re: maybe a final exhaustion spurt into early Jan?
I think it may last longer than that. This vigorous "New Bull", (the SOX 50% above it's lows), is largely constructed out of Fed liquidity. The model here, is what happened in Y2K. The Fed pumped money in, the loose money sloshed around, and ended up in tech stocks and housing. But the Nas didn't peak in January 2000, although (as I recall) the Fed shut down the liquidity spigot right after the 1/1/00 non-event. There was a 3-4 month lag, before the peak effect. In the current pump-it-up spree, the spigot hasn't been turned off yet. So, let's wait till the Fed stops lowering rates, and shuts down the liquidity gusher. Then, let's wait another 2-4 months. Then exit long positions, and hedge the remaining long positions with put LEAPs. |
