|Doubt has no Clout|
|Written by L.A. Little|
|Wednesday, 19 December 2012 07:21|
To doubt this market is to put a gun to your head. Doubt has no clout anymore - belief of an ever rising market is where its at.
I say that in jest because I can't "just believe" but the doubt comment is real. Every time and at almost every major inflection point, somehow and someway this market finds its footing, the bears are turned back and a rally ensues. Just look at the charts over the past few weeks - case in point. This latest rally was telegraphed last week when the two-day retrace failed to see volume expansion as prices move lower as compared to what was being tested. I moved out of the short positions we had on and looked to find exposure as a result. Financials are on the cusp of a major long term breakout and industrials are doing just that. This isn't what you typically see in a bearish market and thus one has to assume its not.
I have said for a very long time, the long term trends remain bullish. Over the past few months the intermediate term trends turned sideways and that gave us pause. That meant that we were likely to range trade for a while and that is what we have done. Of course, the rocket ship off the bottom makes range trade seem like a misnomer but it is and has been a large range trade.
With the fiscal cliff dragging on into Christmas, I expect we will see some trepidation here before long. Politicians have a way for the dramatic so what better than a midnight gavel call on New Years Eve?