Where Bull Markets Are Born

While the market is clearly overbought at these levels with our fourth consecutive up day, its funny how data like Thursday's sales reports from retail companies can push us further into overbought levels. Retail sales swept all analyst estimates. Shorts are really clobbered and this really shows the dangers of anticipating (shorting) without a proper technical setup (I'm guilty as charged). Of course if you are right you can get better prices but if you are wrong...

While I don't want to be too bullish, this type of situation is precisely where bull markets are born. Plenty of skeptics and liquidity in the sidelines, and the pressure on bears to give in pushes an overbought market into further overbought levels. Corrections are minor as those who are left behind decide to buy on the dips, until eventually the recovery comes out true as advertised. Still, being traders and not buy and hold investors, we have to be aware that these are just swings and corrections are on the horizon. Enjoy the swing and make the most out of it.

Comments

[JAMES CARLINI:]

People are BULLS at spending when they have solid jobs. They are BEARS if they do not know how stable their job is.

People are still getting laid off in different segments.

I don't see any of my friends rushing out to buy a new car but do know a few that have put in some major repairs ($1000 - $3,000) to keep the cars that they have.

BULL behavior - buy a new car - make the payments.
BEAR behavior - make do with what you have - only spend money if you have to.

Both will spend money, both will add something to the economy but I do NOT see BULL behavior when it comes to big ticket items.

People are getting used to so many super-sales that no one is ever thinking of paying list again.

Oct 09 08:24 AM

[Albertarocks:]

Guilty as charged? You're not alone Terence.

But how can you or I be blamed for anticipating when we see a day like today (Oct. 9) when the market was up but on so little volume that the trading day could have all been done in the first hour and then everybody on the floor gets an extra long weekend. I mean, the volume has been declining since late March and is so thin now that today's numbers are shocking. What that shows me is that when GS isn't buying, there basically are no purchases. And a market can't keep going up after 7 months on fumes if the big cheaters who've pumped it up this far are done. I think they're done!

When the world recognizes what happened (or didn't happen) today... Monday could be a hellish scenario. In fact, I'm calling for a very, very red day on Monday.

Have a great weekend.

Oct 09 06:13 PM

[untrusting ...:]

What should happen and what is happening are two totally different things. When you get the dollar finally rising for a day or two, and they still are able to manipulate the market higher, then who knows how much higher they can keep pushing the market up. Maybe Jim Rogers is right and the S&P will go to 3+K or higher and they will let the dollar go to virtually zero. Just think with a dollar worth effectively zeo, it won't matter if the US government owes $11 trillion or $999 trillion.

The real question is will the IRS let us pay our taxes in US of Weimer Republic dollars? Think we should all contact our politicans and ask if we can do that.


On Oct 09 06:13 PM Albertarocks wrote:

> Guilty as charged? You're not alone Terence.
>
> But how can you or I be blamed for anticipating when we see a day
> like today (Oct. 9) when the market was up but on so little volume
> that the trading day could have all been done in the first hour and
> then everybody on the floor gets an extra long weekend. I mean, the
> volume has been declining since late March and is so thin now that
> today's numbers are shocking. What that shows me is that when GS
> isn't buying, there basically are no purchases. And a market can't
> keep going up after 7 months on fumes if the big cheaters who've
> pumped it up this far are done. I think they're done!
>
> When the world recognizes what happened (or didn't happen) today...
> Monday could be a hellish scenario. In fact, I'm calling for a very,
> very red day on Monday.
>
> Have a great weekend.

Oct 10 02:52 AM