The bulls are confused, intoxicated, and definitely wrong right now.

Market forces June 5

The stock market is supposed to take off six months before the economy takes off, not six months before the bottom. Jim Cramer and the other perpetual Bulls are intoxicated by this current but ephemeral bear market rally.

Yesterday market volume continued below its moving average indicating the market will wring the last penny out of, as Jim Cramer likes to say, the very last greedy little pig before the next technical correction.

Bob Brinker has continued last week to say stay fully invested now as he has for seven straight years. Once again all the buy and hold broken clocks are saying buy, buy, buy, except Jim Cramer at least rotates his buys and sells stocks that run up too quickly into uncharted territory.

Investors need to think more like Warren Buffet and not just rotate stock sectors but sometimes go directly into real estate partnerships (like now) and commodities futures. The stock market unfortunately is not big enough to handle all investors.

The Obama socialists have a plan to drain money from investors now with city, state and federal taxes. New York City may be the first to see the mass exodus of its wealth.


Market Outlook

Last night Asian markets were slightly higher. China’s was down -0.4% Hong Kong up 1%, India up 0.6%, and Japan up 1%.

European markets are up slightly today in the range of 0.2% to 1.2% mid way through their day.

US futures indicate the markets will be starting flat today. A sell-off of up to 15% is becoming more probable now as the very last bulls realize this market bottom will last one year not one month.

The stock market is supposed to take off six months before the economy takes off, not six months before the bottom. In other words the bear market that started in 1929 did not turn to a bull market in 1931 after the bottom fell out of the economy. It took ten years of bear market rallies before the market became bullish again. Jim Cramer and the other perpetual Bulls are quite intoxicated and deluded by this current ephemeral bear market rally. How can the market rise for another whole year as the economy slides along the bottom? Yes, housing may appear to stabilize at a very low level since it is past its inflection point but it is still a long way from recovery.

Investors would be wise to take profits now before Jim Cramer and Bob Brinker sober up.