Friday, December 19, 2014

About Steps And Elevators

A common perception is that Mr Market often takes "the steps up and the elevator down" meaning that declines happen much faster than inclining prices. But in the last two pullbacks (October and the recent one), it isn't hard to notice the opposite was true. Yesterday we even saw +2% gains for major indices, which hasn't happened often in the last couple of years.

The dips are still bought, but sometimes it takes more effort to identify the exact bottom (for example the October pullback/correction). Yesterday it seemed everyone wanted to get in, fearing they would miss the rally (aka 'short squeeze'). We're back at the high of year, will this rally push us to fresh new highs before year end? It probably will.

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