HAPPY HOLIDAYS TO ALL AND LOOKING FORWARD

I am going to continue to tell it like it is on the fundamental backdrop, but am also going to devote some time on uncovering opportunities that I see IMHO. WE can be bullish and cautious, we can be bearish and long.

We MAY have seen GENERATIONAL LOWS in March 2009, prices SO LOW most didn't want to touch them, VIX so high of near records in fear, stuff lows are made of. According to DOW THEORY however, if still relevant, not PE ratios NORE dividende yields did that bottom make....so that would lead to a retest and a NEW SECULAR BULL when PE ratios fall to single digits and DIV yields to near 6%....that is how 1980 got formed.

This market currently is almost 100% momentum driven, with as Dr John Hussman observed unfavorable valuations. It is a market that has been propped up and manipulated with FED currency funneled to the largest players that went directly and used specifically for raising asset prices, Bernanke has come out in PUBLIC and said as much, hadn't understood that was the FED MANDATE by law.

Currently we have reached a DEC that has been about 4X better than historic avg...frothy anyone?

Bullish polls have reached or exceeded 2007 toppish extremes, in VERY short order from bottom, as if that never heappened. BARON's rounstable and other analyst polls are unanamous bullish for 2011, you have 3rd year Pres cycle MOST are aware of, QE 2 and goodness knows 3 and 4 or QE 5....bottomsless pit.

But as FED funds lay at ZERO % for 2 plus years, it is evident the PATIENT cannot stand on own 2 feet, withdrawing artificial support would kill the bull IMHO.....but players feel that cannot happen.

30 years of a bond bull, could go further but pigs get slaughtered.....worried about danger there and in Munis.

Historic demand for debt issued......yields usually rise to tempt buyers, reward for risk.....rates are much higher than when QE 2 began.

Wall of worry is all but a distant memory.

I think the table is finally set for a significant retracement of the gains....that's my call to play out into early 2011, only strength and determination of decline and levels thereof will help us figure of that DIP gets bought.

happy holidays, thanks for reading my blog I hope it has and will continue to be helpful

D