The Dumb Money Is Getting Bullish

There is a sense of incredulousness regarding the recent price action.  The market seems to levitate day in and day out despite the news.  Dips are limited to 15 minutes of intra-day action.  Volume?  We don’t need no stinking volume.  From this observer’s vantage point, it just doesn’t smell right, but who am I to argue with the market?  Since the low on October 4, the SP500 has traveled 20%.  From those same lows to the end of October, the SP500 traveled 16.67%.  Since November 1 to Friday’s close, the SP500 has earned 2.9%, which annualizes to about 15%.  This is what one would expect from the price cycle as the best gains occur when investors are bearish and then the gains become a bit more begrudgingly.  Of course, that is all in the past.  The question everyone wants the answer to is “what’s next?”.