Wednesday, July 15, 2015

Going Higher

The selloff over the past few weeks has taken out the weak hands.  The market didn't do it by taking the price very low and scaring people out with violence, but with scary headlines from Greece and China.  Those are the bottoms that usually last for quite a while, the ones with the scary headlines.  Now that Greece is solved, not that it matters (except for the chicken littles), and China has stabilized via brute force market manipulation, you have a market that has a clear runway to new all time highs.  It should not be a blastoff, just because we didn't go down enough, but it should be slow and steady to new all time highs.

There is no way I would short this market, and although short term overbought, any consolidation here will just set up the market for higher prices next week and the week after.

Bonds look like they will retest this year's lows, despite the weak economic data.  It is the fear of Fed rate hike again creeping in, and also the slow dissipation of the safe haven trade over the next few weeks which will put downward pressure on bonds.

Be back next week, the market is back to the old bore grind up higher mode.  Been there, done that.


MM111 said...

Thought we would maybe get a little pullback but wow, we are only a dozen points away from the high already. Talk about fast.

Market Owl said...

That is what happens when everyone already rushed to the exits and they all rush back in. Strong buying probably lasts another week or so.