even fleck thinks there's a good chance we go higher:
Stars and Stripes and Stocks
Turning to the stock market at large, it is still a little too early to say whether the rally is going to be over shortly or have some legs. Obviously, after eight up days in a row, the market could be viewed as due for a setback. But to take a step back from day-to-day trading, one of my reasons for wanting to be out of the way on the short side is my belief in the potential for a rather protracted rally. I am not saying that this will happen. But I do think that there still exists a fair amount of denial and a willingness to believe that all will be OK.
I felt that if the rally could turn the stock indices positive, which has been the case, as I pointed out, this would bolster the belief that we weren't going to have a fourth down year. I also felt that if oil prices collapsed during the war (which I thought we could see), that would be viewed as a tax cut. Further, I felt that the dollar would rally, making people feel better, and this has happened.
Of Basra and Kumbaya
I also felt that if the war were to go well (it has so far, and I expect this will continue -- but on the other hand, we haven't seen any severe fighting), people could get kind of a warm-and-fuzzy feeling about things improving in the Middle East across the board. All of this would provide fuel for them to ignore bad news. And if we get through the very bad news that's going to come on the earnings front this quarter, then it might be all the way into next quarter's preannouncement season before the rally fell apart.
I can still see that case developing, but it is just too early to tell. I think people should not be stunned to see a rally that goes on longer and further than most expect and sucks folks in. I still don't have a strong opinion about whether that will prevail, or whether the rally has been so well discounted and good news about the war has been so well discounted that the rally will end any minute now. |
