View: The Slippery Slope Investment and Chuckle Forum

Until it turns down.... it's still in a bull market as they say. Although, setup is soooo enticing for bears like myself. 12/9/13

I agree with you that the facts behind the analog don't match. However...consider the arguments recently put forth by both Hussman and Hendry. They argue that we could see a blow-off surge because the normal cause and effect dynamic of the market is broken. Fundamentals and macro inputs don't matter in a market driven solely by liquidity and TINA. So what does matter is the signals indicating the liquidity could be ending or alternatively that it will continue for some time. 
 
So consider Friday's NFP and PCE deflator reports. The NFP report initially caused the bond market to sell of based on an expectation that liquidity will be curtailed somewhat, perhaps as early as December. Then the weak PCE deflator caused the bond market to rally because it gave the Fed an excuse to continue with QE. Bonds rally, equities rally. 
 
So if the Fed is looking for excuses to continue QE because what they really want to do is break the Chinese cycle on neo-mercantilism then they will inevitably find an ample supply of economic data which gives them the excuse they are looking for. QE continues, incremental Chinese over-capacity continues, deflationary pressures continue, the excuse for more QE continues, wash rinse , repeat. 
 
So th t in essence becomes the model for the analog to work. Not nearly as compelling as the age of mass production (the 1920's) or the age of the internet (1990's) but perhaps compelling enough to keep the market detached from fundamentals for a while longer. 12/9/13

white flag time. there is so much gloom and doom and trillions of cash on the sidelines. what happens if they taper and the equities don't correct? i notice the bears are now saying they have their hands in their pockets....just follow the price action. don't pick tops or bottoms....it can be expensve. fyi, i have no idea where the mkt is going. 12/9/13