Wednesday, December 12, 2007

Keeping The Secular Trends In Perspective

I know it is easy to fall into the sky is falling camp as we are surrounded by all of the doom
and gloom of the sub prime fiasco and also the potential of the credit markets freezing.

These are legitimate concerns for sure, however they do seem to be overstated and used at every turn in the road.

Keep in mind that the truly big money is made hand over fist buying when the panic button has been hit over and over and over and there is blood running on the streets. Not every sector meets these criteria, but there sure are some excellent quality financial issues that are selling at simply ridiculous prices that have been gravely overdone to the downside.

I have also attached a long term chart of the trend in Put/Call ratios and as you can see, there certainly is no rampant speculation on the bullish side. If anything, the Tech Meltdown remains fresh in most investors minds and they simply are waiting for the other shoe to drop and stock prices to follow.

This is also not the only sentiment figure that is giving bullish indications.
If this economy were about to go into a meltdown phase and stock prices with it then I would highly doubt you would see the smart money, the big boys, the commercial traders or whatever else you wish to call them in a very jovial buying mood.

With that being said, we may have some short term hurdles to overcome here, but the long term remains firmly bullish!

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