Bascically the Market was not buying the bear story anymore today and I increased my equity exposure this morning to 90% net long. The data from Money Flow statistics shows that it is flowing into stocks and has been the result of a shift out of money markets, indicating that fund managers are reducing their cash percentages and getting long stocks, most likely rightly or wrongly in anticipation of the Fed being done. The weakness over the past week, then is likely the result of rethinking on when the Fed will be done.I remind that there's not been any new economic data in recent weeks that's indicated we're any more exposed to inflation risk than we have been for the past say six months. So the sudden shift toward a more negative sentiment seems to me to be off base and unwarranted, nothing more than the usual gyration from one irrationality to the next.The number of bearish comments from blog readers has increased recently paralleling the overreactive media's lack of independent thinking. As much as I always look on both sides of the argument and always find reasons to be bearish I have to conclude after todays action that everything is in place for another 200 point rally or squeeze or short covering or whatever you label it but this market had every reason and chance to sell-off in the last 4 weeks and we are still only a couple percentage points away from all-time highs . Again 1315/20 was my target last week and nothing has changed for nex tweek -- 1294.00 and above means another breakout for the S&P's (june). Reading some other good "contrary indicators" like" BillCara" and "The Kirk Report" again it shows how many "investors" are sitting on the sideline or keep drumming the bearish argument - without being short I might add !
This post first appeared on The Speculator - "rock Solid / Market Wise", please read the originial post: here
