Still Way To Much Bullishness For This Market to Bottom

I would prefer if a small relief rally would happen, but unfortunately, there's still way too much bullishness in this market for it to bottom here. See for yourself:

The VIX index has risen to about 30. That's not bad, but far from the usual 40-45 reading that bottom bring (and 80-90 in 2008!).

The Euro is still soaring against the USD while the Eurozone is literally imploding.

Too many people are pretending to be contrarians and calling to buy this panic, while the other half are seeing buying opportunity into this inconsequent decline.

LinkedIn, the epitome of euphoria and speculation, is trading at about $100 and a PER of 1,500.

Bloomberg reports that Strategists Sticking With 17% S&P 500 Gain on Higher Profit
Aug. 5 (Bloomberg) -- Wall Street has never been more sure that the Standard & Poor’s 500 Index will rally in 2011, even after speculation the U.S. economy is heading for a recession prompted the biggest plunge since the bull market began.

Chief strategists at 13 banks from Barclays Plc to UBS AG see the benchmark measure of American equity surging 17 percent through Dec. 31, the average estimate in a Bloomberg survey. Their projection that the index will reach 1,401 hasn’t budged in four weeks, while mounting concern U.S. growth is slowing drove the SP 500 down 11 percent since July 22, including yesterday’s 4.8 percent tumble.

About $1.8 trillion has been erased from American equities as reports on manufacturing and consumer spending showed the world’s largest economy is slowing. Forecasters at UBS and Deutsche Bank AG say rising profits mean the SP 500 deserves a higher price-earnings ratio than the 28-month low reached yesterday. A year ago, strategists also remained bullish after a 14 percent drop, and proved prescient as the SP 500 rallied 20 percent from its August low.

“I’m reluctant to overreact to some shorter-term weakness, no matter how real it is, because the market has proven to be unbelievably resilient,” Jonathan Golub, the chief U.S. market strategist at UBS in New York, said in an Aug. 3 phone interview. “If you would have been acting that way for the last two years, you would have gotten killed by this market. Companies have done an absurdly good job of managing through this environment.”
In the meantime, what were we hearing just 3-4 days ago?
2011-08-03 — VIX Suggests the Time to Buy Is Now:

The VIX is an index that tracks market volatility, and it actually should be named the “Fear Index." I have been writing that this index would go as high as 30, however as I write, the index is pushing 25 and stands at 24.79.
Was I wrong? Absolutely not! Why not? Because no one can look over the horizon and foresee the future without looking at many more market indicators.

My regular readers know that I expected a violent spike down this summer in the markets. I figured the SP would go down well below its 200-day moving average, causing the SP VIX to rise above 30; that did not happen. Instead of spiking down, the market has, for the last six long months, ground sideways. And it never did fall below its 200 DMA. As this progressed very slowly during those months, the market started to catch up to the 200 DMA. As of yesterday, it has finally broken through the 1285 level of support of the SP and closed at 1254. This alone indicates that it's buying time! [...]

Now let’s get to the VIX. Last week, the VIX shot up to 26.2, which was the highest fear level since March when the tsunami and nuclear disaster occurred in Japan. But yesterday it closed back down to 24.79, indicating that the fear level is very close to having rebalanced. Again, this suggests it's time to buy. Consequently, I am not waiting for it to go to 30+.
In conclusion, I believe that this is the buying opportunity we've been waiting for, and I advise that you slowly deploy capital that you've been hoarding. Look for high-yielding safe stock; and if and when gold and silver pull back, buy in. Right now, gold and silver are the safest port in the storm.
The quote highlighted above is just another way of saying "I'm bullish because the market has proven to be resilient". There's too much confidence, way too much. VIX at 25 would rebalance fear? What a foolish statement.

Birinyi, Biggs Advise Holding Stocks After S&P 500’s Decline
Aug. 3 (Bloomberg) -- The seven-day slide that wiped out the 2011 gain in the Standard & Poor’s 500 Index is no reason to sell stocks, according to investors including Laszlo Birinyi and Barton Biggs.
Biggs, managing partner and co-founder of Traxis Partners LP, said U.S. stocks have become a “strong buy.” [...]

“It’s like all these times when you second-guess yourself, and you probably wake up a little earlier than you’re used to, and maybe you put an extra finger of scotch in the glass,” said Birinyi, 67, one of the first investors to recommend buying when the bull market began in 2009. “It’s probably a good idea to have a gut check once in a while, because it makes you review and rethink your process. Our view is that this is still a market of some duration.”
At “these levels it is rapidly becoming a very strong buy,” Biggs said on Bloomberg Television’s “InsideTrack” with Erik Schatzker and Deirdre Bolton. “I do feel right now this is not the time to put out any shorts and I am very tempted to think this is a time to be buying stocks pretty aggressively.
You’re much nearer the end of this correction than the beginning,” Shaoul said in a telephone interview yesterday. His $371 million Marketfield Fund returned 14 percent in 2010, beating 82 percent of peers, according to data compiled by Bloomberg. When the S&P 500 plunged between April and July of last year, he correctly predicted the market would rebound. “U.S. corporate activity is still intact,” he said.
“Obviously, we’re disappointed by the aggressiveness of the selling,” said Birinyi. “We still think that one can do well with intelligent and rigorous stock selection. That has not changed.”

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