There is no precedent for the current market, writes The Fat Pitch. Consider: 1) The S&P...


There is no precedent for the current market, writes The Fat Pitch. Consider: 1) The S&P (SPY) has been up 56 of 88 trading sessions this year 2) It's up an uncorrected 24% since the post-election low - the longest streak in over 3 decades 3) The Nasdaq (QQQ) is on pace for a 7th straight up month, an occurrence with a 3-in-100 probability. Long term it's bullish, writes Ukarlewitz, as this sort of strength is rarely the end of a trend. Short term? Stay nimble.

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Comments (53)
  • TomasViewPoint
    , contributor
    Comments (4911) | Send Message
     
    Where else can money go? And the hype is getting peoples' attention and they want to participate. A lot of them are still on the sidelines so it could get really frothy.

     

    Underlying the market is earnings. However the growth in earnings must keep going and it has to come from more than just cost cutting and laying off employees. Since our economy is barely growing top line growth is hard unless a company sells internationally into faster growing markets. Hence the investments overseas which does not help UE here.

     

    Companies that sell globally are disconnected to a degree from the US economy.
    19 May 2013, 10:06 AM Reply Like
  • june1234
    , contributor
    Comments (4341) | Send Message
     
    Huge buybacks spread those earnings to a shrinking share base. GS's Blankfein said to think of it as corporations social contract with America
    19 May 2013, 12:35 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3130) | Send Message
     
    Junk bonds - http://reut.rs/11PT4K4
    19 May 2013, 07:33 PM Reply Like
  • Teutonic Knight
    , contributor
    Comments (3412) | Send Message
     
    For every share of stock bought, there was a seller. For the bulls, there are also the bears lurking in the shadows betting against.

     

    I call it 'Equal Opportunity'.
    19 May 2013, 10:10 AM Reply Like
  • Joe2922
    , contributor
    Comments (477) | Send Message
     
    Market has begun to go parabolic, may rise a lot more, but odds favor a decline short term. Longer term, this is where we are in the Bull / Bear Cycle: http://bit.ly/WpVqYk
    19 May 2013, 10:55 AM Reply Like
  • marketwatcher23
    , contributor
    Comments (2180) | Send Message
     
    "Where else can money go?"

     

    Tomasviewpoint is 100% correct. This is not about bull/bear or recession or economic growth anymore. A whole bunch of factors have put a tsunami of capital in motion and right now they are heading into stocks. This market could go way higher from here. That does not mean that money could ultimately decide to go somewhere else at some point. If it does it's going to be amazing to watch.
    19 May 2013, 10:21 AM Reply Like
  • midsnell
    , contributor
    Comments (5) | Send Message
     
    up==up and wawy but one must be in the right sectors and certain stocks or u can be killed like the gold/silver crowd recently--rjm
    19 May 2013, 10:40 AM Reply Like
  • marketwatcher23
    , contributor
    Comments (2180) | Send Message
     
    Or you could be taking paper gains in stocks and buying beat down PM's....oh wait no one does that.
    19 May 2013, 10:42 AM Reply Like
  • The Long Tail of Finance
    , contributor
    Comments (1687) | Send Message
     
    >>"Where else can money go?"

     

    Time to drink the Kool-Aid, my friends.
    19 May 2013, 10:43 AM Reply Like
  • marketwatcher23
    , contributor
    Comments (2180) | Send Message
     
    I agree long tail. That phrase will sucker in the last of the suckers. Once they decide they want out and realize everyone else locked the doors on their way out it will get interesting.
    19 May 2013, 10:48 AM Reply Like
  • Teutonic Knight
    , contributor
    Comments (3412) | Send Message
     
    Look under an X-ray stereoscope, with so much money in ETF's these days, tons of stop-loss triggers are in place as landmines like no tomorrow. Good luck!
    19 May 2013, 10:57 AM Reply Like
  • justaminute
    , contributor
    Comments (1552) | Send Message
     
    It's different this time.
    19 May 2013, 12:38 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4911) | Send Message
     
    I didn't write that phrase as a rationale for the market but to show how dysfunctional the marketplace has become. In a normal economy all investments should have some merit based on risk and return, etc. That is not what is happening.
    6 Jun 2013, 03:28 PM Reply Like
  • bbro
    , contributor
    Comments (11216) | Send Message
     
    "SPX has now gained an uncorrected 24% since its November low. This is the longest comparable streak in more than 30 years."

     

    Can somebody check that statistic?? 1995 went the whole year without a 5%
    correction....
    19 May 2013, 11:16 AM Reply Like
  • bbro
    , contributor
    Comments (11216) | Send Message
     
    I think I get... what he is saying it is up 24% in 183 calendar days which is the fastest pace uncorrected in more than 30 years....
    19 May 2013, 11:30 AM Reply Like
  • Clayton Rulli
    , contributor
    Comments (3405) | Send Message
     
    what do you mean uncorrected? the end of April saw a couple scary days
    19 May 2013, 11:19 AM Reply Like
  • investingInvestor
    , contributor
    Comments (2459) | Send Message
     
    Whoah!!! This is crazy talk!! This is the kind of thinking I observed with all the previous bubbles!

     

    New normal, the Internet changes everything, real estate will just keep going up, S&L banking is booming, Lehman's needs more leverage, Bernie guarantees 12% per year, Enron's new model is revolutionizing energy distribution and sales.

     

    Naive SA readers: if it sounds too good, you are being lied to. Hold onto your money. In fact, keep a safe cash position throughout 2013 until the inevitable pullbacks. Do not get completely out. Do nothing rash.

     

    Wall Street is banking on the churn.
    19 May 2013, 11:24 AM Reply Like
  • wyostocks
    , contributor
    Comments (9113) | Send Message
     
    investinginvestor
    Finally a voice of reason crying in the wilderness.
    19 May 2013, 11:32 AM Reply Like
  • chopchop0
    , contributor
    Comments (5155) | Send Message
     
    A-friggin-men
    19 May 2013, 01:20 PM Reply Like
  • Ben Bernankes friend
    , contributor
    Comments (475) | Send Message
     
    investingInvesto

     

    I am guessing you missed the rally and were caught sitting in PM's.....
    20 May 2013, 06:30 AM Reply Like
  • chopchop0
    , contributor
    Comments (5155) | Send Message
     
    I doubt he missed the rally completely:

     

    " Do not get completely out."
    20 May 2013, 12:39 PM Reply Like
  • wheelz23
    , contributor
    Comments (66) | Send Message
     
    "all this money on the sidelines" = banksters marketing phrase
    19 May 2013, 11:31 AM Reply Like
  • justaminute
    , contributor
    Comments (1552) | Send Message
     
    And all the leverage being used.
    19 May 2013, 12:35 PM Reply Like
  • allstar0088
    , contributor
    Comments (408) | Send Message
     
    With Japan, Poland, New Zealand, and South Korea loosening monetary policy in similar fashion to the United States, cash is flooding the US equities market because its less crappy than the rest of the recession-addled global economy. Of course its all just manipulation by central banks. But one truism still remains: don't fight the Fed(s).
    19 May 2013, 11:35 AM Reply Like
  • amscott8
    , contributor
    Comments (31) | Send Message
     
    Does everyone have amnesia? All same stuff was said and written about in 2008. And as for QE, Keynesian's have been running the roost for many years. The Feds eased in some form or another aggressively during that time. Japan has pursued loose monetary policy for over 20 years as well. Its just a matter of when Wall Street wants a reset. Its that simple. And when comes the pundits will say the signs were there and should have been heeded.
    19 May 2013, 11:45 AM Reply Like
  • Patent News
    , contributor
    Comments (1474) | Send Message
     
    the odds favor a decline? whose odds?

     

    hedge funds are starting to go all in.
    19 May 2013, 12:36 PM Reply Like
  • bjamesh
    , contributor
    Comments (275) | Send Message
     
    The current trend was preceded by a sell off after the US election followed by uncertainty over the "fiscal cliff". Both probably overdone. So with previous sellers buying back in, plus money printing and interest rates being reduced internationally it's not surprising the "perfect storm" occurred for US stocks; especially perceived defensive sectors. Some rotation into cyclical stocks may occur, but I don't think that will go far as average global growth is anemic.

     

    Neutral to underweight for stock allocations and collect dividends and interest income for the time being seems to be the most prudent approach now. Great time to research some companies and place on a watch list. Even the dreaded tapering of QE may become a non-event as buying the dips may insue. Or not.
    19 May 2013, 01:04 PM Reply Like
  • investingInvestor
    , contributor
    Comments (2459) | Send Message
     
    bjamesh,

     

    "Great time to research some companies and place on a watch list."

     

    Wise words, and I hope SA readers listen to you.
    19 May 2013, 02:10 PM Reply Like
  • bjamesh
    , contributor
    Comments (275) | Send Message
     
    With $380 billion in margin debt on Wall Street as of March, I would think that's not happening.
    19 May 2013, 07:49 PM Reply Like
  • evan.prospect
    , contributor
    Comments (704) | Send Message
     
    There has also been no precedent for QE I-IV and the Fed's balance sheet at about $3.25 trillion!
    19 May 2013, 01:33 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4291) | Send Message
     
    The market is on a permanent high trajectory that cannot be stopped. By this time next year, Main St. will be back in full mode and unemployment will hover at 4%. The central banks have finally gotten it right and realized that you really can print your way to prosperity.
    19 May 2013, 02:58 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3121) | Send Message
     
    There is a sucker born every minute, and the supply of fools is indeed a relevant metric here. The fearful with retirement money looking for a return think that the U.S. and Japanese equity markets are the only game in town. Some are completely buying it; some are not, and have other plans. Active market traders take advantage of power law melt ups, just as much as they will power law meltdowns. CE
    19 May 2013, 03:41 PM Reply Like
  • jerrycalpha
    , contributor
    Comments (58) | Send Message
     
    Ah yes, Geo. The Fed has achieved a permanently high plateau for the Stock Market. Quite an achievement.
    19 May 2013, 04:09 PM Reply Like
  • Teutonic Knight
    , contributor
    Comments (3412) | Send Message
     
    Up there alright; but it would be difficult to climbing down if need be though, as it would be slippery and even treacherous otherwise.

     

    Hung high and dry!

     

    Like US troops moving in to Panama; it is far easier to move in, than to move out.
    19 May 2013, 04:11 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4291) | Send Message
     
    The last time this was achieved was around 1929, I believe.
    19 May 2013, 06:06 PM Reply Like
  • bbro
    , contributor
    Comments (11216) | Send Message
     
    Option probability.....before the end of the year a 72% chance of hitting
    1600 before the end of the year...72% chance of 1735.... 53% chance of 1550...and 50% chance of 1800....
    19 May 2013, 04:11 PM Reply Like
  • nightfly
    , contributor
    Comments (1015) | Send Message
     
    Lack of selling is probably due to a lack of buyers over the past month. However, I think that problem is being taken care of, and the hedgies and fund managers are now able to sell into some buying volume.
    19 May 2013, 04:41 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3121) | Send Message
     
    Massive dump in the silver futures market tonite: up to 8.7% lower ($20.25) near open, with some rebound. High margin contract; traders need to be careful out there in either direction. Gold is nowhere near this selloff (1-2%), so far. I have pegged $1200 gold based on technical downtrend; this may translate into $18-19 silver. CE/CV
    19 May 2013, 06:21 PM Reply Like
  • Dividend Monkey
    , contributor
    Comments (174) | Send Message
     
    1987
    19 May 2013, 07:22 PM Reply Like
  • NYShooter
    , contributor
    Comments (7) | Send Message
     
    I was short options (or long puts) going into the "big one" in '87. I caught the several tremors (1-200 points) leading up, but, got out before the big crash. IIRC, the catalyst, or trigger for the dump (the market was looking for a reason) was a particularly bad trade deficit number. (That was, of course, when things like that mattered)
    20 May 2013, 08:47 AM Reply Like
  • Dividend Monkey
    , contributor
    Comments (174) | Send Message
     
    that would have been one hell of a trade had you held on to it! I saw the trader documentary of PTJ (it pops in and out every now and then) and the man is a genius!

     

    I think the catalyst this time around could be unexpected (larger) interest rate hike. Long term I agree with the article, its very bullish.
    20 May 2013, 10:47 AM Reply Like
  • NYShooter
    , contributor
    Comments (7) | Send Message
     
    Yup, the old “fear vs. greed” thing. Psychology is a funny thing; I mean, I made a lot of money in those pre crash plunges, but because I missed out on the big one I purposely have never calculated how much I would have made had I stayed in. Why torture myself? I was a subscriber to Marty Zweig then and traded parallel to his advise. He sold into those dips too, but when the big one hit he still had 50% of his position. He was a real Pro; I guess that’s why he was able to buy the most expensive apartment in NYC……..Discipline!

     

    p.s. I agree with you on the interest rate hike. Now, if you could only tell me when………
    21 May 2013, 12:27 AM Reply Like
  • Herr Hansa
    , contributor
    Comments (3130) | Send Message
     
    A round of applause for Mr. Ben Bernanke. While other central banks tried to use various methods of re-capitalizing banks, or boosting capital levels, Mr. Bernanke instead created one profitable micro-bubble after another through quantitative easing programs. The plan is brilliant in that large international banks headquartered in the United States will be able to meet upcoming Basel III rules, simply by generating better profits.

     

    On the losing side of those bets, the hedge funds and private equity giants; willing participants in the capital building at the largest financial companies. We should applaud them too, while we can, because we may see several of them failing over the next five years.
    19 May 2013, 07:40 PM Reply Like
  • JeffreyLangBoyd
    , contributor
    Comments (663) | Send Message
     
    How are the hedge funds and private equity giants losers?

     

    The biggest losers I see are those with money invested conservatively. Obviously, they aren't the only losers but they are likely the largest.
    19 May 2013, 10:55 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3130) | Send Message
     
    Not "How are", but how will some hedge funds lose?
    19 May 2013, 11:06 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1571) | Send Message
     
    The market has not been up an uncorrected 24%, there were several small corrections on the way. Regarding the 3 in a 100 possibility, anyone that knows about math will tell you this is not something for which you can meaningfully calculate a probability. So this number is complete bs.

     

    Furthermore, when people complain about the unprecedented market increases, they should remember that we are coming from the lost decade. A whole decade that saw no growth in the markets even though the population and the production of the US was growing as was inflation.
    19 May 2013, 07:41 PM Reply Like
  • Robert Myers
    , contributor
    Comments (207) | Send Message
     
    Anyone reading here probably knows the situation. I could only add emphasis. One read on the gold market is that it is currently being driven by investors (of what kind I do not know) exiting physical gold ETF's, which have to sell gold at no matter the price. The same can happen to stocks. My fear is that the same kind of investors (easily frightened) that were in gold are now in stocks through ETF's. Too much hot money in the market, but there is nowhere else to go. Maybe someone knows of a way to identify stocks that hot money doesn't like. Hot money has been chasing the value stocks. What's left? Indexing was a great idea, until everyone caught on. Hot money clearly doesn't like gold right now. Anything else?
    19 May 2013, 07:48 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3130) | Send Message
     
    Raw materials, especially iron ore. Those were run up under QE1. Also, some emerging markets are not seeing this sort of upside.
    19 May 2013, 07:52 PM Reply Like
  • geobam3
    , contributor
    Comments (11) | Send Message
     
    With little to zero Main St participation it is easy for Bernanke and his Banksters to manipulate this market. $1-5bil everyday tossed into futures lifts stocks. Bernanke wants to prove his Ph.D. is right and is sacrificing our kid's future in doing it.
    19 May 2013, 07:48 PM Reply Like
  • Patent News
    , contributor
    Comments (1474) | Send Message
     
    hehehe a good sign there's more to this run!!

     

    shorts generally crushed.
    19 May 2013, 10:41 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (11164) | Send Message
     
    If you don't own puts in the (SPY) then you are playing a dangerous game being only long...

     

    VERY dangerous.
    22 May 2013, 09:15 AM Reply Like
  • chopchop0
    , contributor
    Comments (5155) | Send Message
     
    Just like the shorts and bears that have been slaughtered by not owning calls....
    22 May 2013, 09:28 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (11164) | Send Message
     
    You can't be slaughtered if you aren't in the game.

     

    You can miss opportunity but slaughter refers to losing capital.
    14 Jun 2013, 02:25 PM Reply Like
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