A Scent of Fall 2006

I hear a lot about how it is like 2007 or 2000 among financial pundits.  While there is a little bit of 2000 in this market, if you look at investor attitudes, it is completely different.  It is nothing like 2007 because you have no stresses in the credit markets.  It actually feels most like the fall of 2006, after you had a bond selloff earlier in that year.   When those fears of higher interest rates subsided, the stock market bottomed and kept going higher and higher, as yields went back down.  

Also in the fall of 2006, you had extremely low volatility among the financial asset classes, just like you do now.  If this market really follows the same script as 2006-2007, then you have another 200 points of upside in the S&P.  Although I don't think we get to 2100 within a year, it is distinctly possible.  

The biggest difference between then and now is that Fed funds rates are at zero, and the economy is actually weaker now than it was then.  So 2014 is without a doubt a worse market to be long in than 2006, but if we get an overshoot, which I give about a 30% chance of happening, it could take us to 2100.  

Now until June 5 is probably the safest time to be long that I've seen in a long time.  The  Draghi put getting priced in.