The rose colored glasses index (consumer confidence index) rose to it's highest level since September and the market gets happy about that? Does anyone remember what happended since September? Clearly that means nothing. Just because people have decided to sport some new rose colored glasses does not change reality. Just feeling more confident does not change anyones reality. Reality is the public is buried in debt and can not spend until that changes. That will not change until people pay down their debt or default on their debt (which means more government debt to bail out the banks). This is a process that took YEARS to build and undoing this is a process that will take years not months. Perception is NOT reality.
We have only just begun....
Sovereign debt defaults are looking all the more certain in Argintina, Ecuador, Venezula and maybe even.....Russia. If not in the next few months, surely in the coming year. I'm starting to wonder if any of these countries will pull out some desperate measures with the hope of getting the oil price back up. Although I'm not willing to bet on that. [more]
People have lost all rationality and are selling with a total lack of common sense. I have been bearish for quite some time, doing well mostly on bearish calls (haven't been here as long as some of you old timers). I knew when it sold off it would over-sell...that is normal, but this extreme is not. I still do have negative views on commercial real estate as a whole and select banks (DRL). However, most of my bearish calls now mostly mean I think they will trail the S&P 500, they don't have to go down. But the market as a whole is WIDELY oversold in my opinion. I am officially coming out with my bottom call (we all know there is no absolute way to know this) but based on sentiment alone which I am experiencing and it's disconnect with reality (although granted reality is not good)....I am calling today's low which was reached (DOW 7,882) THE BOTTOM. It may be reached again.....maybe even on Monday. But risk/reward is clearly pointing one direction. Retirees have lost their mind and put their future in jeopardy...even selling their high quality bond funds. In these troubled times we need ClearEyez and a calm mind. [more]