I also (like the quotation) perceive sentiment as very bullish. Then, the latest low has not been marked by a sell-off. According to my economic model the economic setup should first get worse with effects that are not yet in the news. Well, everything else is bullish.
<<<yes, bad news were ignored, buy signals given, etc.
problem is, everybody knows it, and everybody expects the same, namely a big rally. this is not to say we might not get one...it's certainly possible. see however my post about sentiment and potential indicator failures for a lone opposing view. this would be the first blast-off in history with II bulls at a new 52 week high and Rydex ratios at a screaming sell signal. but of course it has to be considered that the Fed is printing like crazy...possibly too much to fight against. maybe the leveraging up process can be renewed, the margin debt bubble re-expand, etc.
i was anyway looking for a rally to commence at the end of Jan., and a pretty strong one at that. NOT if we rise into late Jan. - then the cycle would invert.
a big clue will be tomorrow's commitments of traders report. if the commercial net short persists at a very high level, the rally will soon be doomed again. it has generally paid to follow the comms. during the entire denouement. if they switch to net long, better switch with them.>>> |
