Here we are 31 years into a bull market and the only people who seem to be willing buyers are the government. And Moody’s came out to tell people they don’t think the bond market is going to overheat anytime soon. Did they really do that? I’m afraid they did. See, they have it all backward. They are mostly concerned about a bubble which means they don’t think prices are in danger of going higher. The problem is what happens when it goes lower? How fast will it accelerate? The bigger problem I have with these ratings agencies is they are absolutely clueless and also complicit with everything that happened that caused the original crisis to materialize. I don’t think any of them have a lot of credibility anymore. They cut ratings these days more on political concerns than anything else.
On Sunday night the market gapped down slightly. I want to see just how much juice this 233 day window along with those decent Fibonacci relationships in the NASDAQ turn out. It’s going to be the story of this week. For the moment think of the last 2 important windows. The one in September/October was important but did not bear any fruit. The Gann master time window in March didn’t bear any fruit either for bears. This is not the bears I remember. I don’t even think they are going to be the ones that influence a pullback should it happen. Anything that develops right now is more due to weaker hands getting shaken out as opposed to anything else. I think bears are traumatized and not likely to mount anything huge. At the end of the day we are due for a pullback/correction and the more people don’t think it’s going to happen, I think it can.
Finally, if Europe has been leading these markets higher since December then they are still leading because they broke free. For us to have any sustained action to the downside we are going to need European participation. The bears came up woefully short there as well.