The World Is Bullish, And Here’s What Frightens Me About This

I don’t have an exact number but I believe at least 80%-90% of stocks are now
above 50-day averages. Many of them are extended above that average. Stocks
almost always revert back to their moving averages…meaning a right turn or a
pullback should happen.

I am starting to see the first signs of momentum being lost. This in itself is
not the end of the world, but you must keep in back of your mind of what has
happened on the pullbacks in the last three years…simply put, markets were
crushed. I am in no way saying that will happen here, but someone has to be the
voice of caution.

That leads me to my next point. THIS MARKET HAS NO CAUTION
AND EVERYTHING I AM SEEING AND HEARING HAS NO CAUTION. In other words, in
just over 7 weeks off of a 6-year low on the NYSE, the world is bullish. What do
I mean by that?

Front cover of Barron’s entitled “THE BULL IS BACK!” Notice
that there was an exclamation point, not a question mark.

CNBC did a special entitled “Back from the brink!” They actually
interviewed the fund manager of Munder Net-Net Fund…because the fund is up
over 20% this year. Never mind it is down 90% in 3 years. Shameless and
sickening that they would bring him on.

The percent of bullish advisors just hit 55.8%…the highest number in years.
Bears are down to 24%. Let’s put this into context. This number is hit only 7
weeks off of a 6 year low. It is also interesting that Investors Business
Daily, in today’s paper, gave this indicator a less-than-stellar thumb’s up
in spite of how well it has worked at extremes.

The VIX,VXN,QQV are waaaaaay down in complacent territory.

$1 stocks…as Maria Bartiromo would say…”are on fire!” I do not
believe speculation is healthy this early in a so-called new bull market.

Lastly, I have heard the words “bull market” used with
uncharacteristic swagger from many people in the last few days…more so than
any time in the last 3 years.

Add in the fact that the market has had a good run and is overbought and I am
now starting to believe it is time to take the foot off the pedal.