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The S&P 500 closed within a few points of all-time highs Thursday as the post-election rebound continues. We survived a lot of bearish headlines this year and no matter what the cynics claim, the market isn’t listening. While there is a chance we could kiss all-time highs and tumble back into the heart of the trading range, the more likely outcome is we will break out and continue higher.
The market enjoys humiliating the largest number of traders at any given juncture. Stumbling from here means patient bulls with piles of profits will give a small portion back. That doesn’t sound very humiliating to me. On the other hand, smashing all-time highs will send bears scrambling for cover. Shorts will be forced to cover and anyone out of the market will start second-guessing their decision as they watch everyone around them raking in profits. It’s pretty obvious which side has more to lose here.
We’ve been flirting with 2,200 for nearly half a year. The longer we hold near this level, the more likely it is we will break through. Unsustainable levels are by definition unsustainable. If we were going to crash in a hopeless ball of flames, it would have happened by now. This resilience tells us there is a lot of support behind these prices. If all of the headlines we encountered in 2016 couldn’t break this bull, it is really hard to imagine something coming along in the final weeks of the year that will break it. The smart money is clearly betting on this bull, not against it.
Right or wrong, when confident owners don’t sell, supply stays tight and prices remain firm. Bears can argue until they are blue in the face, but it all matters for naught if they cannot convince owners to sell. I’m not sure what 2017 holds, but things look good for the market going into year-end. Fight it at your peril.
S&P 500: Post-Election Rebound Continues
This message was edited by ferari on 21-Nov-2016 @ 3:58 AM
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05-May 2016 Thursday
9:29 AM (2907 days ago)
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