william the wie
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- Nov 18, 2009
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The capital flight from China and the EZ is somewhat large and likely to get larger. Grexit or a major economic collapse in China could lead to a 3,000+ S&P for no better reason than risk off.Some of the rather bizarre market action recently has me wondering if we are in the middle of a bear market rally, and if so how violently it might end. Several stocks on an uptrend appear fundamentally unstable. We have witnessed massive moves in several speculative stocks like Tesla and Netflix that are hard to defend by any other reasoning than shorts being squeezed out of the market.
The higher the market goes the more vulnerable it becomes to a major collapse and sudden downward price move.A lack of short positions will bode poorly for the market if it falls rapidly because in such a situation as shorts take profit and buy back their positions they act as a floor under the market giving it support. The article below delves into how this could be a problem going forward.
http://brucewilds.blogspot.com/2015/07/is-this-bear-market-rally.html