I remember what was the ultimate bullish contrarian indicator when we were at the depths of the latest bear market bottom. Nouriel Roubini was taking a trip around the world admonishing investors as the air of desperation and Armageddon were upon us.
Guess what I saw today on the front page of Marketwatch (and on every other financial news source)? The face of the bulls, Abby Joseph Cohen, declaring that we were in a bull market. Tack on to that: the S&P was headed to 1,100 by years end.
This kinda looks like the opposite of early March. Euphoria reigns supreme.
Consider: AAII index shows a bullish reading not seen since Oct of 2007. Credit Suisse’s global risk appetite; same story, euphoric levels not seen since Nov of 2007. Dollar bearishness reigns supreme. Bears are “playing the game” of bulls because they have no choice. In China, retail investing accounts are opening at levels not seen since the end of the last bull market.
These are the things that I see and hear around me.
Now for some underreported news:
Quant Easing Ending (my previous Blog post is about this)
In addition: Cash for Clunkers and the Homebuyer’s credit are set to expire over the next few months. Then we will see if demand is sustainable.
We could go higher, we could indeed visit 1100 on the S&P (lord knows when it will end), but looking 6 months out, there’s not a lot of upside and a lot of downside. We would indeed need to see the immaculate recovery just to move up another 100-200 pts from here. But if anything, and I mean ANYTHING, starts to smell fishy in regards to this recovery, well…we might not be in Kansas anymore Dorothy.