Give Me a Double Order of Pessimism
The biggest bull sign I see right now is a huge amount of pessimism in the market. To a certain degree it is the byproduct of election trail rhetoric, "the worst economy since the Great Depression", "a huge outsourcer of jobs", "we're better off now then where we were on the brink of collapse in 2008."
How about the fact that aside from Europe things are really not too bad the last several months. I've read that a 1 cent increase in the price of gasoline decreases disposible income by 600 million a year.
So by my rough math with gas trending down about 30 cents a gallon in the past few months, we should be seeing an increase in disposible income in the 18 billion dollar range. While this may not seem significant, I'm sure malls and restaurant operators would disagree wholeheartedly and say it absolutely does make a difference.
The take away? Watch the retailers and restaurants over the next couple of quarters. The bar has been set pretty low. And as an opportunistic bull, I'd like to order some more pessimism.