The talking heads are saying that investors are encouraged by the pace of merger activity. Others are saying it’s because the economy is improving. In other words, they haven’t a clue why the markets are moving up.
I think it’s just momentum. People are seeing that markets are going up and those who have missed the boat are buying any little two-hour pullback.
Of course, at the root of all this is the Fed which keeps printing money in the mistaken notion that there is no inflation. Don’t tell that to middle-class and lower-middle-class grocery shoppers.
It’s been a long time since I’ve seen 5 day RSI at 93. And, there is incredible bullishness among option traders. Yet, the ultimate indicator, price, is still positive.
All you have to do is look at the chart.
We are long-term bullish for all major world markets, including those of the U.S., Britain, Canada, Germany, France and Japan.
Stephen Todd, Todd Market Forecast, www.toddmarketforecast.com, 909-338-8354, June 9, 2014
