From a trend perspective, there’s still a lot to like about the equity markets here. The Bulls are suckling in the sweet marrow of disbelief with the ever growing Wall of Worry (that seemingly builds higher by the day) to the underlying momentum associated with those left behind or scrambling to cover. Throw in some improving structural developments, such as the declining trend in unemployment (tailwind), surging growth in industrial production (tailwind), and a very accommodative Fed (gail force tailwind) – and you arrive in a trading environment that is largely benevolent to the bulls, frustrating for the bears and reinforcing to the trend.
It’s really that simple.

Surely, the skeptics could argue quite rationally (like any good economist that inevitably becomes a horrible trader) that these structural improvements are being felt from such depressed and catastrophic depths – that the recovery will eventually falter and reassert itself. However, as a trader I know it’s more important to look at the markets inertia, its reflexes and its emotionalities – that are driven vastly from disparate perspectives to what’s occurring on Main Street.
It is why the markets leads the economy and why most investors miss the meat of the trend.