Post by brosin on Aug 15, 2010 19:32:01 GMT -5
What I want to know is why anyone is still buying. Was thinking back today to 6 weeks ago when FAS went into the $50s and no one would touch it. Now it has gone into the $100s and no one can be out of it?
There are a few different reasons I can think of as to why the market is just exploding out of the severe damage that was on the horizon at SPX 1044. First, that this is all short covering and that no one is really buying. The put/call ratio would be an indication of severe hedging of short equity positions going on in that case. Second, maybe the big banks are using free money to push the market higher and higher to set up a massive drop (in a much shorter time horizon than I had initially anticipated as being many years out). Third, maybe this *is* inflation. Money chasing money chasing money... the bond market doesn't seem to think so, but the equity market is making a very strong case for it.
The problem is none of these reasons really click for me and I am stuck anticipating that the market is set to drop from the 1200-1210 level in a swift fall for at least 3-5%. The higher we get and the bigger the swings back and forth get, the more dangerous I believe it is getting.