Today the Dow Jones Industrial Average closed at an all time high... go figure. When we were collapsing to new lows on March 2009, did you really think less than four years later we would be back and better than ever? Count President Obama as one who thought we'd be back. Only days before we bottomed in 2009 Obama said it was a great time to buy stocks. Obama the stock market prognosticator.
But really, better than ever? Yeah that's the problem, while somethings are better, others are far worse. We have record government assistance, record debt levels, record student loan delinquencies, record low interest rates, record high gas prices, and record highs on the DJIA. Most are baffled as to why/how this markets continues to go higher. The 100+ move in the DJIA today, and the record close, was fueled by positive news over seas and continued buoyancy in the markets. Since March 2009, when stocks bottomed, anyone trading the market for downside for any length of time has found themselves trying to drown a beach ball. The bears, if we can even call them that anymore, have been in hibernation far too long. They have been declawed, neutered, and busy watching Three's Company Reruns the last 4 years. Frankly I am getting worried. Perhaps at some point in the future they will awaken and pop that overly inflated beach ball, but until that time the bulls are having a blast.
Over a year ago in 2012, February 9th to be exact, I wrote an article about BTFD. In it I said:
"
who cares about “down the road”. Right now stocks are going higher and every dip must be bought, hence BTFD.
With the FED and its ZIRP until 2014, there is no sense fighting gravity.
Buy the F*cking DIP.
We trade what we see. Every day an hour in we see buying and why not buy there too. This Govt manipulated market is going higher and its either going to make us money or leave us behind. This will not end well, but there is zero sense fighting the trend. Just like QE1 and QE2, QE3 is going to lift the markets to new highs and surpass all-time highs. It won’t be because of a healthy economy and full employment. It will be due to the Fed inflating the final bubble. We want to be buying puts before it bursts, but that time is not now. Just BTFD --- link https://www.optionmillionaires.com/2012/btfd/
Like many out there I remain skeptical of this rally. As much as I dislike the FED for manipulating the markets higher, and screwing the savers and retirees out there, at this stage you can not argue with the results. Down the road at some point in the future we may look back and wonder what in the world they were thinking, but for now they've succeeded in doing what they can to try and jump start the economy. I give Ben and the FED credit for sticking to their guns. They are not being persuaded by public sentiment or the hawks on the hill. They are going to ride the S.S. QEInfinity to the Island of Prosperity, or watch it sink in an event that will change the world forever. That to me is the scary part. If all the QE's, TWISTS, TARPS, TALF's, over the last 4 years do not ultimately lead us to a better place, we are going to see a collapse that will turn the U.S. into Third World Country overnight.
However, if the global printing presses continue to kick the can down the road, papering over the cracks with fresh dollars, euros, and yen, we could be looking at another 20%-30% of gains in the next year and DOW 20K sooner than later. Don't fight someone with an unlimited bank account.