A lot of us are able to remember 1987. I was a pup broker. I remember as spring wore on, secondaries (where all the Val-yuh Stocks were, and which Legg Mason encouraged us to focus our buying) did nothing or declined some, even as the DJIA just ground higher and higher. This of course went on for months. Had you shorted the majors, it would have been painful.
The current market, which has been narrowing, has a similar feel. I'm not going to say that it ends the same way. In fact, the sentiment profile is utterly inconsistent with a top of any import, let alone a Crash.But, I suppose the take-away is that, chances are, the leaders will grind higher for longer than expected, and we probably should not fight that. Also, we probably ought not bargain-hunt in the secondaries for a while.
ST, the very low P/C's bother me, but those tools are not as reliable as I'd like. Also, the low Rydex Ratio is pretty low, which has often, but not always, indicated some trouble ahead.
