Yeah, the market is just dead for trading. We all know why it's going up and that the 'proper' play is to just hold your nose and go long. But this rally is completely artificial, the volume speaks volumes as to how the pros think, and shorting is very dangerous. One thing we know is that ALL artificial attempts at proping up anything always fails miserably. This will end up being now the 3rd major stock bubble created by the Fed in just over 10 years. Unbelievable.
Today on CNBC, two money managers were trying to explain why you have to go long stocks because the economy is getting stronger and how inflation is always good for stocks. Yet, in the same paragraph, these idiots then said QE 3 is right around the corner, thus continuing to add fire to this rally. HUH??? Are you F'ing kidding me? Why would the fed need to do QE3 if the economy is so strong????? WTF are you talking about?
This is a CLASSIC example of CNBC's never ending pump up the market at all costs mentality.
Then, turn over to Bloomberg and they have a guy explaining how sure, these companies are raking in the money right now, but based on historical ratios, this is most likely the MAX you'll ever see in terms of profitablity and margins, thus a 'peak earnings' event this year. Then he went on to explain some 4 prior times in the last 40 years how peak earnings then led to massive bear markets. The idea being, if you can't get any stronger, how the hell do you expect investors to pay more for your stock?
See the difference between networks? They then also had a segment on the effect of inflation on stocks. The track record isn't so good as that dumb$ss on CNBC tried to get away with.
Bottom line is this - SPX 1350 represents a 15 or so PE on the index with the assumed $92ish per share this 2011 year. Fair valued at best, a tad over valued historically. Last week's 1344 high is going to be the benchmark, with 1350 being the probable target potential before any major change in trend. The extremes are piling up. Just look at a chart over the last month of the semiconductor stocks. Down down down. Then look at MRVL tonight. Yikes.
Semi's are always market leaders because all technology is built with, wait for it... semi's! So, if those stocks are falling in a 'raging bull market', something is dead wrong. The internals are telling a different story.
Again, technically, this most likely is just market churning with a possible retest attempt at last week's highs around 1344ish. A solid close above 1350 means most likely 1375 to 1400, which I would take as a monster short trade.
Also, I would seriously look at that SOL trade the account is in. That stock now is trading at a PE of 4 and growing over 25%!
AI
