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What Could Go Wrong Here?

Tyler Durden's picture


We wondered previously what happens when there are no more greater fools to sell to? But, US investors have turned the euphoria dial to 11 this week as the percent bullish is the highest since the peak in Fall 2007 and bears are at their lowest percentage since Spring 1987. Thus, the Bull-bear spread (based on AAII's survey) has never been wider (and don't forget, even Cliff Asness knows the unbridled idiocy of the 'money-on-the-sidelines'-meme).


And remember, we don't need to worry about record high margin debt as along as stocks keep going up...

As - over the long-term - the bull-bear spread has never been wider (by a long way)...


h/t @Not_Jim_Cramer


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Thu, 12/26/2013 - 14:01 | Link to Comment Al Huxley
Al Huxley's picture

I'm sure the bulls have at least into the week after new year to relax and enjoy the party.  And even then, this looks like it's setting up to be a parabolic blow-off top, probably have to get REALLY stupid before it rolls over.  That seems to be a side effect of the FI takeover - everything gets pushed to greater extremes now.

Thu, 12/26/2013 - 14:09 | Link to Comment Headbanger
Headbanger's picture

Yep, the stupidity index has reached ludicrous speed and gone plaid now!  Than there's this little issue:

Thu, 12/26/2013 - 14:11 | Link to Comment Al Huxley
Al Huxley's picture

Apparently the economy is SO strong now, and the deficit is SO under control, that the market can (for the first time in history) tolerate rising interest rates and still go vertical.

Thu, 12/26/2013 - 14:26 | Link to Comment Dr. Engali
Dr. Engali's picture

This ...ahem....."market" has tolerated more shit in the past four years and not flinched than I have witnessed in my lifetime.

Thu, 12/26/2013 - 14:53 | Link to Comment Al Huxley
Al Huxley's picture

Yeah, new records in bullshit excuses used by the FIs and their MSM bootlickers to explain the unexplainable and justify the unjustifiable.  Lucky for them there's no concept of memory in society anymore, because otherwise they'd all wind up looking pretty fucking stupid when this all comes apart.

Thu, 12/26/2013 - 15:10 | Link to Comment DaddyO
DaddyO's picture

Even the Bulls know something is amiss...

Happy New Year to the fools on Wall Street, oh and all the ZeroHedgers as well!

The view looks pretty good from my front porch, Chickens-check, producing Garden-check, Au,Ag,Cu-Pb-Check, clean water-Check, hay burning Transportation-Check.

2014 may prove to be the most eventful year in my lifetime.


Thu, 12/26/2013 - 16:01 | Link to Comment negative rates
negative rates's picture

Perhaps you should be thinking more along the lines of what has gone right here, directionals.

Thu, 12/26/2013 - 16:00 | Link to Comment linniepar
linniepar's picture

"Wall st advisor." Aka professional thief. +1on your setup. Hell, in a perfect America our gov would encourage gun ownership and give tax breaks to those who do and to the defenders of the constitution.  


A man can dream...

Thu, 12/26/2013 - 14:14 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

Looks like we kissed the Line of Death® this morning. Janet Yellen, please pick up the white courtesy phone!

Thu, 12/26/2013 - 14:26 | Link to Comment Headbanger
Headbanger's picture

Me thinks the 3.00 "Line of Death®" will be crossed today but will not be noticed until after the New Year.


Thu, 12/26/2013 - 14:11 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

Martin Armstrong claims that the Dow has a lot further to run upwards because the retail investor is still not in the market. Plus he says that there is still a lot of stock to be bought on margin.

I'm a big Martin Armstrong fan. It's hard for me to see his point of view, but then again, I'm generally wrong about everything when it comes to the markets. 

Thu, 12/26/2013 - 15:11 | Link to Comment DaddyO
DaddyO's picture

I've never been able to get my noodle around MA and his view of things.

He's had some good things to say, although a lot of his sage advice has proved difficult to make sense of over the long haul.


Thu, 12/26/2013 - 15:18 | Link to Comment TrustWho
TrustWho's picture

Wall Street bulls have not finished until retail traders are in peak rape mode. Of course The Fed is chief rapist!!!!

The meltup over the holidays demonstrates the settings on the algos.

Fuch Bernanke!!!!!!!

Thu, 12/26/2013 - 14:21 | Link to Comment ZH Snob
ZH Snob's picture

greed knows no bounds.

what makes everyone think they'll have time to exit?  have they no idea they can lose 30% or more in a stampede?  it will be worse than trying to get out of a burning theater.

Thu, 12/26/2013 - 14:40 | Link to Comment stocktivity
stocktivity's picture

Dow up another 100 - It's all Bullshit!!!

Thu, 12/26/2013 - 14:56 | Link to Comment Jumbotron
Jumbotron's picture

That sudden spike up in the end came from Hugh Hendry throwing up his hands and saying fuck it....I'm all in.

Thu, 12/26/2013 - 15:23 | Link to Comment CarrierWave
CarrierWave's picture

I once read that a Galaxy is on a collision path with our Milky Way. Further read revealed that the event is some 2 Billion years away.

Likewise, ZH is a wonderful read, but never use it to make your Investing decisions.

Extreme readings on this chart or that sentiment last longer than any of us can predict while markets keep marching higher.

Not following the trend - with proper protective Stop Loss - only makes for lost investing opportunities.


Thu, 12/26/2013 - 19:39 | Link to Comment epicurious
epicurious's picture

Wow you are so wrong about that.  Just as example last October as Apple was peaking at exactly $707.  I read on this web site an article which pointed out the absurdity of that valuation.  I agreed and promptly paced a few puts for a few months out and made 300% in a matter of 6 weeks.  Other opportunities to view things from an honest vantage point frequently keep me a reader.

Thu, 12/26/2013 - 14:04 | Link to Comment El Vaquero
El Vaquero's picture

I sometimes am still taken aback at how so many people can be so stupid.  Either this thing goes to the moon in nominal terms but becomes completely worthless in real terms, or a ton of people are going to get a massive bitchslap because they think they can time this when they cannot.


Unless you're a player who can rig the game, the only winning move is not to play. 

Thu, 12/26/2013 - 14:27 | Link to Comment moonshadow
moonshadow's picture

a strange game...

Thu, 12/26/2013 - 14:05 | Link to Comment fooshorter
fooshorter's picture

This data is meaingless. No retailer is buying other then obvious dumb money. Volume has been down for months. Smart money and insiders has been exiting in droves. The Fed POMO is the only catalyst. Hedge Accordingly.

Thu, 12/26/2013 - 14:44 | Link to Comment mvsjcl
mvsjcl's picture

Unless they come up with a chart which shows how meaningless charts have become, I'm not looking at any charts.

Thu, 12/26/2013 - 14:06 | Link to Comment Dr. Engali
Dr. Engali's picture

Wallstreet could start recommending we all buy beans, bullets, and band aids:



As usual Wallstreet is a  little late on it's recommendation.

Thu, 12/26/2013 - 14:11 | Link to Comment Callz d Ballz
Callz d Ballz's picture

Yeah, they obviously haven't been shopping for bullets lately...good luck with that!

Thu, 12/26/2013 - 14:17 | Link to Comment Dr. Engali
Dr. Engali's picture

There is ammo out there. You just need to know where to look.

Thu, 12/26/2013 - 14:24 | Link to Comment Callz d Ballz
Callz d Ballz's picture

Agreed, just don't freak on the

Thu, 12/26/2013 - 15:19 | Link to Comment The Wisp
The Wisp's picture

Hey Obama, Kiss My Re Loader...

Thu, 12/26/2013 - 14:33 | Link to Comment PTR
PTR's picture

A gentle reminder for those that haven't read Dmitri Orlov's writings yet:

Makes for good mental preparation and understanding.

Thu, 12/26/2013 - 14:08 | Link to Comment Bay of Pigs
Bay of Pigs's picture

#WINNING. I'm sure "Cannonball" Yellin will have your back too.

Gold sentiment and miners near all time lows for you contrarians (if there are any left).

Thu, 12/26/2013 - 14:07 | Link to Comment Yen Cross
Yen Cross's picture

  S&P 500 PE Ratio  

  No comment needed.

Thu, 12/26/2013 - 14:40 | Link to Comment bdub2
bdub2's picture

thx for link. 

looked at S/P Book Value Per Share. Highest ever, by far. (graph goes back to Dec. 99)

I've tried to put into words, the extreme idiocy, saying the "S/P CD, Fed Insured," etc. and so forth. But I'm convinced, no words can convey the extent to which this market will rally. It will continue beyond...words.

The "until it doesn't" meme is bs. "until they lose control of the bond market" is bs. "when rates rise to over 3, 4, 5 it's all over." is bs.

It is all bs forever. S/P to 5k. Is the only truth anymore in Oceania.

Thu, 12/26/2013 - 14:18 | Link to Comment Haager
Haager's picture

Did Cramer already announced the undestructible bull-market and did he shout to go long or be dead? No?

Thu, 12/26/2013 - 14:22 | Link to Comment Gandalf6900
Gandalf6900's picture

Needless to say 2014 is the year of the perfect storm

Gold, Bitcoin and LifeStraw


Thu, 12/26/2013 - 14:32 | Link to Comment q99x2
q99x2's picture

Right. As if anyone believes the market indexes are based on fundamentals.

Been a while since Bull/Bear stats meant anything.

But the old stat snow jobs still bring money to those that sell them.

Dude the United States of America has been taken over by a criminal group of bankers. They need people to believe that the old fininacial system is still the way things work. The more people that believe in their old Harvard economic theory bullshit the less chance they have of bein arrested and taken into custody.

That is what is important to know.

Thu, 12/26/2013 - 14:33 | Link to Comment cowdiddly
cowdiddly's picture

One stock sums up this retard maket

TWTR- 73 dollars and change with a 40 Billion, with a B, market cap that produces nothing, is losing money and has never made a profit.

And I thought the idiots that bought into the dot. com bubble were braindead lol.

Stupidity has reached a whole new level.

"Only two things are infinite. The universe and human stupiity. And, I am not sure about the former."  Albert Einstein

Thu, 12/26/2013 - 14:31 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Even the brain dead paper humping traders on the BlowHorn were having trouble defending that share price this morning.

Crack Up Booms never end well.

Thu, 12/26/2013 - 14:35 | Link to Comment BullyBearish
BullyBearish's picture

The only thing you have to be cognizant of is: "Animal Spirits At Any Cost!!"  This thing will continue to run until it doesn't...old rules DO NOT apply.

Thu, 12/26/2013 - 14:38 | Link to Comment indio007
indio007's picture

This isn't going to end well.

Thu, 12/26/2013 - 14:46 | Link to Comment orangegeek
orangegeek's picture

Another day, another negative macro.


Dow Jones up over 100 so far today.


Print MOAR DOH, watch markets rise - weeeeeeeee!!!!!!


Fuck revenue.  Fuck profit - both irrelevant.

Thu, 12/26/2013 - 18:27 | Link to Comment DaddyO
DaddyO's picture

Fuck revenue.  Fuck profit - both irrelevant

til they aren't...


Thu, 12/26/2013 - 14:56 | Link to Comment HUGE_Gamma
HUGE_Gamma's picture

"Retail Investors" do not push the market.. Joe Idiot with 20k in Etrade means nothing compared to idiot fund managers with hundreds of millions

Thu, 12/26/2013 - 14:58 | Link to Comment ChaosEquilibrium
ChaosEquilibrium's picture

BINGO--True, 'Retail--ALWAYS gets PULLED DOWN with the market!

Thu, 12/26/2013 - 15:14 | Link to Comment edookati
edookati's picture

Nothing...everything will be alright as long as we keep printing money. Actually, I feel much better with everyone around me feeling better.

What??? Did you just say that market is going to crash in next couple of months...? Don't worry, it is different this time.

Thu, 12/26/2013 - 15:31 | Link to Comment thismarketisrigged
thismarketisrigged's picture

soon a 100 pt bounce on the dow will be equivlant to a 1 point gain on an index trading at 13,000, meaningless.


100 pts used to be a decent move, now its like nothing in this phony market.


twtr at 73, i just fell off my chair dying of laughter.

Thu, 12/26/2013 - 16:21 | Link to Comment TheRideNeverEnds
TheRideNeverEnds's picture

The only thing that can go wrong is the 15% of investors who are bearish miss the end of the year push over 1850 and probably the JAN move past 1900 on our way to close out 2014 over 2500.


Just close your eyes and buy em, this time is different...

Thu, 12/26/2013 - 16:31 | Link to Comment CMT1006
CMT1006's picture

My assumption is we continue higher until May (seasonality).  You should see the breadth and sentiment diverge as SPX moves higher.  The canary in the coal mine right now is REITs!!!

Thu, 12/26/2013 - 22:30 | Link to Comment Zero guest
Zero guest's picture

And the utilities.

Thu, 12/26/2013 - 17:24 | Link to Comment NoWayJose
NoWayJose's picture

The problem is that the free money Fed has created an endless supply of fools that are willing to buy higher, even if they need to borrow or leverage up in order to buy. That situation works -- until it doesn't.

Thu, 12/26/2013 - 22:08 | Link to Comment novictim
novictim's picture

The stock market is an indicator of trouble...but it is NOT the fundamental problem.  

Where does the money flooding into foolish/risky investments come from?  

How is it that the vast number of Americans (and vast numbers of the middle class all over the world) are BROKE...more broke than their parents generation ever was?  

How is it that 40 years of stagnant and declining wages have gone essentially unchallenged...and most importantly---> what is the end game to this pattern?

Zerohedge, those rolling the dice right now are (directly or indirectly) gambling with what should have been your raise, your vacation, your child's college fund, your own ticket to a dignified retirement.  But even if they were not gambling YOU still would never see that money.

The shift of wealth from the middleclass to the wealthy has set a feed back loop of ever declining consumer spending and wealth transfer from the poor to the rich.  The problem is that this ends with abruptness and violence and there is no stopping the mayhem if the Government fails to redistribute the money back to the poor.




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