Tuesday, December 21, 2010

Sideways is the New Down

In many ways the market has become very repetitive in December; there is very little to add that was not said 1 week ago or 2 weeks ago - you cannot short it.  Either the indexes go up or sideways, after a premarket mark up of 0.2 to 0.5% (of course that means it could be down 0.4% during the actual session but thanks to the urgent buyer who shows up daily we still get flat). Sentiment gauges in many cases have returned to peak levels of late 2007, as the David Tepper thesis dominates  - either things will improve and the market will go up, or the government/central bank will step in and push the market up.  It is now universal that 2011 will be another steroid filled year of economic and market gains, and kicking the can down the road has become the national ethos.  Free markets rule.

One can only ask when does it matter when everyone is on the same trade, and everyone believes the same things.  With sellers on strike until 2011, and the urgent buyer showing up each morning to make sure everything remains in order, it does not appear to be a question for the remainder of this year.  Onward and upward we go as Santa Uncle Sam and Santa Bernanke combine to give us a market where sideways is the new down.

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