One always has to remember the capitulation that should occur before a major reversal, however when you are up 23/25 days (not exact, but that's how it feels) and 7 out of the last 7, I'd say that's enough for me to think the permabears have exited their short positions.
Today on CNBC I actually started to hear comments such as the market is in need of a pullback, and the market is ready to go lower, etc., etc. We should all know by now that CNBC is the biggest permabull piece of garbage television out there and even a few of them are turning bearish?
I also subscribe to several newsletters and I cannot recall any being bullish in the intermediate term.
Lastly you have articles like this:
http://www.thestreet.com/story/10590765/1/kass-market-has-likely-topped.html
It appears everyone is expecting a pullback, it is just a matter of when. I'm sure when the volume from Hedge Funds gets back from summer vacation in September that none will be looking to go long at such extended highs, however I'd like to hope we pullback before then. We went from having abnormal days that went up and down 5-6%, to now having abnormal days that go up and down <.5% a day. (......zzzzzzzzzzzzz)
Lastly, I leave you with a chart showing the magnitude of rallies since the great depression. What it does is take the entire % movement of a rally or crash and give the percentage annualized. I figure this is a good measure to test how fast and how far we actually have come up. Amazingly we are around 200% annualized in the S&P right now, the 1932 GREAT DEPRESSION rally didn't even top 160%.
1 comments:
Like I said last week, I think the market would go up for another week or so before beginning retracement. I think it is finally starting - we have repeatedly seen the bulls unable to take the market away from the bears.
In anticipation, I have bought put for the QQQQ. This serves as a good hedge for my other QQQQ trade that I bought a few days ago.
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