Shallow Hal: The Bull-Bear Debate
“Who knows how long this will last; now we’ve come so far, so fast.”
– Don Henley
Todd Harrison: I’m back in the saddle following an off-site yesterday—no, I wasn’t squatting for 24 tickets…yet—as the tape continued its march toward S&P 1360, which we targeted (through a pure technical lens) in December 2011.
The forward question is a simple one: Has the upside become too obvious (with the VXO again trading in the teens and the bulls coming out of the woodwork) or are fund managers so underinvested (after The Smartest Guys in the Room Screamed “GET OUT OF THE MARKET!”) that pullbacks will be Shallow Hal consistent with the path of maximum frustration?
A few points of Parliamentary procedure, in no particular order:
- European troubles haven’t gone away (by a long shot) but they have quieted down, and the successful debt auctions this week will scare some bears.
- The stateside economic backdrop has improved on the margin, with employment perking up into year-end. It’s a lagging indicator, we know, but it will serve as reactive rationalization for the bulls.
- The election is 10 months away; getting the troops home for Christmas was Act I in the re-election campaign. Sparking the market higher—or trying to, anyway—will be Act II (and yes, it’s easier said than done).\
Posted with permission of author by Wall Street Sector Selector
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