This is a bear market, but we haven't had a sustained rally in ages and this is one that has maintained more than a 2 week lifespan and will go further than many expect. I don't expect the market to fall apart till March or April. The bulls will keep the turds floating in the air for a while before they hit the fan again. Expecting a boring trading range from 850 to 950 for the next several weeks. Goldman earnings will be one less "bullet" out of the way, not that bad news matters anymore. This market has proven once and for all that news doesn't matter, it is all market psychology and price levels and technicals, the fundamentals don't matter.
Actually I don't think markets "ignore" news.. The news is duly noted for use later.. Like DOW last year over 13k.. Most traders here knew it wasn't sustainable.. Then the drop that came was unbelievable... Same play now.,, Your 950 very likely before year end.
Deflationary pressures will put a "heavy" hand on the markets. I doubt, IMHO, that we are going to see a Huge Bear Rally. In fact, 09 could see more selling pushing the INDU below 7000. Rates cut to zero will signal more panic. Fed is out of bullets. We should get a serious deflationary 3 or 4 quarters before Inflation picks up. No way out guys, Depression probably not but serious deflation that may feel like a Short Run Depression, 99%.
Rate cuts are meant to stimulate economic activity and increased lending from the monetary base. The bullets haven't started. Printing money for infrastructure projects to start now is heavy artillery. I'm tired of hearing how quant easing didn't work in Japan. They just didn't do enough (nor print enough)... Quanitity matters.
Not sure why the title of this is "Don't fight the Bull" it should be "Don't fight the Bear". Until the market breaks the 50 day moving average (902 on SP 500) and not just above it - clean large rally over it, then I'll agree with your assesment. Until then it's "Don't fight the Bear". I hope for the state of the economy, certainty etc you're correct, but price action is stating otherwise. The easier trade is selling rallies right now. But once we clearly break the 50, I'm with you, just not convinced yet...
The bottom can't be in yet. I just got an e-mail from motley fool telling me it's time to buy! buy! buy!
Sounds far too simplistic given the kind of market volatility that we have seen as of late. For example, we had a double-bottom last week around the 815/818 area and in TWO DAYS rallied 100 SPX points! If you get caught "short" in the middle of that Friday/Monday rally you get crushed . . . no matter how far away ( and under ) the 50 day MA the S&P is.
It definitely is simplistic - but does the subject for this thread "Don't fight the bull, market going higher" lend itself to the overly simplistic advice as well?!?!? I have no clue where the markets are going but given the price action and failure to rally over the 50 day MA, I would rather be short, that's all I'm saying. Especially since we're at the top of a falling channel. It breaks on the upside, I'm bid no lid, until then get shorty.
This is just like 2000-2 bear market all over again. A big selloff for no good reason. The recovery will be v shapped like it has always been in the past and the money guys and smarties are loading up now in anticipation of many years of sustained economic growth. PE ratios are at historic lows. There is so much value in the market, especially in large cap tech.