On Tuesday, just on cue, Marc Faber is interviewed on CNBC. As usual, Dr. Doom did not disappoint calling for a correction in almost everything and bluntly stating how overpriced almost every asset class had become. I cynically noted in my financial diary that it didn't take him long to show up after a hundred plus point drop in the DJIA.
Then on Wednesday, I was greeted by the following headlines on Marketwatch:
"Rotten Rotation" may signal bulls are on borrowed time by William Watts.
If ever the stock market flashed a 'sell' signal it's now by Michael Sincere.
Another sign the bull market is nearing its end by Mark Hulbert.
I concluded there must be a beauty contest for calling a market top. This does not mean that the market has not put in a top, but from a contrarian point of view it is not a good sign.
But to the rescue that a top may have been put in came Barry Ritholtz who denigrated the above market mavens as hacks. This pro, a regular denier of market tops, has a convincing argument that you aren't mentally equipped to deal with market corrections. I liked the cognitive dissonance reason about how once you convince yourself that a correction was about to occur, you went out and found facts to support it in spite of all evidence to the contrary. That's right folks, your perception of reality is skewed.
Be that as it may, maybe the right question is what will propel the markets to new highs. These reasons do not have to be rational, but they should be convincing to the market, and just because you can't think of any doesn't mean the market won't go higher. Keep in mind a market top is marked by euphoria and excessive valuations except when everyone is watching for them.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.