THE MARKETS WERE BEGGING TO RUN, NOW WHAT?
If any of your senses were active, this rally shouldn't have come as a surprise at all. Come on...do I need to list all the factors begging for a move up?
- Tech leading the rally...and not pulling back with the S&P, Dow. Bullish.
- Commodities, which have been correlated to the equity markets, consolidating their gains in a orderly, disciplined fashion. Thereby telling anyone who bothers listening that the inflation or die trade is catching its breath. Bullish.
- An abundance of professional traders putting all their eggs in the "market sentiment is too bullish" basket. Yes, it is...but it isn't gonna turn around on your clock. It's gonna do a lot of shaking and wiggling first. Pretty standard...and pretty bullish.
- Doug Kass being bearish. He's very good...but in all the time I've followed him...he is ALWAYS early. Bullish.
- The sentiment indicators that we follow (I will update these tonight) are just starting to get into the portion of the danger zone where the markets have a tendency to wiggle and shake in order to dizzy the bears. The market rarely flips the switch without putting on a soap opera first. Bullish.
With that said...we are most definitely is soap opera mode. The market's are acting like they will go infinitely higher, when in reality, they are preparing to consolidate for a time once the January "I'm forced to allocate into stocks in order to keep my job" run comes to an end.
I know of very few market runs that have topped in January...following a bullish year previously. This one isn't going to be the anomalous traitor that most seem to thing it is.
