As I suggested last week, it makes obvious sense to expect the market to continue to trade higher in the near-term (except for the fact that such sentiment leads to lopsided setups, which, in and of themselves are cause for concern).
Of course the question, is, are there obvious — or legitimate — reasons to be concerned as we gaze a bit further out?
Well, yeah, per Saturday’s macro update, and per the below from an oft-quoted currency analyst/market technician:
“….the Wall Street Journal report recently by James MacKintosh that recently found that almost 40% of the companies that trade on US exchanges have lost money in the past year, the highest since the dotcom bubble. It may take though a convincing break of the 3200 area to dent the bullish fever.”
My comment from last week referenced above:
“As for the near-term outlook in stocks, the Jan 15th phase-one signing should keep traders engaged; there’s no reason given the latest action to think that that won’t inspire further buying. However, if it doesn’t, look out! Plus, I suspect immediately upon signing we’ll hear promises of jumping right to phase-two negotiations, which, if the market runs true to form, could keep stocks buoyed for the time being.”