It was a frustrating week. The big
rally early Monday, had me scrambling to cover sold calls for losses.
Later in the week DIS moved higher after analyst comments. Overall, I
eek out a small gain, a bit less than the gain in the indexes.
At the anecdote ranch, a friend asked me about the stock market. He is an older man, never did much in the stock market, has done relatively well in real estate. This is the kind of person that gets interested in the stock market at tops. Market tops form with a relative maximum number of buyers.
The bear case is substantial. The Buffett indicator, total market cap vs. GDP, the CAPE or Schiller PE10 both are at red line. The inverted yield curve, the failure of transports to make new highs, and semiconductors falling are all red flags. The large number of speculative IPOs, relatively poor market breadth are two more.
So what is on the bull side? The AAII sentiment indicator remains in neutral. Large numbers of newbie investors fear the bear. A few are asking about all in on leveraged long ETFs, but far more talk about selling everything and waiting for the inevitable bear market.
One of the stronger bull arguments is about alternatives. With bonds also at nose bleed valuations, cash paying only a little, gold remains far off its highs. 2% or 3% just doesn’t cut it, so people are forced to take on more risk.
At the anecdote ranch, a friend asked me about the stock market. He is an older man, never did much in the stock market, has done relatively well in real estate. This is the kind of person that gets interested in the stock market at tops. Market tops form with a relative maximum number of buyers.
The bear case is substantial. The Buffett indicator, total market cap vs. GDP, the CAPE or Schiller PE10 both are at red line. The inverted yield curve, the failure of transports to make new highs, and semiconductors falling are all red flags. The large number of speculative IPOs, relatively poor market breadth are two more.
So what is on the bull side? The AAII sentiment indicator remains in neutral. Large numbers of newbie investors fear the bear. A few are asking about all in on leveraged long ETFs, but far more talk about selling everything and waiting for the inevitable bear market.
One of the stronger bull arguments is about alternatives. With bonds also at nose bleed valuations, cash paying only a little, gold remains far off its highs. 2% or 3% just doesn’t cut it, so people are forced to take on more risk.
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