By Paul Schatz
Friday is another seasonally strong day on the heels of Wednesday. Don’t forget that the stock market closes at 1pm est. In my previous post (see below) I mentioned that the seasonal stats don’t forecast magnitude, just direction. What a perfect example as the Dow closed up a scant .01%! It looks like the Dow, S&P 500 and NASDAQ 100 are biding their time nicely and consolidating the big gains from a few weeks ago. At the same time, the S&P 400 and Russell 2000 have stepped up in a big way as I thought they would.
Next week should see some more significant action when everyone comes back to work. Until proven otherwise as I keep offering week in and week out, weakness should be bought for further price advance. Yes, I know that the geopolitical news is bad and the pundits say our economy is heading into recession and Europe is a mess and Japan is about to fall off the cliff. Someone must have forgotten to tell the stock market!
Come On In Bears; The Water is Nice!
It seems like every call and email I get and most conversations I have are with folks who have a very negative view of the markets. I continue to feel like I am on an island alone in my bullish view. The masses just dismiss the upside as nonsense with global terror and Europe on the verge of recession and Japan probably in recession now. When they finally throw in the towel and accept the bull, then I will become concerned that it’s almost over. I feel for my peers who watched stocks go down and did nothing. Then they watched stocks rally and did not nothing again. They keep waiting for the perfect set up that’s simply not coming.
Remember, price is the final arbiter! The most bullish thing a market can do is go up in the face of bad news. That certainly qualifies today. I know of no one who has pounded the table harder than I have that this bull market may be old and wrinkly, but definitely not dead. More all-time highs are ahead. Dow 20,000 by the end of next summer. Come on in bears, the water is nice!
Finally, don’t forget that tax loss selling season is upon us.