Markets have been flying lately. Ever since I posted last March (Scroll down to March 09, 2009 post) stating that I thought the market has bottomed, we have been straight up. Stocks such as MU which I bought in the 2s are up by multiples. Now we are at a level where massive runs are being bought straight up with no pullback without regards to valuations. Ex. Netflix (NFLX) Also, we have had moves in small banks that are doubling during a session. This is the bio-polar opposite from the March 09 move. People have forgotten we are not in a free wheeling, free debt, environment. The growth that is being priced into the stocks will not be matched by reality. We have a restrictive credit environment for the consumer and we have an administration that is passing restrictive legislation that will further mute growth. Markets are totally ignoring this and partying like it is 1999. I feel unless we get a political stalemate, the markets are headed for a major correction as more of these socialist programs become law. There is no way we can keep going sky high with interest rates holding zero, out of control government debt without something giving way either with higher rates or taxes. The math doesn't ad up. I have sold half of my positions that I acquired near the lows and will have tight stops or sell into further rallies.
My greatest fear is that rates are not raised and the markets get out of hand and correct. If that happens, the fed doesn't have their interest rate gun loaded. What happens then? Another bailout run on the dollar?
Also, I am going to start posting daily stocks that I am day-trading.
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