Gains in S&P and NDX since beginning of year are real and are going to be protected by long PUTs and/or covered CALLs while world markets debate US GDP growth rate and job gains.
As long as inflows to long equity funds keeps up at the pace of last few months, squeezing shorts seems an easier task for the market makers then having to attack dip buying by the longs.
I can't see how sum of all cash destined for equities, domesitcally from 401K money and dollars repatirated from foreign trade imbalances doesn't continue the status quo unless US goes into economic and/or as equally important geopolitical tailspin.
This is only news I could find to explain move up in market.
3:06pm 09/02/03
Treasury spokesman reaffirms 'strong dollar' policy By Corbett B. Daly
WASHINGTON (CBS.MW) -- The Bush administration has made "no change" to its so-called "strong dollar policy," Treasury Department spokesman Rob Nichols said. "It's our view that currency values are best set in open and competitive markets," Nichols told reporters in his office. "We believe in a strong dollar," Nichols added. Treasury Secretary John Snow is meeting with Chinese officials in Beijing, where he is making it clear the White House would like the government there to loosen its currency peg to the U.S. dollar. Nichols said "it's important to deliver the message" to the Chinese. Manufacturing groups and lawmakers on Capitol Hill have stepped up pressure in recent weeks on the administration in recent weeks to urge the Chinese to relax its currency controls.
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