Still a bear? After a breakout? Or better yet, calling it a breakout means I've capitulated to the rally.
Tricky call. More likely it is another short-term event that we have to take one at a time.
Remember when the market broke 875? It went up but not by much. May was essentially flat after the initial rally.
And now it breaks the next range at 930. I can see another 4-7% rally (to 982 - 1007) but I just cannot see this as a bull market that will last. Take two clunkers out of the Dow and of course everyone is happy. They will put in two stocks that have a chance to make some gains.
So, we take it range at a time. I'll keep my bearish opinion while I play the long side. It is the difference between what you think - and everyone is free to think whatever they want - and what you do. Your bank account does not care what you think.
4 comments:
Hi Michael,
Thanks for your response.
Spirits have been fairly giddy and nowhere more so than in the press.
I thought your readers might like this:
"Economists were especially heartened by a report from the Institute for Supply Management that showed U.S. manufacturing activity shrinking at a slower pace in May. Reports from Asia and Europe indicated similar improvements in their manufacturing sectors.
The institute's index came in at 42.8 — its highest since September and up from 40.1 in April. A reading below 50 still indicates activity contracted, but the figure surpassed economists' forecasts."
Hooray! Things aren't going to hell quite as fast so recovery is just around the corner.
Paul O'Cuana
just wondered whether the poll you took should have been read as we read scientific polls! The least percentage vote went to the 'already corrected' category, and in scientific polls, that has the highest chance of success.
I believe the higher we go, the higher the chance to correct, but also, higher the chance that the correction won't reach way down to the 700s. It truly seems the economy is healing. Manufacturing indexes, though in bear territory are improving. GM is getting sorted out (removal of uncertainty). XLK and XLY are racing ahead with high volume - the latter has done it twice in two weeks. Consumer confidence is improving...
What happened to summer doldrums?
Paul,
I am no economist and I do not play one on TV..
But it seems to me that another recessionary bout is still headed our way. Yes, GM lifted uncertainty. I am not so sure about the XLK/XLY thing and I have been writing about it in the newsletter.
But you nailed it. We are not failing as badly.
Amalan,
Just thinking about that poll this morning.
Also, should have had more coffee - I answered your comments in my previous comment instead of this one.
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