since this board has a multitude of vocal bears, it would be nice to get some bulls to plow on their opinions. I would like to see more argument supporting 3rd wave from the large # of silent bulls on this board.
And I pray the multitude of bears here never go away. I believe a lot of silent bulls on this board have already made their case and are too busy exploiting the opportunities since the summer lows. Charles (Tuffy88) comes to mind among a few others. Nothing much has changed. Record cash in corporate coffers resulting in a record number of buybacks, record and growing cash in the hands of private equity/buyout firms worldwide resulting in a record shrinkage in the supply of stock. Heavy shorting by the public and hedge funds vs. the NYSE Members. A junk bond market that refuses to buckle. Leadership seems to have shifted to large cap growth/tech such as Microsoft, IBM, Hewlett Packard, Cisco and now even Intel showing signs of life. The past two years 90% of fund flows have been outside of the U.S. Watch out above as those flows revert back domestically. Eventually it will all come tumbling down as IPOs swamp the market, rates rise worldwide, the derivative markets begin to unravel, and the public becomes more fully invested. But until ***price*** begins to reflect such scenarios what is so wrong with exploiting this wondrous bull trend for as long and as much as you can? Just as in the late 90s, it seems the risk averse and those so intent on compounding complexity are sitting idly by as the markets make new highs after new highs.
Those are all good arguments why this could be a wave 3 and not wave 5.
And if we are in a wave 3, which should be the longest wave of the impulse waves, then I would expect this trend to continue.
Hence, we should, in the coming days (because earnings season is due on us), see rising earnings, not diminishing earnings. But more important, rising guidance, not lowering guidance.
Plus an increase in private equity activity, which is fueled by junk bonds, so a continued rise in junk bond prices should be seen.
Also, price increases in large cap growth tech issues, mainly represented by NDX. Since NDX was lagging for much of this leg so far, we should see NDX leading as its shown at least in the last few days.
And with primary wave 3, since it is the trend that many start to "recognize" as the true bull market, the short positions should start to come off as prices head higher? Now one evidence that's disturbing, however, is that with this leg up, the commercials are heavily hedged.. but I am fully in agreement that the public is highly skeptical of this rally, and it is still by far the biggest evidence arguing against a 5th wave.