Diamonds and Dogs
This is What a Bull Market Feels LikeThis is What a Bull Market Feels Like
The headline news could be seen as tremendously bearish. Rip Van Winkle would awaken to see the combination of a 9.0 earthquake triggering a deadly tsunami and nuclear meltdown, the credit rating of Portugal being downgraded, no-confidence in Canada, and war with Libya and just shake his head. Throw in $105 oil, home building at a standstill, and US interest rates poised to rise dramatically and Rip would surely be a bear on stocks. But stocks continued to climb throughout the week on the backs of good earnings, investment deals, and low valuations as lean US companies continue to profit. This is the sign of a bull market, negative news in the papers and on TV is shaken off as the market heads higher. The VIX (volatility measurement) was near yearly lows as well as if fell 27% for the week, the biggest weekly drop since August 2007. I would suggest that this bull, albeit strong and focused, could be prone to some nasty selling if and when the punch bowl of easy money is taken from the bar. Buy another round Rip and Bulls beware.
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