Market Sentiment: "The consensus is for good, solid economic growth worldwide"

Another sign of overbullishness and excessive speculation is oil, which is now close to $100 a baril and is at a 27 month high.

Note that the report writer as well as all the speculators and pundits are confusing self-sustaining price increases (higher prices bringing in new speculators who then push prices higher) with economic recovery.

Also worth noting is the fact that the consensus is for good, solid economic growth worldwide, particularly in China and India. Now, if you remember Bob Farrell's market rules, here's the number 9: When all the experts and forecasts agree – something else is going to happen...


Now just imagine that the consensus is solid economic growth, and that is worldwide. Imagine when the markets sober up and realize that there are no recoveries, nowhere and bubbles start to pop. What will happen then?

Jan. 17 (Bloomberg) -- Hedge funds raised bullish bets on oil by the most in five weeks as crude reached the highest level in more than two years amid signs that the global economic recovery is gaining momentum.
[...]
“The consensus is for good, solid economic growth worldwide, particularly in China and India, which are big commodity consumers,” said Kyle Cooper, director of research at IAF Advisors in Houston. “That’s driving appetite for a lot of investment in commodities like crude and copper, the building blocks of the world economy.”

Moreover, the appetite is not for investment but for speculation. Very different things...