S&P All Time Highs

As the economy slows down, with retail sales barely budging despite consensus expectations for a bounce back from bad weather.  Let's just face it.  Economy and the stock market are trading on their own.  The economy is just not as strong as the pundits say it is.  But that shouldn't make one bearish on stocks.  Because stocks aren't going up because of a good economy, but because of financial engineering, ZIRP, and TINA (there is no alternative).

Last week, we had quite elevated put/call ratios despite a flat market, which often leads to short squeezes, like we had yesterday.  S&P is an amazingly strong market.  It really has broken away from economic fundamentals.  This usually happens late in a bull market.  The fundamentals are deteriorating, but the stocks hang tough.  This is especially the case in a long bull market with easy money policies.

This is controversial, but at this point, the stock market benefits more from low interest rates than it does from a strong economy.  So with interest rates going down recently, the stock market has embraced that as a positive for lower financing costs, and not a negative of a weakening economy.

I am bearish on the economy but neutral to slightly bearish on stocks.  I am bullish on bonds.  I don't know how high the S&P will go, but I do believe that anything above 1890 is not sustainable for long, maybe one month max.  But it could die out within days.  I am not willing to bet on musical chairs at this point.  I realize that I am in the majority, because I see a lot of skeptics of this bull market.  But that is what the fundamentals tell me.  

Nothing to do in the stock or bond front.  Just watching and holding.