Bold or Cautious?


I love when a media outlet accidentally presents two opposite opinions near each other. Its even more amusing when I’m in agreement with both of them!

Its a function of timeline; Its not inconsistent to both recognize the momentum strength of the present primary trend (which should take markets higher). Simultaneously, I anticipate a possible topping out later this year (2nd half?), with a real potential for making a brand new low from there.

Here’s the two pieces from CBS Marketwatch:

Richard Band’s fit of boldness
“BUY WITH BOTH HANDS! We’re facing what is likely to be the best buying opportunity of 2004…Today’s horrible terrorist bombing in Madrid… has spooked investors worldwide. In my experience, incidents like this nearly always occur at, or very close to, significant market bottoms.”

“The market should establish a firm bottom in the area of yesterday’s lows, maybe 1 percent-3 percent lower. Then we’ll be off to the races again… Tonight, recognizing the bargains out there, we’re raising the stock allocation in our model portfolio to 70 percent.”


Echo bubble on its last legs?
“After a spectacular rise in the S&P 500, signs of a major market top are rapidly falling into place. While many have heralded the rally as the emergence of a new bull market, history indicates that such large reactions are part and parcel of secular bear markets.

Nobel Laureate Vernon Smith coined the term “echo bubble” to describe such typical post-bubble activity. When a market bubble bursts, it is generally followed by a secondary bubble, an “echo bubble” — during which market psychology matches the extremes of sentiment displayed in the first bubble.”

via CBS Marketwatch

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