Market turns always come at extreme levels of optimism and pessimism. If everyone is expecting a severe drop in the market, it probably won't happen. When tech stocks were rocketing up, everyone was prediting 100% gains for years on end; now everyone is predicting single digits for tech stocks, including IOMG. Rarely is the consensus right, and I don't think this time is any different. The fact of the matter is that most corporations have beaten the estimates, just like every quarter since the economic expansion began. Further, if the second half of the year is as awful as everyone is predicting, Greenspan will begin to decrease interest rates, propping up stocks. Real bear markets begin AFTER interest rate hikes, and in the recent cycle, there have been two declines. Look carefully at
the clues provided by the bond market and CRB index. The bond market has been in a rallying mode lately, going from about 7.2% to 6.96% on the long bond, and the CRB has been trending downward. Just like most people bought tech stocks at the wrong time (at their highs), they are now selling at the wrong time (at the lows, give or take 10%). This cycle has been repeated since stock markets have existed.
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