Well, for all the talk about a pullback, we got a small 4% pullback just before earnings season arrived and it looked like we were set to go higher for earnings. But, then it happened...the market shot up above 10,000 on the first day of earnings. What was it doing going up so far that fast after a pullback?
Our thesis had been that we would see the sell-off into earnings, but then earnings would come in better than expected, including those companies that are growing revenue and we would get another leg higher, leaving us nicely above 10,000 in the DOW at the end of earnings season. Now, we are getting just that...except the DOW hit 10,000 3 times in the first 2 weeks and now DOW 10,100 looks like the top for the year, just like Doug Kass said.
I'll admit it, we were very nervous when the world famous Doug Kass gave his warning that we were at the top for the year. Really, all we have left is November and December...how hard could it be to get through the end of the year on good earnings above 10,000. The answer: harder and harder every day.
Sure, Steve Grasso, Jim Cramer, Zach Karabell, even Joe Terranova and Tim Seymour all said we could go higher. I'll tell you what the real tip off was. Guy Adami said he called Debbi Downer back to see if she was still interested and Joe Terranova turned on a dime and sold both his Gold and Oil. For traders, that was it, that was the moment you put in your tight stops and start building cash. If we could get someone to work for free then we would have said something that night. But, people these days seem to want to make money for the work they do; and we don't like to jump the gun.
It is true, we may very well have seen the top for the year. Jim Cramer has been DEAD wrong so far about his call for Mutual Funds and Hedge Funds to mark up stuff before October is over. Who knows, maybe those fund managers are worried after Raj got arrested that the Feds might actually no longer be asleep at the wheel.
I guess it means that we might actually have to get back above 10,000 in the DOW the old fashioned way, slow and steady, as we see the actual economy improve. Jim Cramer was right about one thing for sure...a few weeks ago, in the first pullback he said he didn't see a reason for the DOW to be above 10,000; and now...I think we might just have to agree.