For the past few months the bulls have had their day, with continual moment upwards and not a pullback in sight. The volatility of last year all but seemed to vanish as a new calendar suggest a brand new market. Did the S&P just happen to switch its style up, or is the old volatile S&P of last year hidden behind the mask of good economic news? With so many investors calling the S&P to higher and higher levels, one just has to wonder, is this not a mere replication of what we saw last year? The retail investors seems to get caught in the trap over and over again with all the experts saying candidly that we will move higher levels. We at some point will move to the new highs, but will do so with fewer economic headwinds. The events around the world are by no means settled and only look to get worse, both economically and politically. All the good economic news has surely made investors feel warm and fuzzy on the inside, but when bad news comes out once again (which it will, because it always does) the bullish world will see a short and sudden death. Those suggesting that the market will continue to infinity and beyond in the coming months and years are just plain wrong. The U.S. led the world into the great recession and we must wait for the rest of the world to experience this economic downturn before the U.S. is able once again to lead the world into a recovery. With that being said, the increased bullish sentiment we have seen is a mere red flag that investors need to be leery of.
“I always tried to turn every disaster into an opportunity” – John D. Rockefeller