The market obviously feels supremely bullish. Many stocks are moving 10% or more per day. Small cap and speculative issues are moving 30% a week. Again, obviously this makes the vast majority of market participants ecstatic.
This suggests a few things to me. First, we know the market’s sentiment is skewing bullishly. Readings are at or near extremes. Second, because there are no sellers and no shorters, the market is wildly off balance. The natural checks and balances of supply and demand are not working because there seems to be no supply. But how can that be?
We know there have been tremendous liquidations in the two crashes and everyone who had to sell did so. But there seems to just be trading-oriented buying. Don’t they sell? and isn’t any and all positive news built into most stocks as most have returned to pre-crash levels?
We’ve been getting paid to be believers. We should believe in the capital markets, the economy and the government. We should believe that everything is back to normal and its off to the races.
Which brings me back to balance. There is none. The market is wildly skewed to the point of extremes. I want to say that any student of the market would be very uncomfortable with the relentlessness of it and the huge stock volatility. It feels good but it feels very, very dangerous as well.
There will be plenty who tell me to get a life and go with the flow. Respect the trend and listen to what the market is telling me. I’m listening and I’m beginning to hear the rambling of a complete lunatic.
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Scott….Did you notice Asia last night? Down Again. More Important, Shanghai Futures had Copper close down. UK GDP weaker. FX Gossip per Gerry over at FX Live is that China was the seller of AUD/USD. So the machines are in rally mode without a Strong China…..errrr we kinda of seen what has happened before, but maybe this time it will be different?
Scott, its not very nice to point me out as a lunatic at the end of your post
Scott – OK. That makes two of us. Are there any other bears out there that were bullish last March?
You make great points. I feel like I’m the only one not having fun at the party. But hey, I felt the same way at the bottom in March 2009 – I was early then also. We’re getting close to my circuit breaker level where I close out some positions. I really think I would have done it earlier if I didn’t believe that when the correction arrives, it will come very quickly and without warning. I guess trading through the 1987 crash changed the way I think about positioning. Everyone thinks they can get in or get out whenever they want. That’s not always the case at big market turns. Sh*t happens and you’re stuck in your positions.
I was very bullish at the March bottom. It was painful but worked. I’ve sold EVERY STOCK that I bought and they have all risen far higher. But now the balance ain’t right…Be careful!
I was bearish until mid way through yesterday when I caught a bad whiff of bullishness and closed out. My new plan is to just hold my positions and finance against them if I need to buy a big correction. Right now, the majority of my holdings are high quality with big dividends, so I’ll take the risk of getting stuck in a crowd.
I was in big at the March lows. At the time I thought we were experiencing a downside mania, a panic. I went long into the mania.
I feel the same way now, a mania. Manipulated or not, I can’t say. But I do sense a bit of artifice watch stocks climb like this.
I am in cash, and have grown bored.
My new game plan is to throw cocaine at my trader/servant, while buying stocks at random
LeFly with PNRA and BWLD hitting ALL time highs going into earnings I think many are already doing that game plan.