No Country for Old Bears (or Young Ones)

The S&P 500 continues to do no wrong. After a huge run to start the month of December off, this entire week has been spent consolidating that gain. There is not even a pullback to the 10 day moving average at this point. Despite some loss of leadership from ‘the generals’ of 2010, and some degradation in underlying breadth measurements the idea of “we can’t lose” is alive and well. The information stream of the past few weeks has been almost uniformly positive (excluding that monthly labor report), and the U.S. just ‘bought’ itself an extra 0.5 to 1.0% of GDP for 2011 with the tax + spend stimulus package. There are no worries about the inflation situation arising in emerging markets, and Europe continues to commit to ever bigger bailouts as the global moral hazard explodes. But it’s all good for the speculator class.

I expect the performance chasing community to not allow much of a drop off going into year end (although we are due) and then we know the first day of the month is almost always a winner so Jan 1 should be spectacular… it will be interesting to see what happens in weeks 2 and 3 of January. At some point good news is supposed to be discounted and at this moment we have discounted Goldilocks…. no (government reported) inflation, and bought and paid for GDP growth.

A few straggling bears must still exist but only below Ben’s show on their neck.

About Mark Hanna 542 Articles

Affiliation: Hanna Capital, LLC

Mark Hanna is President and Owner of Hanna Capital, LLC, a registered investment advisory firm. Mark has been a follower of markets since the late 80s, with a focus on individual equities since the mid 90s. He has been a well known commentator in the financial blogosphere for the past 5 years, following a career in corpoporate finance and accounting. Mark attended the University of Michigan where he graduated with a degree in Economics.

As an avid reader, Market Montage is the personal blogging site for Mark to share his views on economics, markets, and the like. Occasional cynicism and wit shall be deployed in his postings.

Follow Mark on Twitter @fundmyfund.

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