Jeffrey, nobody being worried is exactly the kind of sentiment needed for more selling. remember, the big declines in the nineties usually DID worry people. now they have been conditioned not to worry anymore. which is exactly why one should be worried. this is not to say you won't have time til Friday to enter into your puts. i really don't know that. all i know is that IF this is more than a garden variety decline, it will confound as many people's expectations as possible...
one more thing about the Kernen and Joey comment about big one-day declines occurring exclusively during bull markets: while i do believe we most likely haven't seen THE top yet, this statement doesn't really stand up to scrutiny. the reason being, that apart from the fact that the worst bear of them all (29-32) has to be excluded from this observation, this particular bull has suspended historic norms on the upside with nary a problem (you know, the p/e's, price/book, reaction to rising rates, even breaking of technical supports at times). so it is not reasonable to cite history when it suits the bullish view but call for a new era when it doesn't. that's plain and simple intellectually dishonest. on the contrary, a market that continues to surprise in terms of the upside can be expected at times to surprise to the downside as well...
in any case, whether the bull market lives a mite longer or not, in the medium to longer term, this kind of conviction and complacency is not a healthy sign.
hb |
