I think we can not go against the trend despite the apparent fallacy of the bull market.
I have been reading and listening a lot of reasons for the market to crash since Abril 2009. But the market does not listen to them. Then, I think them should listen to the market.
The fiscal tightening of China could be interpreted like something positive for the market, because it means that the economy is growing more than expected (!!!)
The systemic risk and the possibility of radical and political changes is something that were present in 2009 (and the market went UP UP UP).
Then, from the fundamentals, I think there is room for growth.
I was thinking the same thing. ( 1220 target)
ReplyDeleteI've been going around the blogs, and at least 80% say down.
Why are there so many people ruling out, the market going Higher?
I guess they don't know about this little tid bit of info I picked up from Thomson's.
SPY 500, 75% of the companies beat the street by 13%. You'd think that has to get added in to the next high.
April earnings is the one that's worrisome.
So MAY might be a disaster.
Good point! A lot of traders waiting the market crash. We know how this history ends 80% of the time. I was following this index:
ReplyDeletehttp://www.market-harmonics.com/free-charts/sentiment/investors_intelligence.htm
and this one:
http://stockcharts.com/h-sc/ui?s=$BPSPX&p=D&yr=1&mn=9&dy=0&id=p10085319995
Maxi,
ReplyDeleteMost of the bloggers don't go outside for shopping or anything. They probably just sit inside at their desk and ramble. They are always bearish. We need to ignore them, otherwise the portfolio will be down very much. They lack flexibility.
I look at the investor sentiment like the market harmonics site that you mentioned. But, that is not a measure. You can't call tops and bottoms based on that.
For example, look at the bull/ bear spread (or ratio) in Nov. 08. It hit a bottom, but that is not when the market hit a bottom.
You can probably use a trendline using that, (or a divergence). Right now in that spread, the trend is down = markets should go down. Till the trend reverses, the market may not go up.
Yes, the trend line is broken. But, we do not have a divergence between the bull-bear spread and the S&P (a new max in the SPY and not in the bull-bear spread). In the following link I compare both (the image is not so good but it is useful to the comparison). I want to add to your comment on the bottom of the bull-bear spread in Nov-08, the divergence between them in March/2009. We have a new low in the market but not in the bull-bear spread:
ReplyDeletehttp://i45.tinypic.com/dxftpu.jpg
But, like you say, is something that could affect the uptrend in the market.