I have no problem in saying that since 2005- 2006 I`ve been sitting on the bear camp. This does not mean that I`ve been bearish all the time but this means that on the overall global macro picture, i do not really believe on the capabilities of our central bankers and governements in “manufacturing”a sustainable recovery.
The tremendous rally we have been witnessing since the low of 2009 has been a climb of pains for the bear with some joyful rides during the few corrections. On the other side, the Bulls riders… have been quite happy and have become more confident.
There are however a few points which deserve some attention here.
Are the bull rally charateristics really the “fear climbing” sentiment that the Bulls like to comment or the “Slope of Hope” sentiment cherished by the Bears ? A few points really draw my attention to try to get to some conclusions.
First of all, i think that part of the rally has been “fear climbing” but overall, we have a rally which has been done on averaging declining volume and this is not really good. Quote stuffing by HFT has simply exploded and the “machines” have taken over a good part of the actual traded volume. Investors sentiments readings have been quite volatile and moving easily from optimism to negative feeling (vice& versa). Putting this in perspective …. I think that we are more leaning towards the “slope of Hope” scenario here !
Is the beginning of the end near? It is always hard to tell but I am definitively inclined in “selling on strengh” since if I am wrong… “the fear climbing” mood may have a bit more to go before changing side and if I am right… the “slope of hope”ride will be quite an interesting challenge.
good luck to all