Rydex

There are over 4 times as many leveraged bulls as leveraged bears.

We are wondering if and when these signals will have significance.

I am not sure what to make of this tidbit of information, but it does point out how silly and fickle investors have become.

Who or what is going to "save" the markets from a long overdue correction? And what will be that catalyst?

Add extreme selling by corporate insiders to last week's list of worries.

The problem with this market is that it can't seem to sell off enough to produce a sustainable rally. There are not enough bears or bulls.

Why ever sell? Such is our markets where investors have been conditioned that they will not experience the pain of deep (any?) losses for any length of time.

After all in this singular issue world of ours, the only thing holding the market back is the fiscal cliff and Washington's inability to deal with it.

By blaming this week's sell off on the coming fiscal cliff is another belief by market participants that Washington can fix our economy and our markets.

No wonder mom and pop investor are soured on Wall Street. Just when "they" tell you it's a can't miss market, well the market stumbles.

The markets are all about timing. In this case, 55 weeks.

It's like we are in a vacuum, and the silence is palpable as the bulls hope that the announcement of QE3 hasn't become a bull trap.

The repudiation by the markets of Federal Reserve policy is almost complete.

It is always amazing to observe how people become less risk averse after risk has markedly increased and more risk averse after it has markedly decreased. The stock market is held to be 'safe' after it has risen for many weeks or months, while it is considered 'risky' after it has declined. The bigger the rally, the safer the waters are deemed to be, and the opposite holds for declines. One term that is associated in peoples' minds with rising prices is 'certainty'. For some reason, rising prices are held to indicate a more 'certain' future, which one can look forward to with more 'confidence'. 'Uncertainty' by contrast is associated with downside volatility in stocks. In reality, the future is always uncertain. Most people seem to regard accidental participation in a bull market cycle with as a kind of guarantee of a bright future, when all that really happened is that they got temporarily lucky. Perma-bullish analysts like Laszlo Birinyi or Abby Joseph Cohen can be sure that they will be right 66% of the time by simply staying bullish no matter what happens. This utter disregard of the risk-reward equation can occasionally lead to costly experiences for their followers when the markets decline.

The best gains are behind us especially in the wake of the Fed's vacuum and the lack of any meaningful and sustainable upside catalysts.