‘capitulation,’ (but) guys down here really are saying, ‘All right, I can’t fight it anymore, let’s go.'”
The term “capitulation” refers to the point when sentiment has gone so far in one direction that a turnaround, be it higher or lower, is a certainty. (Read More: S&P 1,500: The Last Barrier Before a New Record?)
One of the most respected maxims on trading floors is that bull markets end on good news and bear markets on bad news. In simpler terms, that somewhat counterintuitive observation means a run higher stops when the market no longer reacts positively to good news, while a run lower halts when the market no longer falls on bad news.
Lately, the news has been mostly good, if only marginally so.
The worst of the fiscal battles in Washington have abated for the moment, and companies have managed to beat sharply lowered earnings expectations. The European debt crisis is on the back burner, and geopolitical tensions, particularly in the Middle East, have quieted….”
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