JXM, no-one can really tell WHEN it will end. it is no less likely to end tomorrow than in say one or two years time.
i know your P&F indicators are saying we are not overbought enough yet. however, the 10-day TRIN (NYSE) just came off it's most overbought levels in 18 years, and the put/call ratio (CBOE total) just came off a RECORD low (both 1-day and 10-dma readings) and the Rydex ratio likewise just made a new record low of 0,08, meaning that 92% of all Rydex assets were in bull funds. so from my point of view, we have never been as overbought as we are now.
none of the indicators are infallible of course...it seems there's nothing on the horizon that could possibly derail this market (as Canelo of MWD recently put it: "what's not to like?").
however, there are forces greater than all of us, and our stock market-centric indicators probably don't capture those sufficiently. consider the current account deficit...it is at unprecedented levels and rising...likewise, dollar-denominated ST debt is at a record high, not to mention household and corporate debt.
if anything unforeseen should happen to shake foreign investor confidence, the whole house of cards will go to hell in a handbasket.
i agree of course that everybody acts according to what he sees, and it is probably a matter of sheer luck to time THE top. but the longer the boom continues, the shakier it's foundations are getting, as the imbalances mount and mount at ever increasing speed. so with every passing day, the arrival of d-day becomes more likely... |
