Good Day Today, But What Does Next Week Hold In Store For Us?

While the price action today was very good, the trading is thin, and I'm not finding much I want to do. Many in fact are inclined to sell into this strength.

What I found most interesting today was how, even with this upbeat action, there seems to be an extremely high level of skepticism. Certainly, some market participants are playing along, but I hear from so many that just can't reconcile this positive-acting market with their personal feelings about the economy. The majority seem to think that we have overshot to the upside and that it is just a matter of time before we have a severe correction. Even the bulls, many of whom are anxious to add long exposure, seem to have very modest views about how the economy is going to perform in the months ahead.

This disconnection between Main Street and Wall Street has existed for quite a while, but it strikes me that the tension between the two viewpoints is becoming more pronounced. At some point, the gap between the views is going to close. Most people seem to think that the only logical way for that to happen is via a market correction rather than increased optimism on Main Street.

I tend not to agree with that thinking; what I've found over the years is that one can't argue too much with Wall Street. Wall Street just doesn't care about logic. All those problems out there - if there are any or if they're as severe as feared - aren't going to matter until they do, and the more certain we are that the market is going to fall apart, the longer it is likely to do the opposite....