I stared at the ceiling early this morning wondering, "what am I going to write about?" (such are the torments of a compulsive blogger) The market isn't that terribly interesting right now, and writing about the doldrums isn't exactly captivating.
After some consideration, I have this notion to offer: those who believe that the bear market is still very much intact and will resume later this year (and – surprise! – I am among them) seem to fall into two general camps:
- Those who believe that the lusty rally we saw from March 6 to June 11 is pretty much all the bulls have to offer, and we've started to fall again; and
- Those who believe we might ease back from here, but at some point before long the bulls are going to take us another for another, final vault higher
It's difficult for me to say which of those I would subscribe to; recent activity has been so mushy and messy that it's tough to reach even a speculative conclusion. I will say that, paradoxically, another big push higher would actually be ultimately better for the bears, since the subsequent fall would be more dramatic and, timed properly, much more profitable.
But given everything the US Government has done to aid the bulls so far, what other reasons could the market find to go higher? I can dream up a few:
- Q2 earnings which aren't as bad as feared – – and even some healthy surprises here and there. Having a series of positive earnings surprises in the late-July earnings season would give people plenty of reasons to buy;
- A simmering-down of world political tensions, such as North Korea, Afghanistan, and Iraq;
- Easing of interest rates (coincident, of course, with a strengthening of government paper)
Any or all of these circumstances would get the S&P to just above 1,000 or – – – and this is truly as high as I could envision it going – – – to about 1125.
For bears, having an S&P back in the quadruple digits would present an absolute feast of an opportunity.
All this speculation aside, I currently remain very short the market, although with some trepidation. I went through my "Wrecks" watch list (from which I draw my lottery plays), and I was kind of surprised to find a few dozen pretty intriguing setups. It's discomfiting for me to see that the potential "leadership" for a rally remains with the junky stocks I follow, because I find scant choices in the world of, shall we say, real stocks.
And thus ends my all-text post. Chart-happy though I may be, I have no diagram to offer that I find worth showing you. So I'll simply bid you a productive and peaceful Saturday.