Wednesday July 11, 2012
"Around the world, the single narrative of collapse has taken hold," says Ed Dempsey, chief investment officer at Pension Partners. "Everyone is positioned for collapse."
Therefore a collapse cannot possibly happen at this time.
This article sums up our feelings about the market. Collapses happen when the public is well invested in the market, it is the fear of losing more money that causes panic selling.
Richard Russell is attacking Bernanke this morning, most websites including stockcharts are looking for the second coming of 2008.
Sure there are sites that are perma bears always calling for a collapse but this is remarkable in that so many believe the markets can collapse with buyers scooping up negative yield French and German bonds. The article points out that
What you may not know is that there are a dozen countries whose 10-year debt is yielding less than 2% right now, and that 7 of these are even lower than the U.S., including Switzerland, Japan, Hong Kong, Denmark, Germany, Sweden and Singapore.
Therefore with the entire world positions for a crash, out of stocks and into bonds, you tell me, who is going to sell stocks to begin the waterfall decline. Stocks are being bought by corporate insiders and those willing to hold at progressively higher lows.
Here is a picture of just that happening, I own this fund in my school retirement plan.
Now couple that with the higher Aussie and Canadian Dollar we showed yesterday and you have the perfect set up for a stealth rally. The weakness from yesterday persists at the opening today but the hourly chart on the SPX looks like it is bottoming as I write. This reinforces the bearish sentiment but we should be running out of bears to go short.