The Hard Money

The easy money has already been made as we have gone from extreme pessimism to extreme optimism. During this period the S&P 500 has gone up over 20%. It is possible that sentiment stays extreme and we grind out a few more percent before a correction. But chances are that when this correction arrives these gains are taken away.

All this does not mean that there is no more money to be made, only that there will likely be better opportunities. If we did get some sort of a correction, the risk/reward would look a lot better. My best guess is that the market struggles in the days after expiration and a bigger correction should start by late January.

4 comments:

Anonymous said...

sorry "google"

Anonymous said...

do you consider it a plus or frothiness that goole got hammered today and the overall market heldup?

Weekend Reading – Finance & Investing Links for 1-21-12 said...

[...] The easy money has already been made….. -  Capital Observer [...]

Tsachy Mishal said...

Tops are very tricky. Most of the evidence points to us being much closer to a top than a bottom.