Let there be Bears!

This afternoon, after a very quiet day in the markets (I noted that the selling today was methodical), I received a "tweet" saying that the "resumption of the bear will be a slow tormenting process" opposite of the quick move higher the stock markets experienced. While I love getting feedback (who am I kidding, I love feedback!), I particularly like comments that are so mainstream. In short, the world feels like it stinks and smells like it as well - thus the stock market is the same and "should be sold!" I don't blame people for this thought process - when stocks were cascading in 2000, I heard the flip side of the coin...why are stocks selling off as "we feel good!"

The fact of the matter is this; anecdotal evidence at the moment argues the economy is operating and not dipping. Momentum within the spending side of the ledger shows a consumer spending slower - but still spending! Companies in the S&P 500 are trading at very cheap levels. Furthermore, if the stock markets wakes up and starts to move higher while rates return negative numbers again in 2010, stocks will sore on the asset allocation alone. Personally, I am not looking for anything dramatic but I can make a case for the S&P 500 trades over 1250 by year end (optimistic would be 1325). Technically, if the VIX breaks dow further, I will have an almost complete bullish model for stocks (ointment being the discretionary lag vs staples). Fundamentally and technically, I am bullish and have the data to back it up!

When I get comments though that we are going to experience something like japan has gone through going forward or another credit bubble is going to form or corporate earnings are not real (ie all government stimulus), I get the feeling that bears are all following the same tired arguments - just as the bulls did on the way down. They think they are getting confirmation of their bias with every sell off when in fact, the selling is a trade - not a fundamental shift.

So to the bears I say this; get some research that says profits are phony, a credit bubble is forming and government stimulus is the reason we have growth - then I will consider the arguments. Otherwise, come up with some original work!