Comments on: S&P 500 Index Reaches All Time High - 1530.23 http://www.tradersnarrative.com/sp-500-index-reaches-all-time-high-153023-992.html Freshly squeezed market commentary & analysis Sat, 21 Nov 2009 13:25:04 +0000 http://wordpress.org/?v=2.0.2 by: Babak http://www.tradersnarrative.com/sp-500-index-reaches-all-time-high-153023-992.html#comment-7316 Thu, 31 May 2007 12:59:51 +0000 http://www.tradersnarrative.com/sp-500-index-reaches-all-time-high-153023-992.html#comment-7316 Ryan, been there done that :-) lol so I know what you mean. That's why I try very hard now to base my bias on a confluence of data, indicators, sentiment, etc. Not just "because". No one knows the future, but right now, the things I'm watching are all flashing a green light. Maybe the market is looking around the corner and seeing something we can't right now. Who knows? Ryan,
been there done that :-) lol so I know what you mean. That’s why I try very hard now to base my bias on a confluence of data, indicators, sentiment, etc. Not just “because”. No one knows the future, but right now, the things I’m watching are all flashing a green light.

Maybe the market is looking around the corner and seeing something we can’t right now. Who knows?

]]> by: Ryan http://www.tradersnarrative.com/sp-500-index-reaches-all-time-high-153023-992.html#comment-7307 Thu, 31 May 2007 09:13:51 +0000 http://www.tradersnarrative.com/sp-500-index-reaches-all-time-high-153023-992.html#comment-7307 "I find it still supportive that so many people, even active traders and investors, are in denial of what is right in front of their quote screens. They simply do not want to believe this is a bull market." I love this comment. From August 2006 to April 2007, I was convinced the stock market, and in fact the global economy, was about to collapse imminently. I lost a lot of money in the process, repeatedly believing those that once again had called the "market top". What turned me bullsih was how the markets shrugged off the Feb 27 decline. My basic theory is this. Since about 2005, the markets started to price in the well known fears: debt, trade deficit, housing boubble, oil, geopolitics, money growth, inflation, carry trade, you name it, any of which were about to bring apocalyptic collapse at any moment. Slowly, slowly, it is realised that none of these fears are actually materialising, or if they are, like the housing bubble, the fallout is actually not as bad as was feared. What is happening in the markets is that what I call the "fear discount" is being unwound. That's why the markets keep going up on low volume, but occasionally jolt back down on high volume, as once in a while one of the old fears rears its ugly head again. I believe without any major disruptive event, if the fear discount gets completely unwound, we could easily be looking at S&P 2000 and DOW 20000 in 2008. “I find it still supportive that so many people, even active traders and investors, are in denial of what is right in front of their quote screens. They simply do not want to believe this is a bull market.”

I love this comment. From August 2006 to April 2007, I was convinced the stock market, and in fact the global economy, was about to collapse imminently. I lost a lot of money in the process, repeatedly believing those that once again had called the “market top”. What turned me bullsih was how the markets shrugged off the Feb 27 decline.

My basic theory is this. Since about 2005, the markets started to price in the well known fears: debt, trade deficit, housing boubble, oil, geopolitics, money growth, inflation, carry trade, you name it, any of which were about to bring apocalyptic collapse at any moment. Slowly, slowly, it is realised that none of these fears are actually materialising, or if they are, like the housing bubble, the fallout is actually not as bad as was feared. What is happening in the markets is that what I call the “fear discount” is being unwound. That’s why the markets keep going up on low volume, but occasionally jolt back down on high volume, as once in a while one of the old fears rears its ugly head again. I believe without any major disruptive event, if the fear discount gets completely unwound, we could easily be looking at S&P 2000 and DOW 20000 in 2008.

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