From Humble Student of the Markets January 22, 2013 - 3:06am
I suppose that I should be happy and bullish. US equities staged a significant upside breakout last week, indicating positive price momentum.
Mid and small cap stocks have staged upside breakouts some time ago to all-time highs, which is a bullish confirmation of the trend.
As for the current Earnings Season, Bespoke reports that preliminary indications show that the beat rate is consistent with the historical average.
Buy the breakout?
My inner trader has turned more bullish given these developments, but my inner investor continues to be a cautious and worried bull for two reasons: Sentiment and the deterioration in consumer sentiment.
First of all, equity markets are overbought and sentiment measures are overly bullish, which is contrarian bearish (see my comment last week Big test for stocks). Measure of investor sentiment were in the crowded long zone last week and preli...