March 8, 2012
Still Buying Stocks - Still Shorting Bonds
Several days ago, my most trusted stock broker (who has been in the business for 30+ years) continued to tell me “NOBODY wants to buy anything in the stock market”. There is cash all over the place but he hasn’t written an order for a stock or an equity mutual fund in forever…
Meanwhile, the market is dead on its highs and just keeps chugging higher…Tuesday’s 200 point drop was totally, totally meaningless…just something for talking heads to chatter about as to “why”.
When a market is on its highs, and there is ZERO excitement about it, it usually (I’d really like to say ALWAYS) goes higher. Right now stock broker phones are dead…You never know what the catalyst may be, but I am FIRMLY convinced the next thing we see is a relative blast-off in stocks…Pundits are stupidly wondering if 13,000 has stopped the market? I say we are about to blow through 13,000, and then sail immediately, directly beyond 14,000 before everybody wakes up…and the brokerage house phones will THEN (like 1000 Dow points higher) be ringing off the hooks….Why? I have seen it so many times before…It’s just the way the “game” works.
Concurrent with this rally in stocks , I would look for Bonds to have collapsed as well.
My belief is the economy is strengthening MUCH faster than anyone in the economic community would believe, and with “slow job growth” being one their big “reasons” not to be bullish stocks, I think it is quite possible tomorrow’s Unemployment number could blow those fears out of the water…I don’t ever try to specifically predict economic numbers…There are 100’s of multi-million dollar economic forecasting outfits that are perpetually wrong about 90% of the number that come out so why should I try?...But I do know I HAVE seen 1000’s of “Oh My GOD!” misses in all those economic predictions and can easily imagine this could be the case tomorrow morning…They are looking for 200,000+ new jobs…What happens when it’s 396,000 or something like that?...No, I don’t know but I do believe we are going to see more and more and more stats that are “better than expected”.
I am still long stocks and
wanting to be VERY short Treasury Bonds. If you aren’t in, and just think
maybe you ought to be, do give me a call.
And I just LOVED this headline in USA Today this morning: “IS THE END NEAR FOR THE THREE-YEAR-OLD BULL MARKET?’. The article was followed by ALL sorts of reasons to sell stocks.
Unemployment, which may or may not matter, comes out at 8:30 tomorrow. If you do want to look at having something on, give me a call (even tonight) or early tomorrow. The markets trade all night.