I don't think I remember a period in the last 12 years I have been exposed to the markets that so many "learned" people have chosen to sit on the fence instead of caling it one way or the other.
The market soothsayers are basically split with 80% of the general market population without a firm view and the remaining 20% split evenly between 1500 SPX and 500 SPX.
Economists are the bearish ones, and analysts are the bullish ones. The quants will lean to the economists, without being overly bearish, and the brokers/traders will lean to the analysts (because they are paid to), and everyone else is scratching their tummy, and looking towards the moon, stars and sun, funny squiggly lines and television to obtain some form of concrete view.
In short, the market is literally in a situation where it cannot move one way or the other, because the weight of money that usually drives it in a solid direction is literally confused.
This is particularly a dangerous time to have a strong view on the market, because it makes you do stupid things. You may think the charts look good for a rally, after testing resistance levels 4-5-6 times in the past few weeks, and yet something could come out of left field to change the general consensus from 80-10-10 to 90% bearish and 10% margin called.
Or the whole investment community could just decide to put all the worries on hold, and hold a six month rampage to drive everything through the roof, to harvest one collective massive bonus payout before the whole community decides to retire and move to Goa, Macau, Ibiza or any other hedge fund/stockbroker retirement haven.
For small players like us (and I don't care how much money you have in the market, if you haven't got the ability to close an index in the last 10 seconds where you want it to close, you're small), we stand very little chance in picking general directions at the moment, and the most we can hope for is short term scalping - which essentially requires focus, discipline and time infront of the screen (of which I'm sad to say I have none).
48 hours ago, I convinced myself the market was going to freefall, after failing to break through 1100 in the last push, only to see it turn around from 1050 and surge to 1090 in one session. And just as it was looking like it was going to go through, we had Big Ben pour cold water (which really is a dumb excuse to sell, I mean who seriously believes the economy is on the right track?)
Toss a coin at this stage folks, but in my mind - The economy HAS to have some input to the markets at some point, and I cannot for the life of me see how sustainable all this liquidity-injected growth is. Basically the world has incurred MORE debt, to get out of debt...and that's never good, whether you are running a newsagent, or you are managing a multi trillion dollar economy.
Trade deficit for the US hit 42b last month, and here in Australia, Swann managed to find another 5b in his ammended 2013 budget after a revised resource tax from "expected growth of companies, who will pay more taxes". Who the hell is he kidding, they stimulated that rate of growth from 2008 till now from going into deficit, and he expects the economy to sustain itself into continuous growth to pay his bill?
Fool, money in one sentence is my answer.
And what's going to happen to the Chinese when their goods suddenly become expensive compared to everywhere else (with yuan being revalued)? You would have to count on the Chinese to come up with new ways of cutting costs (perhaps workers could share a bed, instead of single beds each).
(20min delay)