Up, up and away – it’s Super Market!
It’s bugdet proof, oil proof, terror (threat) proof, housing proof, inflation proof and pullback proof 3 weeks in a row!
This is truly a Market of Steel (and the recent movement of X underscores that) and looking at the movement of the past week we really do have to believe it can fly… Is the US consumer (driver of 2/3 of the economy) really impervious to harm? What, if anything, is our stock market Kryptonite?
Why is the retail sector down 7% for the year if everything is so great? I know, I’m supposed to switch my brain off and just go with the flow but even Superman can be more effective if he knows to look out for glowing green rocks. The rational approach to this sort of market is to participate in the rally, enjoy it while we can, but keep a lookout for signs of weakness that undermines the overall strength. As I said back on August 22nd: "We (US equities) may actually be the least sucky place to put your money in the second half of ‘07."
While we took a bullish posture based on my outlook, we didn’t take THAT bullish of a posture as there are just too many darn things lurking in the corner for us to ignore. Here we are, one month and 1,000 points later and we’ll have to say it this time like we mean it: "Sure we have this overhang of sub-prime mortgages and we’re fighting a war of attrition for goals we’re uncertain of at an absolutely staggering cost while plunging the economy onward to $10T in debt but – so what? We’ve been doing that since 2003 and the market is up over 50% since then and last year I dubbed it the Meatball Market because bad news Just Doesn’t Matter!"
It just doesn’t matter, It just doesn’t matter, It just doesn’t matter, It just doesn’t matter, It just doesn’t matter!
Unstable currency, runaway commodity prices, spiraling inflation, low savings rates, hedge fund collapses, declining home values, banks writing down their virtual portfolios, hundreds of thousands of layoffs, millions of foreclosures — it simply does not matter as long as they are LOCAL problems for the US as we are a smaller and smaller cog in the great global economy, one day we may even…