Two Things That Would Make Me Bullish

One of two things need to occur in order to make me more bullish. From a fundamental perspective I would like to see Italy make reforms. If Italy were to agree to reforms than I believe the EU would come to its aid. Right now we are witnessing a high stakes game of chicken where Italy refuses reform as Italian bond yields climb. If Italy were to agree to reforms I would become very bullish.

The seconds thing that would make me more bullish is if the market declined a bit next week and shook off some of the excess optimism we have seen build up recently. I want to get more bullish as this is generally a very good time of the year for the market. But the combination of excess optimism and a standstill in Europe are stopping me. Have a great weekend.

2 comments:

Anonymous said...

Hi Tsachy, how do you reconcile your bullish stance with the Hulbert information you cited earlier? Hulbert's data would seem to indicate a bear market rally and that we may see the lows again, whereas your calling for a rally because of seasonal factors (and yes if the one of the other two items occur). Do you think we rally into the year and then sell hard?

Tsachy Mishal said...

Im moderately bullish right now. Information like the Hulbert data I cited earlier stops me from getting more bullish. Thats why Im hoping for the market to get hit next week, so we get rid of some of the excess bullishness.

The Hulbert information tracks short term market timers. I dont use it to make intermediate term assessments.