I know exactly what the bulls are thinking. It's all in this graph:
The narrative is simple: they see the /ES pushing above that horizontal line and flying up to 1250. It's on page 3 of any technical analysis book you can find. The inverted head and shoulders. Simple. Obvious.
But, as I've mentioned, I think the bulls are going to experience the full-on disappointment that the bears felt in early February………..and early July…………and early September……..when the market looked like it was going to (finally) plunge but, instead, made an obscene gesture, shouted something horrible, and bounced the opposite direction.
Since the market is such a cruel mistress, it'll probably get above that line, cause all the bulls to fan themselves with excitement, and then make the aforementioned gesture/shout/bounce. That'll make sure the bulls are furious and the bears will be too petrified to do anything about it.
The ways the bulls have been talking, you'd think that the market had been up the past 2,000 sessions in a row (although it sure feels like it). The frantically-bullish sentiment confirms this. The cold fact of the matter is that the Dow is about 4,000 points under its high and – – – here's the important part – – – in spite of our government whoring itself out in every way imaginable, the market has been flailing around at the 50% retracement level for about a year now.
Again, one picture says it all:
I think the odds of the S&P soaring to 1250 are about as good as the S&P collapsing into the fabled land of "wave 3 of 3 of 3 of 3 of 3". It's too obvious. It's too simple. And it's not going to happen.