I’m in total agreement with Dave that the market will have to head down unless the S & P can sustain trading above a 21x EPS multiple during a recession (historically the S & P trades at a 10 to 11 multiple in a true bear market). Now how we get there is another story. Consider this
“NEW YORK, Feb 22 (Reuters) – Short interest on the New York Stock Exchange jumped 4.8 percent in mid-February, the exchange said on Friday, touching an all-time high and suggesting an increase in bearish sentiment in the stock market.”
Large short interest + big money managers = spectacular short squeezes. I am getting a feeling we are going to see some wild swings. To me the entire market is beginning to look like one big HB stock. Shorts made a boat load of money on those stocks but not without getting their noses bloodied on more than one occasion.
