The real problem is not the levels of Euphoria, by any measure this market is ridiculously over valued and the profits most corporations are reporting are nothing but statistical lies. They are all due to the drop in the value of the US dollar. If one had to adjust those profits to take into account the drop in the value of the US dollar, all those lovely profits would disappear immediately. However despite all these lies, and distortions of the truth, the market still carries on rallying. What it really comes down is perceptions and unfortunately the majority of the world is like “Alice in Wonderland”, to them illusions are realities and reality appears to be an illusion.
The reality is that the markets should have crashed long ago and this so-called bull rally should never have ever occurred in the first place. But reality has never made anyone rich or wealthy. The illusion however seems to be winning because it is being driven by another very addictive factor. I call this “the greed factor” and as the market goes higher this greed keeps rising to insane levels. Eventually just like swine’s they will be merciless slaughtered. The average investor wants to cling onto the illusion that the huge crash from 2000-2003 was nothing but a buying opportunity, that all is well now and the bull has re emerged and is all charged to keep going on forever.
The only way to win in a market is to be unbiased, there is a time to a bull, there is a time to be a bear and sometimes one has to simply be neutral. If you firmly plant your feet in one camp, start looking for a wheelchair, as they most likely to get chopped of sooner than later. Currently the market appears to be in an extremely euphoric mode and I believe that a lot of this Euphoria is being slowly dampened by the recent correction. This up down movement will continue for a while and it appears that this summer has the makings of being a very cruel time for all traders. I believe we are in for one more explosive up thrust after which the bear will viciously bite and destroy all the bulls out there. In the end the only one left standing will the man who has no bias.
And if you have made a fortune being a bear or bull, make sure you take time to donate some of that money to a worthy cause. Since you actually took that money from someone else and your fortunes are now many people’s misfortunes.