In life, one need to have open minds, listen to both sides of the stories. Then ask for Solomon wisdom to weigh and make a final decision. We can always view a glass either half full or half empty .
By now, enough has been said about bearish case, let's listen to a bullish case:-
1) The short-sell zone is getting more and more congested, the trading ratio of put option exceeded call volume on rising scale, taking a contrarian view, don't continue to follow the crowd.
2) If things are so bad, why insiders are buying? Insiders buying vs selling, exceeded 1.44 times which was the highest in 13 years.
3) The worldwide economy growth has not tanked even with persistent high crude oil price for a while. This reflects the fundamental of world economy is strong, impliying decoupling theory is holding up well.
4) US Mutual funds redemptions have not been persisted after the sold-off in October 2007. November equities fund outflow was 9.9 B but there was a + 1.2B inflows in December 2007. This suggest, downside could be limited.
5) Warren Buffet has been buying stocks gradually like Wells Fargo,Kraft, etc strengthening the argument of downside is limited. Some say Buffet buying into food inflation sensitive stocks signal soft commodity boom is almost peak. Inflation threat will ease. This will spark growth down the road.
6) S & P stock yield is 6% beating short and long-term bonds yield.
7) Months of persistent selling should have already discounted almost all bad news and US recession.
A word of caution, many of the views are from people plan for long term holding, sitting on big pile of cash. Short term for them is 1 -2 years, long-term is 5 - 10 years. This may not be applicable to day-trader or short-term trader. Short-term is less than 8 hours, long term is less than 1 month?
By now, enough has been said about bearish case, let's listen to a bullish case:-
1) The short-sell zone is getting more and more congested, the trading ratio of put option exceeded call volume on rising scale, taking a contrarian view, don't continue to follow the crowd.
2) If things are so bad, why insiders are buying? Insiders buying vs selling, exceeded 1.44 times which was the highest in 13 years.
3) The worldwide economy growth has not tanked even with persistent high crude oil price for a while. This reflects the fundamental of world economy is strong, impliying decoupling theory is holding up well.
4) US Mutual funds redemptions have not been persisted after the sold-off in October 2007. November equities fund outflow was 9.9 B but there was a + 1.2B inflows in December 2007. This suggest, downside could be limited.
5) Warren Buffet has been buying stocks gradually like Wells Fargo,Kraft, etc strengthening the argument of downside is limited. Some say Buffet buying into food inflation sensitive stocks signal soft commodity boom is almost peak. Inflation threat will ease. This will spark growth down the road.
6) S & P stock yield is 6% beating short and long-term bonds yield.
7) Months of persistent selling should have already discounted almost all bad news and US recession.
A word of caution, many of the views are from people plan for long term holding, sitting on big pile of cash. Short term for them is 1 -2 years, long-term is 5 - 10 years. This may not be applicable to day-trader or short-term trader. Short-term is less than 8 hours, long term is less than 1 month?
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