Next Bull Run Starts Late Today
Most of you know that I'm a bear, but I'm not a perma-bear and I understand the power of psychology and greed in finance. To that end, I am very confident that the last two days are merely a temporary aberration and after more selling today, the bulls will begin buying again.
Potential flaws in my bull theory are as follows:
1) The Republican led House can actually show a backbone and not extend the debt ceiling. I see this as a very small risk.
2) Libya could stay in flux for weeks. There is probably a 70% chance of this, but I believe this is already discounted by the market.
3) Saudi Arabia could begin to see protests. This is highly unlikely, as the Sunni's view the Shiites in Bahrain as heretics.
4) Israel could do something provocative. Zero chance of this. U.S. has them doing exactly what it wants, which is nothing.
5) Bad economic news on economy. While there is a 100% chance of this, the psychology of investors today is still looking on the bright side. Higher unemployment equals longer period of low interest rates. Higher prices isn't inflationary as much as better chance at GDP growth.
Please comment if you see other potential flaws, but I'm going all in around 2pm today.