Thanksgiving Means The Bulls Should Be Thanking Their Lucky Stars That The Bears Have Gone Hibernating

My bullish stance on equities is slowly but surely being vindicated. It seems the bears have burrowed in somewhere to hibernate (until March 2006, to be consistent with what I wrote yesterday), while the bulls are gently taking this market higher. My 'better than 50/50 chance posting' elicited quite a few pleasant private commentaries about my giving too much of a chance to Brazil winning the World Cup, but almost no one is disagreeing with my SPX directional comments. That worries the contrarian in me. I'd much prefer it if people were giving me stick for my market direction opinion than for my football stance. So, for all of you European and English football fanatics out there, you heard it here first: yes, Brazil will indeed become the first South-American football team to win the World Cup in Europe, despite what all those useless statistics say. One can argue with history, but one can't argue with pure, unadulterated, raw talent: Robinho+Ronaldinho+Ronaldo+Kaka+Adriano = 2006 World Cup Victory. You can let it go now.

Two weeks ago, I wrote about herd behavior in the oil and euro/$ markets. Just like I said that one shouldn't be selling oil ONLY because of the "mild weather", now one shouldn't be buying it either ONLY because of the (forthcoming in the NorthEastern United States) "cold weather". Please get a grip and find yourself a *non-weather* reason why you like or dislike oil and stick with it. No significant amount of money can ever be made following the herd, especially when that herd is making the most noise -- for example, as it seems to be the case with the very clamorous (and sometimes glamorous) bullish/long $ herd. The truth of the matter is that, while all that noise 'about how the $ is just going to kick every major currency's butt out there' has been going on -- the euro has either been stable or actually rallied slightly in the last two weeks, since I started counting the daily bullish $ headlines in the WSJ (which every FX honcho and his brother seems to be reading and quoting these days). If I were a $ bull, I'd be making lots of noise as well -- and taking profits when no one's looking, and that's exactly what seems to be happening by the looks of it.

I would expect a small retracement in the SPX before we can resume our course higher, given that the market has gone from overbought to super-overbought territory (1,261 was the actual SPX index close today) during this pagan-holiday week. If no retracement to, say, the 1238-1235 area happens soon, then I think it might be safe to holler "ladies and gentlemen, please buckle up your seatbelts and enjoy the ride!", and I might just have to update that 'better than 50/50 chance' posting with something like the 80/20 rule, which might prove to be a more aggressive but fairer reflection of reality...