Here we are, within a stone’s throw of 1369. That high in the spooz was posted in May of 2011, May 2nd to be exact. To refresh any lack of short term memory, 4 months later, on 8/9/2011, S&P was at 1101. That only 268 handles in 20 week. No worries. Just another buying opportunity…(That was my attempt at sarcasm). 20% correction in 20 weeks.
Please keep that in mind as you watch TV and listen to the radio this week.
The squawking has been about the jump in oil prices. If the S&P can post at fresh run at this high, that will be the highest tick since 6/6/2008.
Almost 4 years. Hmmm… Interesting, who will take credit for this rise? Who ever does will be on dangerous ground. Because if they take credit for the rally, certainly 300Million US voters will be glad to blame them for the eventual roller coaster drop into the oblivion of a 10 or 20% correction again.
You most likely will see a story in the major periodicals this week, if the Dow can settle above 13,000. The cheerleaders will be out in force. Just remember, the record high was 14,800 in the Dow. Last week I already saw bulls talking about Dow 15000.
If history is to be learned from, then take heed. These are the same damn market mavens squealing when the Dow was down at 6500 that “that was the time to sell”. I continue to want to be using these multi-month highs to 1)take profits and 2)look for rallies to sell.
Also, now is a great time to buy some cheap puts on the S&P 500.
Do you really think that the Greek government will honor these agreements? Seriously, the odds are not good in my opinion. And I just base this on my own understanding of human nature after reading and watching for the 45 years I have been on this planet.
Also don’t forget, we have Portugal, Spain, Ireland, and Italy yet to go.
Back in the 50’s and 60’s there was a popular fear amongst western nations that if one nation fell to the threat and menace of Communism, we’d have a domino effect. Just like a line of dominoes crashing down.
That never came to play out. And the countries that did fall to communism, all eventually embraced free markets when they realized that money beats ideology at the end of the day.
I am just wondering if we are looking at a new version of the domino effect, if Greece melts, what will be the reason the rest of the Piigs will hold the line on spending and taxes?
In the USA, we have the largest economy in the world and we can’t come to an agreement how to cut spending and pay off the debt… How are countries with GDP’s minuscule in comparison to ours going to do it?
So, in eclosing, if you are a bull, keep riding it, but I would be taking profits and looking for rallies to sell.
I started off 2012 recommending fading popular negativity in the US and getting long. We’ve had a great rally… Now as sentiment is moving to “every thing’s all right… lets get long everybody”… I am cautiously looking to head the other way.
CER