The First Dip

Dip buyers are getting their first chance to buy a pullback since the rally started, so its little surprise that 1130 on the S&P 500 has been defended on the first test. While I still believe that portfolio managers are under-invested and nervous, the greater than $40 billion worth of secondary offerings this week will go a long way in helping to get them invested. Due to how extended the markets are I expect that the upside will remain limited and a break of 1130 is still a very good possibility.

1 comment:

Anonymous said...

the way that every downopening is being bought is very indicative about the strength underneath.

As you said several times big speculators are underinvested and as long as this lasts we probably will not see falling stocks.

Although there is a myriad of economic reasons why this market should fall apart it usually pays to bet against the common sense logic. And it pays most of the time to bet against J.Hussmann's comments ;)