The Bull's Siren Song

Late last week we finally saw sentiment that is consistent with an intermediate term top. I want to remind readers that the bull case always sounds best at the tops and the bear case always sounds best at bottoms.  At times like these I try to close my ears to all the great arguments and concentrate on what has been the result of one sided sentiment in the past.

There are two items that make the current juncture a little tricky. The first is that tops are always tricky. Bottoms are a lot easier because once sentiment turns extremely bearish one can usually grit their teeth, take the pain and before you know it the market turns higher. Tops can wear on and on and really test one's resolve.

The second tricky item is that it is very rare to see a good intermediate term top at this time of year. In extreme cases it does happen, when there is  a major shift in fundamentals like the bursting of the tech or housing bubble. Currently, I don't see a major fundamental shift but that does not mean we will not have a correction. If my memory serves me correctly we had a 6% correction last November followed by a year end rally. I am expecting something similar.

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