Marketview: A Sliver of Blue Sky

• Posted by DynamicHedge
• on February 25th, 2012

What is the event that will cause this market to sell off?  It will surely be a surprise.  I’m searching for reasons to be bearish and besides sentiment and the Dow Transportation Index , I’m not seeing much.  In fact, as far as sentiment goes this continues to be the world’s most hated market.  Veteran traders hate this market because they want action, bears hate this market because it’s grinding them to dust, and bulls hate this market because they’re under invested.

We are now getting to the ludicrous stage of this rally and the mentality among market participants is that you’re a fool not to be bearish right now.  A FOOL.  While I agree that some degree of caution is warranted after such a long run, these types of markets can run for a very long time.  Often, instead of giving deep juicy pullbacks, all they offer is a stingy shallow pause.

One of the principal functions of the market is price discovery.  This market has already defied all the odds, so I doubt very much that it’s just going to tag 1360 and turn around and retreat.  No, this market wants a breath of fresh air and some clear blue sky above 1370.  Whether it gets 4 or 40 points worth of jogging room is the question everyone would like to know.

Technology continues to lead the market while cycling through the higher beta and value oriented names in the sector.  $FCX caught a bid this week and the energy sector is doing its best to bankrupt the consumer.  I find it interesting that investors are cycling out of some safety names like $AEP, $MDT, and $BMY at this point.

Winners: $FCX, $HAL, $BHI, $V, $MA, $AAPL, $IBM

 Losers: $AMZN, $HPQ, $DELL, $MS, $WFC, $AEP, $MDT

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