I'm not certain if the sell-off we experienced on Friday was the beginning of a multi-week or even multi-month bear raid on the markets. However, I am certain of the fact that they don't ring bells at major market tops.
There will be a growing voice in the months ahead, as we embark on a Federal Reserve that will be raising rates for the first time in forever, that the markets cannot properly contend with a tightening stance. That the bull is an old, decrepit, worn out shell of its former self that can't lift itself off the ground with Janet Yellen's foot firmly implanted on its genital region.
Not only does that opinion lack historical relevance when compared against other periods of tightening, where the market has gone onto much greater heights throughout the tightening cycle. But it buys into the fact that market tops are announced in bright lights and booming voices.
In fact, major market tops are announced in quite the opposite fashion. It is the lack of chatter you see opposing the view that the indices are moving infinitely higher that accompanies major market tops. It is an abundance of news justifying the group mentality that sees endless prosperity ahead. It is a lack of tangible bearish information that short-sellers or general pessimists can hang their hat on as a reason to remain gloomy.
The prospects of a series of rate hikes moving forward gives bears everything they want from which to hang their raggedy hats. Eventually others will join that are not quite in the bearish camp, but are persuaded by seemingly logical misinformation.
That very prospect of quickly rising bearish sentiment that has a seemingly fundamental basis for its pessimism is exactly why we won't see a major market top on Fed news.
When the day comes that this secular bull ends, it will be marked with absolute conviction that the markets will remain solid indefinitely without one shred of fundamental evidence to dissuade the faithful. This isn't that.
