Michael Is Sincere

So you might want to listen to him.  Bull wiseguys, novices and cheerleaders see the S&P 500, Dow and confirming Tranny (has Richard Russell flipped yet?) show a bull market in stocks.  People who want to deny that cycles exist and that there are things (too many to list in a simple public post) degrading beneath the market’s surface still hold sway and rest comfortably (see VIX).

Michael Sincere has a bearish view of the stock market and lays out a well grounded case for it.  Usually when I see the bearish headlines in the MSM I think ‘uh oh, MSM’s on the job managing perceptions and that ain’t bearish’.  This article simply states its case, allows for new highs (5% upside vs. 20% is just good ‘risk vs. reward’ analysis, which is what I care about), which have been part of our plan (using the HUI’s pained 2010-2011 toppingprocess as one template).

Stocks are telling you a bear market is coming

Short-term, the market could churn higher. As prices rise, a lot of people will be fooled, especially if the Dow continues to make all-time highs. Many investors will not sell because they think they can either get out in time, or buy and hold through the next pullback or correction. The most aggressive investors will buy on the dip because stocks “are so cheap.” I’ve heard some financial commentators recommend that retail investors avoid a bear market by being “better stock pickers.” Ridiculous.

People who make calls are either amateurish, headline grabbing self-promoters or confirmed gurus operating on years of hubris.  See Russell, Richard.

So I appreciate this article as I would a well thought out bullish one that forces me to reconsider my own view that 2014 is going to bring some pretty big changes.  Michael may not be right, but he is Sincere and his argument well presented.