<there is still no selling pressure here.>
Agreed. With few sellers, a very little bit of buying can cause substantial price movement. However, we should be getting into the realm where there are few buyers as well. If you thought this was the bottom, you've probably bought it. Everybody was trying to get a jump on the favorable seasonals as well, which probably moved the January effect into November.
I think it can saw a little higher through the holidays, if for no other reason than there just aren't a whole lot of motivated sellers here. The mufus appear to have staunched the flows for the time being. I don't know about the overseas investor, though. The dollar is hovering right at year lows, and the Euro continues to look good. Why in the world they would hold US assets is beyond me. If either group starts selling again, prices will fall quickly.
Insider selling is returning now that we are past earnings season, especially in the gigacaps. Corporate cash flow doesn't look like it can support much in the way of stock repurchases for the time being (cept Dell of course). Have the institutional funds finished reallocating out of bonds and into equities yet? I don't know, but they've got to be a major factor in this rally, much like last years'.
The odds bet longer-term (9-18 months) remains fresh lows, especially in Dow types. However, I'm being very patient in releasing the hounds. There's no hurry to get short. If it goes up, it will continue to do so quickly; if it goes down, it will probably do so grudgingly, barring some exogenous shock.
BC |
